University of Fort Hare ‘Together in Excellence NKUHLU DEPARTMENT OF ACCOUNTING ACCOUNTING 1B ACCI21IACCI21E OPPORTUNITY ASSESSMENT 4 11 August 2014 SUGGESTED SOLUTIONQuestion 4 [Partnership Private Company [Nota legal person (7) Separate legal person (1) [Limited life (1) Unlimited fife (1) Partners are liable for the debts of the | Shareholders have limited for business. (1) the debts of the company. (1) Partners conduct the business (7) Shareholders appoint directors to conduct business (1 Partnership not taxed but Taxation paid at a fixed rate applicable partners (1) to companies (1) Any other valid point. 2. R2 per share will be paid as a dividend (1). Because the sharehoklers approve a dividend limited (1) to the amount recommended by the board of directors (1) 3. Liquid Company will be able to pay debts (1) ~ as they come due for 12 months after declaration (1) Solvent Assets, if fairly valued, equal to or greater than liabilities of the company (2) 4. No (1), Because the company is insolvent (2)Question 2 a) 8 220 000 (1) + 150 000°0.2 (2) 6 000 000 (1) = 2280 000/180 000 (1) = R15 Give 1 mark extra if the student got the correct figure, General Journal of McLinda Lid I Debit | Credit [| b) Underwriter's commission (1) 412500 (4) | i [Bank (1) yt 112 500 | J | Share capital: Class A (i) [7112 500 Underwriter's commission (1) I 142 500 | I I I le) 4 Bank (1) | 260 000 (1) | i I Application & allotment (4) | | 250 000 I ! | Application & allotment (1) 250 000(1) | [Bank (4) | 250 000 | I | { § Bank (1) 750 000/2"R5- | 1875 000 (2) | Redeemable preference | 7 875 000 shares Liability (2) | | 4 ) Class A: (600 000 (%) + 150 000 (%4)) * 0.4 (%4) = R300 000 Class B: 100 000 (%4) * 0.16 (%4) = R15 000 R315 000 Dividend tax R315 000 * 15% (4) = R47 250 | [ Debit Credit | [ Dividends(1) 315 000 I eae ‘Shareholders for dividends (1) | 267 760 | SARS for dividends (1) [ I 47 250 | e) McLinda Ltd Extract of Statement of financial position as at 30 April 2014 (1) 2014 2013 | | R R L _ I | Equity Eee I | ‘Share capital: Class A 8 107 500(2) | 6000 000 (4) ‘Share capital: Class B [230000 (i) | 220 0004) Retained earnings 755000 (8) | 720.000 (%) ‘Special reserve 300,000 (2)_| 200 000 (%) Total equity 9 382 500(%) | 7 140 000 (%) RE = R720 000+R450 000(1}-R316 000(1)-R100 000(7) = R755 000 Deduct 1 mark for each account incorrectly disclosed under equity. -3-Question 3 General joumal of Fatt Traders a) _adjusting ioumal entries at 30 June 20.14 DR cR R R Mai Land 5000 1 Revaluation surplus (1) 5.000 Buildings( 226 000 - 227 000) 5 000 7 Revaluation surplus (1) 5.000 Equipment (110 000 - 105 000) 5000 1 Revaluation surplus(1) 5.000 Revaluation surplus (1) 70 000 Vehicles (60 000 - 70 000) 400004 Revaluation surplus(1) 20 000 Goodwill(30 000 - 50 000) 20000 4 Capital account Fayde(15 000*9/20) 6 750 1 Algor(15 000 * 6/20) 4500 1 Thor(15 000*S/20) 3750 1 Revaluation surplus(1) 15 000 146 L Dose sjosse [e101 z doses (00s zet - 000 szz)1ueg 000 ort se|geN9001 soUJo pue eped| + 000 ozb ‘selojusnu} vos SE ‘syesse juauing: £00009 soPpuen, + 000 0LF quewidinbg L000 922 sBuiping 1 000 091 ue] 50955 sjesse quauino-UoN, syessy u $102 SUN O€ UO SpKez Jo jeMepUM Sy) BUIMO||O) SISPEI| WEA JO UOHISOd jeoUBUY Jo TUAUIAIEIS au OFDENKY (0 a 0S2 B6E sz £82 00S SLL UN. (ya tea ooosss | ooozoe | oooser | ooo eee 000 s22 ooo zoe | dooce | d0086€ 0sZ 868 (@osz eez | “W)oos sir uN pp tea 00S EL (200s Zeb ued} OSé 861 (@osz 86+ | {%09)ue07| 000 001 000 001 ‘908 quaund | 000 0& (2)ooost | (z)ooost CLS € 000 S49 000 Zoe 000 SEL 000 8&2 4a ted | 000 ST (ose € Coos + (ose 9 snidins ney a a u xu a ul u SEEN FeIOL 1 Vv 4 wrouf v 4 ‘Syunoooe [eyes STSUe br 02 SUNT OE TE Siepell Hel jo Webpayrereuep (q