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Financial Accounting 2 Assign 2

The document contains financial accounting questions and answers related to branch inventory, consolidated statements, goodwill calculation, and a statement of cash flows for YG with supporting workings. The statement of cash flows shows a net cash increase from operating activities of R271,000, a net cash used in investing activities of R450,000, and a net cash from financing activities of R1,963,000, resulting in a total net increase in cash of R1,784,000.

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26 views7 pages

Financial Accounting 2 Assign 2

The document contains financial accounting questions and answers related to branch inventory, consolidated statements, goodwill calculation, and a statement of cash flows for YG with supporting workings. The statement of cash flows shows a net cash increase from operating activities of R271,000, a net cash used in investing activities of R450,000, and a net cash from financing activities of R1,963,000, resulting in a total net increase in cash of R1,784,000.

Uploaded by

ronell
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Financial Accounting 2

Assignment 2

FAC2246/2020/2/A

Ronell Pauchcowrie
Student No: 156859
Id No: 7805050240089

Question One

RK Pauchcowrie 156859 7805050240089


a) BRANCH INVENTORY
Opening Balance R 9 200 By Head office R 2 400
Head Office R 108 000 By Embezzlement R 4 000
By Charity R 1 500
By Cost of goods sold R 101 300
Balance c/d R 8000
R 117 200 R 117 200

b) INVENTORY TO BRANCH
Head Office R 2 400 Head Office R 108 000
Balance c/d R 105 600

R 108 000 R 108 000

c) BRANCH INVENTORY
Balance c/d R 36 900 Unrealised gain R 21 600
Creditors R 15 000
Charity R 300
R 36 900 R 36 900

d) TRADE RECEIVABLES CONTROL ACC


Sales Acc R 38 400 By Cash Acc R 20 000
Bal c/d R 18 400

R 38 400 R 38 400

e) BANK ACCOUNT
Balance b/d R 10 000 By Embezzlement R 750
Sales Acc R 88 000 Balance c/d R 117 250
To Receivables R 20 000
R 118 000 R 118 000

f) SETTLEMENT DISCOUNT GRANTED

RK Pauchcowrie 156859 7805050240089


To Profit & Loss Account R 600 By Expenses Acc R600

R 600 R 600

g) BRANCH EXPENSE ACCOUNT


To Damaged Inventory R 2 000 By Balance c/d R 9 150
To Settlement Discount R 600
To Embezzlement R 750
Embezzlement of Inventory R 4 000
To Charity R 1 800

R 9 150 R 9 150

Question 2

Journal Entries – KK’s Consolidated Financial Statements:


DT CR
1) Group Retained Earnings R 1 500.00
To Inventory R 1 500.00

(Being unrealized profit removed - See working No 1)

2) Group Trade payables Acc R 10 000


To Group Trade Receivables R 10 000

(Being payables & receivables within group eliminated)

Working No 1(Sale of KK to WK)


Mark-Up on cost 33.3% 33,1/3%

RK Pauchcowrie 156859 7805050240089


Mark-Up on sale 25%
Goods Remaining R 6 000.00
Unrealised profit R 1 500.00 (25% of R6000)

Question 3
1) Consolidated Financial Statements ZZZ as at 31:12:2013
Calculation of goodwill amount:
Investment done in SUBS: R 1 136 000
Less share capital of SUB
(430 000 8 100% HOLDING): (R 430 000)
Pre-acquisition Profit: (R 260 000)
Asset re-evaluation profit: (R 110 000)
Add: Loss of Depreciation
(110000/11): R 10 000

Goodwill = R 346 000

But ZZZ is considering goodwill @ 20% therefore impaired goodwill =


(R 346 000 – (346 000*20%) = R 276 800

2) Group retained earnings:

Retained earnings of ZZZ R 2 100 000


Add Retained earnings of SUB R 324 000

Group Retained earnings = R 2 424 000

RK Pauchcowrie 156859 7805050240089


Question 5
YG STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 20X9
R 000
Cash flows from operating activities
Profit before taxation 266
Finance cost 16
Depreciation 250
Loss on disposal of PPE 4
Amortisation of capitalized development exp 145
Decrease in redundancy provision (150)
Operating profit before working capital changes 531
Increase in inventory (W1) (97)
Increase in receivables (W1) (84)
Increase in payables (W1) 115
Cash generated from operations 465
Interest Paid (W2) (14)
Income Taxes Paid (180)
Net cash from operating activities 271

Cash flows from investing activities


Purchase of Property, Plant & Equipment (W4) (448)
Proceeds of sale of property, plant & equipment 66
Development expenditure (W5) (68)
Net cash used in investing activities (450)
Cash flows from financing activities
Dividend paid (W6) (82)
Repayment of long term borrowings (715-360) (355)
Proceeds from issue of shares (1600 + 800) 2 400
Net cash from financing activities 1963
Net increase in cash and cash equivalents (1989-205) 1784
Cash & Cash equivalents as at 31 October 20X8 205
Cash & Cash equivalents as at 31 October 20X9 1989

Workings

RK Pauchcowrie 156859 7805050240089


1) Inventories, trade receivables & trade payables
R 000

INVENTORIES TRADE RECEIVABLES TRADE PAYABLES


Balance b/d 509 372 310
Increase 97 84 115
Balance c/d 606 456 425

2) Interest Paid
Balance b/d 3
Finance costs per SPLOCI 16
19
Interest Paid (14)
Balance c/d 5

3) Income tax payable


Balance b/d – current 170
Balance b/d – deferred 170
Tax charge per SPLOCI 120
460
Income taxes paid (180)
Balance c/d – current 280

4) Property, Plant & Equipment

Balance b/d 4248


Revaluation 300
Additions 448
4996
Depreciation (250)
Disposal (70)
Balance c/d 4676

RK Pauchcowrie 156859 7805050240089


5) Development Expenditure
Balance b/d 494
Cash paid 68
562
Amortisation (145)
Balance c/d 417

6) Dividend Paid
Balance b/d 1250
Profit for the year 146
1396
Dividend paid (82)
Balance c/d 1314

RK Pauchcowrie 156859 7805050240089

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