FAC3762 ASSIGNMENT 2 OF 2021
QUESTION 1
(a) Notes to the annual statements of Plastics Ltd for the year ended31 December
2020
1. Profit before tax
Profit before tax is stated after taking the following into account
R
Depreciation 53 290
Total depreciation [109 430 (𝐶1) + 39 611 (𝐶2)] 149 041
Depreciation capitalised (95 751)
Net Finance Cost 20 720
Finance cost 20 720
Total interest expense [91 067 (𝐶1) + 105 787 (𝐶2)] 196 854
Interest expense capitalized [80 244 (𝐶1) + 95 890 (𝐶2)] (176 134)
Finance Income -
Total interest income 18 546
Interest income capitalized (18 546)
2. Property, plant & equipment
Plant
R
Carrying amount at beginning of year -
Cost -
Accumulated Depreciation -
Additions at cost 4 500 000
Interest capitalized [80 244 (𝐶1) + 77 344 (𝐶2)] 157 588
Depreciation capitalized (𝐶1) 95 751
Depreciation for the year (𝐶2) (39 611)
Carrying amount at end of year 4 713 728
Cost 4 753 339
Accumulated Depreciation (39 611)
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
, 3. Leases
3.1. Right – of – use assets
R
Carrying amount at beginning of year -
Additions (𝐶1) 984 869
Depreciation for the year (𝐶1) 109 430)
Carrying amount at end of year 875 439
3.2. Maturity analysis of future lease payments payable at the reporting date
R
Future lease payments (undiscounted)
- For the year ended 31 December 2021 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2022 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2023 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2024 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2020 (132 381 + 100 000) 232 381
Total future lease payments 1 291 429
Total future finance cost (43 292 + 60 135 + 18 330 + 36 661 + 49 480 +
14 525 + 29 051 + 37 252 + 10 159 + 20 319 + 23 221 + 5 149 + 10 299) (357 873)
Lease liability 933 556
Short – term portion presented under current liabilities (933 556 − 790 551) 143 005
Long – term portion presented under current liabilities (933 556 − 790 551) 790 551
3.3. Total cash flows relating to leases
R
Presented under financing activities
Cash payments for principal portion of lease liabilities 62 960
Presented under operating activities
Cash payments for legal fees 10 000
Cash payments for interest portion of lease liabilities 69 421
142 381
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
QUESTION 1
(a) Notes to the annual statements of Plastics Ltd for the year ended31 December
2020
1. Profit before tax
Profit before tax is stated after taking the following into account
R
Depreciation 53 290
Total depreciation [109 430 (𝐶1) + 39 611 (𝐶2)] 149 041
Depreciation capitalised (95 751)
Net Finance Cost 20 720
Finance cost 20 720
Total interest expense [91 067 (𝐶1) + 105 787 (𝐶2)] 196 854
Interest expense capitalized [80 244 (𝐶1) + 95 890 (𝐶2)] (176 134)
Finance Income -
Total interest income 18 546
Interest income capitalized (18 546)
2. Property, plant & equipment
Plant
R
Carrying amount at beginning of year -
Cost -
Accumulated Depreciation -
Additions at cost 4 500 000
Interest capitalized [80 244 (𝐶1) + 77 344 (𝐶2)] 157 588
Depreciation capitalized (𝐶1) 95 751
Depreciation for the year (𝐶2) (39 611)
Carrying amount at end of year 4 713 728
Cost 4 753 339
Accumulated Depreciation (39 611)
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
, 3. Leases
3.1. Right – of – use assets
R
Carrying amount at beginning of year -
Additions (𝐶1) 984 869
Depreciation for the year (𝐶1) 109 430)
Carrying amount at end of year 875 439
3.2. Maturity analysis of future lease payments payable at the reporting date
R
Future lease payments (undiscounted)
- For the year ended 31 December 2021 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2022 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2023 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2024 (132 381 ∗ 2) 264 762
- For the year ended 31 December 2020 (132 381 + 100 000) 232 381
Total future lease payments 1 291 429
Total future finance cost (43 292 + 60 135 + 18 330 + 36 661 + 49 480 +
14 525 + 29 051 + 37 252 + 10 159 + 20 319 + 23 221 + 5 149 + 10 299) (357 873)
Lease liability 933 556
Short – term portion presented under current liabilities (933 556 − 790 551) 143 005
Long – term portion presented under current liabilities (933 556 − 790 551) 790 551
3.3. Total cash flows relating to leases
R
Presented under financing activities
Cash payments for principal portion of lease liabilities 62 960
Presented under operating activities
Cash payments for legal fees 10 000
Cash payments for interest portion of lease liabilities 69 421
142 381
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
