Question 1a
Yes, Craft Ltd has a liability towards Sontech Ltd. This is because Craft Ltd has agreed to underwrite
the share issue, which means that they have committed to buying any shares that are not taken up
by the public. The amount of the liability will be equal to the number of shares that are not taken up
by the public multiplied by the issue price per share. In this case, the liability will be 250 000 - 235
000 = 15 000 shares * R3 per share = R45 000.
Question 1b
The commission payable to Craft Ltd is calculated as follows:
Commission rate * Number of shares underwritten * Issue price per share = 8% * 15 000 shares * R3
per share = R3600
Question 2
Public accountability is the requirement for an entity to report its financial information to the public.
This is typically required for entities that are listed on a stock exchange or that are otherwise subject
to regulation by a government or other authority.
Question 3
Computational thinking is the ability to use logic and creativity to solve problems. Cyber security is
the protection of information systems from unauthorized access, use, disclosure, disruption,
modification, or destruction. Data analytics is the process of collecting, cleaning, and analyzing data
to extract insights and make informed decisions.
Question 4a
The accounting treatment of the pre-order transaction in accordance with the Conceptual
Framework of 2018 is that MobileR Ltd has a liability to Wild Africa Ltd for the 500 mobile radios.
This is because MobileR Ltd has a present obligation to transfer an economic resource (the mobile
radios) to Wild Africa Ltd as a result of a past event (the pre-order).
Question 4b
The journal entry for the pre-order transaction in the accounting records of MobileR Ltd for the year
ended 31 May 2023 is as follows:
Debit Accounts receivable R50 000
Credit Inventory R50 000
This journal entry records the increase in accounts receivable and the decrease in inventory as a
result of the pre-order.
Question 4c
The journal entry for the pre-order transaction in the accounting records of MobileR Ltd for the
financial year ended 31 May 2024 is as follows:
Debit Cost of goods sold R50 000
Credit Inventory R50 000
Yes, Craft Ltd has a liability towards Sontech Ltd. This is because Craft Ltd has agreed to underwrite
the share issue, which means that they have committed to buying any shares that are not taken up
by the public. The amount of the liability will be equal to the number of shares that are not taken up
by the public multiplied by the issue price per share. In this case, the liability will be 250 000 - 235
000 = 15 000 shares * R3 per share = R45 000.
Question 1b
The commission payable to Craft Ltd is calculated as follows:
Commission rate * Number of shares underwritten * Issue price per share = 8% * 15 000 shares * R3
per share = R3600
Question 2
Public accountability is the requirement for an entity to report its financial information to the public.
This is typically required for entities that are listed on a stock exchange or that are otherwise subject
to regulation by a government or other authority.
Question 3
Computational thinking is the ability to use logic and creativity to solve problems. Cyber security is
the protection of information systems from unauthorized access, use, disclosure, disruption,
modification, or destruction. Data analytics is the process of collecting, cleaning, and analyzing data
to extract insights and make informed decisions.
Question 4a
The accounting treatment of the pre-order transaction in accordance with the Conceptual
Framework of 2018 is that MobileR Ltd has a liability to Wild Africa Ltd for the 500 mobile radios.
This is because MobileR Ltd has a present obligation to transfer an economic resource (the mobile
radios) to Wild Africa Ltd as a result of a past event (the pre-order).
Question 4b
The journal entry for the pre-order transaction in the accounting records of MobileR Ltd for the year
ended 31 May 2023 is as follows:
Debit Accounts receivable R50 000
Credit Inventory R50 000
This journal entry records the increase in accounts receivable and the decrease in inventory as a
result of the pre-order.
Question 4c
The journal entry for the pre-order transaction in the accounting records of MobileR Ltd for the
financial year ended 31 May 2024 is as follows:
Debit Cost of goods sold R50 000
Credit Inventory R50 000
