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FAC601Y-FINANCIAL ACCOUNTING 200-1ST OPP-NOV 2025 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION : BACHELOR OF ACCOUNTING (CHARTERED ACCOUNTANCY)
QUALIFICATION CODE: 07 BACC LEVEL: 6
COURSE CODE: FAC601Y
COURSE NAME: FINANCIAL ACCOUNTING 200
SESSION: NOVEMBER 2025
PAPER: THEORY AND PRACTICAL
DURATION: 150 MIN
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER: ME Cloete
MODERATOR: Z Stellmacher
INSTRUCTIONS
1. Answer ALL questions in blue or black ink only.
2. This paper consists of THREE questions.
3. Write clearly and neatly.
4. Start each question on a new page and number the answers clearly.
5. No programmable calculators are allowed.
6. Questions relating to the paper may be raised in the initial 30 minutes after the
start of the paper. Thereafter, candidates must use their initiative to deal with
any perceived error or ambiguities & any assumption made by the candidate
should be clearly stated.
7. Any resemblance to any people, places, organisations or anything are purely
coincidenta I.
8. Round any numbers to the nearest whole number and show all workings
clearly.
THIS QUESTION PAPER CONSISTS OF 8 PAGES (Including the front page)
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QUESTION 1
(57 MARKS)
Jewelz (Pty) Ltd (hereafter referred to as Jewelz) is a jewellery manufacturing company based in
Windhoek. The company specializes in creating necklaces from a wide range of materials such as
precious stones, wood and seashells. The company has a 31 December year end.
Inventory
The following information has been provided to you relating to the company's inventory for the
year ended 31 December 2025:
Beginning of the year:
Quantity
Details
~
0 Raw materials
8 500 kg
N$3.40 / kg ?
0 Work in progress
0
0
0 Finished goods
18 500 units
During the year:
0
Raw material purchases
Quantity
?
Details
~
N$3.40 / kg 1360 000
0
Raw material usage
85 000 kg ?
?
0
Rent incurred
340 000
(75% used by the factory & 25% by the head
office)
0
Direct wages incurred for manufacturing
. 391000
0
Office telephone incurred by head office
13 300
0
Electricity incurred (each necklace
N$0.1/
12 750
manufactured required 0.5 kilowatts of
kilowatt
electricity)
0
Year-end party for factory staff
12 450
Additional information for inventory :
• 85 000 necklaces were produced during the year.
• 70% of the finished goods that were available for sale during the year remained unsold at
31 December 2025.
• Annual fixed manufacturing costs incurred are N$315 000 and a normal annual
production level is 157 500 units.
• The cost per finished manufactured necklace in the current year is the same as the cost
per the finished manufactured necklace in the prior year.
• All amounts incurred were paid for in cash.
While finalizing the financial statements of Jewelz for the current financial period, the accountant
came across the following issues and requested your assistance. The directors are expecting to
authorize the release of the financial statements on 17 April 2026, after considering these matters:
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Audit invoice
An invoice from the auditors for N$235 000 was received on 20 February 2026, relating to the
audit of Jewelz' financial statements for the year ended 31 December 2025.
The invoice stated that the audit work was completed as follows:
•
75% of the audit work was performed before 31 December 2025; and
•
25% of the audit work was completed during January 2026.
•
Jewelz has not provided for any part of these audit fees at 31 December 2025.
Investment in shares
Jewelz owns 35 000 shares in Ringz Limited, a company listed on the New York Stock Exchange
NYSE). At 31 December 2025, the market price of each share was N$9.35.
During March 2026, a President Trump made some political changes which resulted in the share
price dropping dramatically to N$4.15 per share. The investment in shares as at 31 December 2025
has not been adjusted for the drop in share price.
Packaging equipment
Jewelz has packaging equipment in its factory that was purchased on 1 January 2023, at a cost of
N$ 1740000. The equipment originally had an estimated useful life of 6 years and was depreciated
to a nil residual value on the straight-line basis.
On 1 January 2025, the total useful life of the equipment was re-estimated to 8 years. Jewelz uses
the re-allocation method to account for changes in accounting estimates.
QUESTION 1
TO BE ANSWERED ON A SEPARATE PAGE
YOU ARE REQUIRED TO:
MARKS
(a)
With regards to the inventory information provided, calculate the
following:
i)
Budgeted fixed manufacturing cost application rate
(1)
ii)
Fixed manufacturing costs allocated to work-in-progress
(1)
iii) Total manufacturing cost per unit
(5)
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(b}
Calculate the finished goods manufactured balance and the cost of
(5}
sales amount for inventories at 31 December 2025.
(c}
Prepare all journal entries relating to the inventory balances of
(21}
Jewelz (Pty} Ltd for the year ended 31 December 2025. Narrations
are required.
(d}
With regards to the Audit invoice and Investment in shares issues:
(9}
i. Identify and explain whether each issue is an adjusting or
non-adjusting event, or neither.
ii. Where appropriate, provide the required adjusting journal
entries, or state whether or not any related information
would need to be disclosed in the financial statements of
Jewelz (Pty} Ltd for the year ended 31 December 2025.
(e}
Prepare the depreciation journals necessary from the information
(9}
provided on the packaging equipment, assuming:
i. Depreciation had not yet been processed for the year ended
31 December 2025.
ii. Depreciation based on the old estimate had already been
processed for the year ended 31 December 2025.
