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FAC501Y-ACCOUNTING 100-1ST OPP-NOV 2024 |
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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: 07BACC
LEVEL: 5
COURSE CODE: FAC501 Y
COURSE NAME: ACCOUNTING 100
DATE: NOVEMBER 2024
PAPER: THEORY AND PRACTICAL
TOTAL DURATION: 162 MINUTES
MARKS: 125
FIRST OPPORTUNITY EXAMINATION NOVEMBER 2024 - REQUIRED
EXAMINERS
MS Z STELLMACHER
MODERATOR:
MS M CLOETE
INSTRUCTIONS:
1. This paper consists of EIGHT pages (Including this cover page). If your paper does not contain all the pages, please put up
your hand so that a replacement paper can be handed to you.
2. Answer all the questions in blue or black ink only.
3. Eachquestion should be answered on a separate page.
4. 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.
5. You may make notes on your question paper during the reading time but may not write in your answer booklet.
6. Permissible materials include stationery and a non-programmable calculator only.
7. The neatness, disclosure and presentation of your answers will be considered when marking your paper.
8. The scenarios presented are fictitious and any similarities, real or imagined, to real events, people, places, organisations are
purely coincidental and should be interpreted as such.
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QUESTION 1
30 MARKS
You have been appointed as the financial accountant of Truly Tiles (Pty) Ltd. Truly Tiles (Pty) Ltd is a tile
manufacturing company located on the outskirts of Okahandja in Namibia. The financial manager has
provided you with the following trial balance and requested that you assist him in compiling the cash
flow statement of the company. The year-end of the company is 31 December.
Truly Tiles (Pty) Ltd
Trial Balance
Equipment
Accumulated depreciation - equipment
Inventories
Trade receivables
Allowance for doubtful debts
Bank
Mortgage bond
Trade payables
Payable - equipment item purchased
Shareholders for dividends
Income tax due
Ordinary share capital
Retained earnings (31 Dec)
2024
N$
38 320 000
(12108 000)
2 172 8000
23 207 000
(1467 000)
4 318 000
(7 706 000)
(11520 000)
(3 000 000)
(5 000 000)
(376 000)
(55185 000)
(23 441 000)
2023
N$
32 500 000
(11694 000)
17 720000
18 429 000
(1125 000)
6141000
(8 534 000)
(9 247 000)
-
(2 500 000)
(450 000)
(40 455 000)
(21205 000)
Additional information
l. You ascertained the following information from the statement of profit or loss of Truly Tiles
(Pty) Ltd for the year ended 31 December 2024:
Sales
Finance costs
Income tax expense
Profit after tax
N$
98 750 000
(1 215 000)
(2 284 000)
7 236 000
2. The financial manager informed you that except for the information as stated in point number 3,
there were no other purchases or sales of non-current assets during the financial year.
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3. Equipment
3.1 On 31 August 2024, an equipment item with a cost price of N$ 2 880 000 and accumulated
depreciation of N$ 2 808 000, as at that date, was withdrawn and scrapped.
3.2 On 25 October 2024, an order to the amount of N$ 4 200 000 was issued to replace the
above-mentioned equipment item. The replacing equipment item was received on
29 November 2024 and put into service by Truly Tiles (Pty) Ltd on 1 December 2024. On 1
December 2024 an amount of N$ 1 200 000 was paid to the supplier. The outstanding
amount of N$ 3 000 000 is payable on 31 January 2025.
4. The finance cost in the Statement of Profit or Loss refers to the interest expense incurred
on the mortgage bond. This interest is not included in mortgage bonds balances as per the
Trial Balance above.
REQUIRED
a) Calculate the following numbers as they will appear in the Cash Flow Statement of Truly Tiles
(Pty) Ltd for the year ended 31 December 2024:
i)
Cash receipts from customers
(3)
ii)
Income tax paid
(3)
iii)
Dividends paid
(4)
iv)
Purchase of equipment to replace
(2)
v)
Purchase of equipment (excluding replacement equipment)
(3)
vi)
Mortgage bond repayment
(3)
b) Disclose only the note "Cash generated from operations" to the Cash Flow Statement of Truly
Tiles (Pty) Ltd for the reporting period ended 31 December 2024.
