FAC3761 EXAM PACK

FAC3761
EXAM PACKAGE
& SOLUTION

, FEEDBACK ON PREVIOUS EXAMINATION PAPERS

OCTOBER / NOVEMBER 2011

SOLUTION 1: ACCOUNTING POLICIES, HANGERS IN ACCOUNTING ESTIMATES AND
ERRORS, IAS 10 (AC107) – EVENTS AFTER THE REPORTING PERIOD 1AS12 (AC102) –
INCOME TAXES AND IAS 18 (AC111) REVENUE

Question 1.1.
Calculation of corrected profit before Tax of rainbow Limited for the year ended 28 February
2011

R
Provisional profit 690 000
Cash on delivery sales – reversed (40 000)
Credit loss [ 10 000 – 0.10) (9000)
Change in accounting estimate (300 – 500 ) (50 000)
Interest – tax (4000)
Realties – tax 2010 (6000)
Corrected profit 581000



Question 2
Calculation of current Tax Rainbow Limited for year ended 28 February 2011

R
Profit before tax (see 91) above) 581 000
Exempt differences (52 000)
Interest on tax 4 000
Penalties on tax 6000
Dividends received (60 000)
Capital profit on sale of machine (24 000 – 20 000) x (100 – 50%) (2000)
Temporary Differences 87 000
Cash on delivery sales 40 000
Profit on sale of machine (20 000 – 12 000) (8 000)