(f}
Show how the information related to the packaging equipment
(6)
would be disclosed in the notes to the financial statements of Jewelz
(Pty} Ltd for the year ended 31 December 2025.
Include both the 'statement of compliance' and the 'accounting
policy note for property, plant and equipment'.
TOTAL MARKS: QUESTION 1
{Adapted /ram NUST FAC200 Final Assessment and GMP:GRADED QUESTIONS 2022)
(57)
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QUESTION 2
(15 MARKS)
Sports Limited (Ltd) is a small manufacturer of various sporting balls, operating in Oshakati. The
products of Sports Ltd include golf balls, tennis balls, rugby and soccer balls. The company has a
31 August financial year end. You have been presented with the below list of balances for the
reporting periods ending 31 August 2025 and 2024.
Investment Property
Property, plant and equipment (Carrying amount)
Investment in bonds
Inventory
Accounts receivable
Cash and cash equivalents
Ordinary share capital
Retained earnings
Long term loan
Accounts payable
Bank overdraft
Shareholders for dividends
Current tax payable
2025
i. 576,000
ii. 849,690
iii. 54,000
72,000
117,000
19,800
1,688,490
648,000
790,290
126,000
32,400
-
72,000
19,800
1,688,490
2024
522,000
330,300
36,000
97,200
72,000
-
1,057,500
576,000
217,800
144,000
39,600
21,600
54,000
4,500
1,057,500
Additional information:
i. The Investment property comprises a warehouse that is leased out to tenants in terms of
an operating lease. Sports Ltd accounts for investment property using the fair value model.
There has not been any acquisition or disposal of investment property during the current
reporting period.
ii. The fixed asset register of Sports Ltd reflects the following items of PPE:
2025
2024
Equipment at cost
619,380 342,000
Motor vehicles at cost
504,000 270,000
Accumulated depreciation: Equipment
- 129,690 - 162,000
- Accumulated depreciation: Motor vehicles 144,000 - 119,700
During the financial year ended 31 August 2025, equipment with a cost price of N$162,000
and accumulated depreciation of N$48,600 was sold. A profit on disposal of the equipment
was realized at an amount of N$3,600.
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iii. The investment in bonds is a long-term investment the generates interest income on an
annual basis. The income from the investments in the current reporting period amounted
to N$15,300. Investment income from government bonds is classified as income from
operating activities.
iv. Dividends declared during the period amounted to N$63,000
v. Current tax for the period amounted to N$313,110
vi. Revenue and cost of sales and other operating expenses amounted to N$1,440,000,
N$360,000 and N$148, 770 respectively.
vii. Total finance cost for the reporting period ended 31 August 2025 amounted to N$14,940.
viii. Profit before tax has correctly been determined at N$948,600.
QUESTION 2
t,,
TO BE ANSWERED ON A SEPARATE PAGE
YOU ARE REQUIRED TO:
MARKS
(a)
Prepare the cash flows from Operating activities section of the (15)
statement of cashflows of Sports Limited for the reporting period
ended 31 August 2025 in compliance with IAS 7 Statement of
cashflows using the indirect method. Show all workings.
TOTAL MARKS: QUESTION 2
(Source: Adaptedfrom NUST Assessment)
(15)
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QUESTION 3
(28 MARKS}
You are the accountant at Pills Limited (Pills), a pharmaceutical company that provides various
health services and products. The company is listed on the Namibian Stock Exchange (NSX} and
has been operating in Namibia for the past 10 years. Pills has a 30 June financial year end.
After the Covid pandemic, there has been a global shift in the pace of changes in technology. It is
as if various aspects change so fast, businesses need to ensure they keep up. The following
information relates to equipment that Pills owns:
All amounts indicated as at:
Actual carrying amount
Historic carrying amount
Recoverable amount
Fair value
30June 2025
N$
35 900
38 250
40400
34600
Since purchasing the machine in 2019, the company has only recognized one impairment loss on
this machine for N$2 200. No other impairment losses have ever been processed on this machine.
Pills accounts for its machinery on the cost model.
In addition to the above, while working on the financial statements for the current year, you
discover an error in the financial statements that was overlooked in the previous year. Correcting
it now may hurt the company's stock price, as the entity had been performing well recently on the
NSX, but leaving it uncorrected would misleads investors. You are unsure of how to address this
issue.
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QUESTION 3
TO BE ANSWERED ON A SEPARATE PAGE
YOU ARE REQUIRED TO:
I
MARKS
(a)
In general, explain which cash flows should be included in a value-in-
(4)
use calculation.
(b)
Prepare the journal entries relating to the impairment of the
(2)
machine processed for its first impairment loss. Dates and narrations
are not required.
(c)
Discuss at what amount the machine will be recorded for the
financial year ended 30 June 2025. Additionally, provide the journal (11)
entries that will be processed relating to the machine for the 2025
financial year (do not concern yourself with any depreciation
journals). Narrations are required.
(d)
In general, list and describe 3 factors that can lead to the reversal of
(6)
an impairment loss previously recognized?
(e)
With regards to the error identified in the financial statements from
(3)
the prior year, discuss what your professional ethics obligation is.
TOTAL MARKS: QUESTION 3
(Source: Adaptedfrom Gripping GAAP 2022, Service, Kolitz)
Communication and Presentation for total paper
TOTAL MARKS FINAL ASSESSMENT OPPORTUNITY 1
(26)
(2)
(100)
<<END OF QUESTION PAPER>>
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