(12)
Note:
Ignore VAT.
Show ALL calculations clearly.
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QUESTION 2
35 MARKS
Afrideca Ltd supplies building materials to builders and homeowners and is incorporated under the
Companies Act of 2008. Afrideca Ltd and all its suppliers are registered VAT vendors and VAT is
calculated at a rate of 15%.
The company makes use of the perpetual inventory system. The following statement of profit or loss for
the reporting period ended 31 December 2024 was prepared by the junior accountant, Angela who was
uncertain about how to recognize and present some of the transactions.
Revenue
Cost of sales
Gross profit
Other Income
-
Distribution costs
Administration expenses
-
Other costs
Profit for the year
-
N$
10720 000
(4 305 000)
6 415 000
1725000
(4 650 000)
3 490 000
ADDITIONAL INFORMATION:
With the exception of the discrepancies and omissions identified below, the information as stated in
the statement of profit or lossabove is correct.
1. The following amounts (accurately calculated) have been included in the line item "Distribution,
Administration and Other costs" above:
• Inventory loss due to theft
• Interest on overdraft
• Interest income on deposit
• Employee benefit costs
N$105 000
N$191430
N$ 85 000
N$ 2 020 000
2. The following transactions are yet to be recognised in the records of Afrideca Ltd:
2.1. Afrideca Ltd received a dividend payout of N$ 840 000 from Brickz (Pty) Ltd. Afrideca Ltd owns
55 % of the shares in Brickz (Pty) Ltd.
2.2. An inspection of the building supplies warehouse on 31 December 2024 revealed that inventory
with a cost of N$ 2 320 000 has a net realisable value of N$ 2 030 000.
2.3. Furthermore, the insurance company paid out N$ 111 720 for compensation on inventory that
was damaged as a result of a leak in the warehouse roof. The inventory damage was correctly
recognised.
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2.4. The company made a first provisional tax payment of N$ 550 000 to NAM RA on 30 June 2024.
The accounting profit for the 2024 financial year amounted to N$ 3 893 718 and the taxable
income amounted to N$ 3 161 290. The income tax expense for the current financial year has
not been recorded in the records of the company.
3. The share capital of Afrideca Ltd on 1 January 2024 comprised of 2 500 000 ordinary issued shares of
N$ 15 each and 1 750 000 7.5 % issued preference shares of N$ 10 each. On 1 October 2024, a
further 1000 000 ordinary shares were issued for N$ 15 each as well as a further 1 000 000 7.5 %
preference shares at N$ 10 each. The directors declared an ordinary dividend of 10c per share on 31
December 2024. Retained earnings on 1 January 2024 amounted to N$ 4 850 000.
4. Management fees of N$ 805 000 (VAT inclusive) were received from Jump (Pty) Ltd during the
reporting period.
REQUIRED
a) Present the Statement of profit or loss for the financial year ended 31 December 2024 in compliance
with the IFRS.
(20)
b) Prepare the retained earnings column in the Statement of Changes in equity for the year ended 31
December 2024.
(6)
c) Name the three (3) reports that should be discussed at the AGM of the company.
(3)
d) Name instances as per the Companies Act of 2008, when a person cannot be elected as a director of
a company.
(6)
Note:
Accounting policy notes are not required.
Show all calculations and reference clearly.
Comparative figures are not required.
Round up to the nearest Namibian Dollar where applicable.
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QUESTION 3
20 MARKS
XYZ Ltd is registered VAT vendor with a 30 June financial year-end.
XYZ Ltd owns an investment property, consisting of an office block in the city centre which it acquired
for an amount of N$ 13 000 000. Prior to acquiring the property, the Board of Directors was of the
opinion that real estate in that area will appreciate in value. The registration of the property was done
on 30 June 2021. In order to finance this asset, N$ 8 000 000 was paid via EFTwhile the remainder was
funded by a 11.5 % mortgage bond, which is payable in 25 instalments twice a year. Shortly after
registration, the company signed a lease agreement with an international law firm which will lease the
property for N$ 129 375 (VAT inclusive) every month.
