Mr MT Hlongoane Mrs FM Osman Mr A Eysele Mr J van Staden Mrs B Ntoyanto-Ceki Module Telephone Number: 012 429 4176 Module E-mail Address: fac1601@unisa.ac.za DEPARTMENT OF FINANCIAL ACCOUNTING FAC1601: FINANCIAL ACCOUNTING REPORTING FAC1601/202/2/2012 2 Dear Student Enclosed please find the solution to assignment 2 - second semester. It is important that you work through the assignment together with the solution provided herein. With kind regards LECTURERS: FAC1601 - FINANCIAL ACCOUNTING REPORTING FAC1601/202/2/2012 3 ANNEXURE A: SOLUTION TO ASSIGNMENT 02/2/2012 (SECOND SEMESTER) UNIQUE NUMBER: 732044 DUE DATE: 10 SEPTEMBER 2012 QUESTION 1 Alternative 3: Interest expense: R49 500, Total amount payable: R99 750 Calculations: Interest expense in respect of the loan from Dr. Kissinger: R550 000 x 9% = R49 500 Total amount payable to Dr. Kissinger on 28 February 2012: R Interest on loan (R550 000 x 9%) ÷ 2 (two equal payments per year) 24 750 Short-term portion of long term loan (R550 000 ÷ 10) 55 000 Distribution to member 20 000 Total amount payable 99 750 QUESTION 2 Alternative 4: R10 125 Calculations: Loan balance at the beginning of the year: R(120 000 – 45 000 + 15 000) = R90 000 R Interest for the full year: R(90 000 – 15 000) x 9g50 Interest on R15 000 repaid during the year: 1 July 2011 – 31 December 2011: R15 000 x 9% x 6/12 675 Interest on additional R45 000 borrowed during the year: 1 November 2011 – 30 June 2012: R45 000 x 9% x 8/12 2 700 Total interest income 10 125 FAC1601/202/2/2012 4 QUESTION 3 Alternative 1: R205 200 Calculations: RIVERRAFTING CC STATEMENT OF CHANGES IN NET INVESTMENT OF MEMBERS FOR THE YEAR ENDED 30 JUNE 2012 Members’ Contributions Retained earnings Asset replacement reserve Loans from members Loans to members Total R R R R R R Balances at 1 July 2011 ➀40 000 135 200 - 120 000 ➁(90 000) 205 200 ➀ R[(35 000 – 10 000) + 15 000] = R40 000 ➁ R(120 000 +15 000 – 45 000) = R90 000 QUESTION 4 Alternative 1: R312 060 Calculations: R Profit before tax 350 000 Income tax expense (98 140) Distributions to members (10 000) Transfer to asset replacement reserve (65 000) 176 860 Retained income 1 July 2011 135 200 Retained income 30 June 2012 312 060 QUESTION 5 Alternative 2: R25 000 Calculations: (200 000 ordinary shares offered x R2,50) x 5% = R25 000 FAC1601/202/2/2012 5 QUESTION 6 Alternative 2: R1 000 000 Calculations: Dr Bank Cr 2012 Jan 31 Application and allotment: R 2012 Jan 31 Balance c/d R 1 000 000 Ordinary shares 400 000 Application and allotment: 10% preference shares 600 000 1 000 000 1 000 000 Feb 1 Balance b/d 1 000 000 QUESTION 7 Alternative 3: Debit R Credit R Retained earnings Share capital Capitalisation of issue of ordinary shares held 120 000 120 000