An independent valuation by Twafeni Property Valuators indicated the fair value of the property to be
N$ 13 850 000 on 30 June 2023 (N$ 13 300 000 for 2022).
The company's policy is to account for investment property according to the fair value model.
REQUIRED
Disclose the above information
ended 30 June 2023.
Note:
in the notes to the financial statements of XYZ Ltd for the financial year
(20)
Accounting policy notes are not required.
Show all calculations and reference clearly.
Comparative figures are not required.
Round up to the nearest Namibian Dollar where applicable.
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QUESTION 4
15 MARKS
Distinct Devices (Pty) Ltd is a private company which imports highly sought-after electronic devices in
Namibia. The company's current reporting period ends on 31 December 2024. The company is
registered for VAT and it uses the periodic inventory system.
At the end of May 2024, a good customer of Distinct Devices (Pty) Ltd, Blue (Pty) Ltd, contacted Distinct
Devices (Pty) Ltd to order 300 specialized tablets for their organization. Blue (Pty) Ltd has always paid its
obligations on time and it is expected that this situation will continue in the foreseeable future.
On 10 June 2024, Distinct Devices (Pty) Ltd signed a contract with Blue (Pty) Ltd. The contract stipulated
that Distinct Devices (Pty) Ltd will deliver the following items to Blue (Pty) Ltd's main warehouse in
Windhoek as follows:
• 175 cellphones will be delivered on 20 June 2024; and
• 125 cellphones will be delivered on 6 July 2024.
The sales price of the 300 cellphones is N$862 500 (including VAT) and it will remain fixed irrespective of
the number of units sold. The total amount is payable on 31 July 2024.
REQUIRED
Discuss the application of the 5 step model of IFRS15 in relation to the above information.
(15)
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QUESTION 5
25 MARKS
Enigma Ltd is a company which manufactures vehicles parts and is located in the northern industrial
area of Windhoek. The company has a 30 June year-end.
During December 2023 the Board of Directors of Enigma Ltd thought it appropriate to expand their
operations into the tyre manufacturing sector. Engima Ltd purchased a 55 % of the 100 000 ordinary
shares in issue ofTyre-Rama (Pty) Ltd for N$ 2 000 000. The shares were paid for on 3 June 2024.
Many of the key positions in Tyre-Rama (Pty) Ltd were vacant at the time when Enigma Ltd made the
investment. Enigma Ltd therefore provided management services to Tyre-Rama (Pty) Ltd to the amount
of N$ 82 000 during the month of June 2024.
On 30 June 2024, a dividend of 25 cents per ordinary share was declared by Tyre-Rama (Pty) Ltd. This
dividend was paid on 18 August 2024.
On 1 December 2023, Engima Ltd purchased 44 000 listed shares in Car Parts Ltd at a cost of N$ 4.50 per
share via bank transfer. The total number of issued shares of Car Parts Ltd amounted to 250 000.
On 30 June 2024 the market value of Car Parts Ltd's total ordinary shares was N$ 1 625 000. On the 1st
of May 2024, the directors of Car Parts Ltd declared a dividend of 40 cents per share.
It is the accounting policy of Engima Ltd to measure investments in listed shares at fair value through
Profit and Loss, while investments in unlisted shares are measured using the cost model.
REQUIRED
a) Prepare all the general journal entries relating to the investments in Tyre-Rama (Pty) Ltd and Car Parts
Ltd in the records of Enigma Ltd, which is evident from the above information. Narrations are required
for all journal entries.
(14)
b) Disclose the above information in the
i) Statement of Profit or Loss (5 Marks) and
ii) The notes to the Financial Statements (6 Marks)
of Enigma Ltd for the reporting period ended 30 June 2024.
(11)
Note:
Accounting policy notes are not required.
END OF ASSESSMENT
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