FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTING AND AUDITING

ASSIGNMENT 1
BACC 230: FINANCIAL ACCOUNTING IIB
AUGUST- DECEMBER 2023

Instructions
1. All assignments must be typed using New Times Roman font size 12, 1.5 line spaced,
referenced using 6th Edition APA Guidelines, justified both sides, include a
standardized cover page and uploaded as a SINGLE PDF file.
2. It is the responsibility of the student to upload their assignments in time to avoid
inconveniences due to internet failure, system failure, power outages or any other
unforeseen circumstances. NO submission extensions will be granted by the
Department after the deadline.
3. All queries for this assignment must be directed to the Course Leader whose contact
details are on the List of Course Leaders available on MyVista.
4. Plagiarism is a serious academic offence. Credit will be given for well written and
referenced assignments. Please refer to the Tutorial Letter and other resources for
more information on academic writing.

ANSWER ALL QUESTIONS

ASSIGNMENT 1
QUESTION 1
a) Farai and Itai entered a joint venture to share profits or losses equally. They dealt in radios.
They both took active part in the business, each recording their own transactions. They had
no joint banking account or separate set of books.
2015
July 1 Farai bought radios for $800.
3 Farai paid for repairs $450.
4 Itai paid office rent $200 and advertising expenses $50.

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 6 Itai paid for packaging materials $20.
7 Itai bought radios for $350.
31 Farai sold radios and sales were completed on that date, totaling $1950.
Required
Show the relevant accounts in the books of both joint venturers. [15 marks]

b) Explain the term joint venture exposing the advantages and disadvantages of this form of
doing business in Zimbabwe. [10
marks]

QUESTION 3
HORD Ltd acquired 80 000 ordinary shares of SUB Ltd on 1 October 2022. On this date, the
balance of the general reserve and retained income accounts of SUB Ltd amounted to $8 000
and $16 000 respectively. The following are the abridged Statement of Financial Positions of
HORD Ltd and its subsidiary SUB Ltd at 30 September 2023.
Authorised and issued capital: HORD Ltd $ SUB Ltd $
Ordinary shares of $1 each 160 000 80 000
General Reserve 16 000 20 000
Unappropriated income 24 000 24 000
Long term liability 20 000 4 000
220 000 128 000
Fixed Assets: 82 000 70 000
Investment in SUB Ltd:
80 000 Ordinary shares at cost 112 000 --------
Net current assets 26 000 58 000
220 000 128 000

The abridged income statements of the two companies for the year ended 30 September 2023
are as follows:

HORD Ltd $ SUB Ltd $

Net income for the year 26 000 14 000
Dividends Received 6 000 --------
32 000 14 000
Transfer (12 000) (4 000)
Ordinary Dividend (16 000 ( 6 000)
Unappropriated income:
For the year 4 000 4 000
Beginning of the year 20 000 20 000

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 24 000 24 000

Required:
a) An Analysis of Shareholders’ Equity of SUB Ltd from acquisition to date. [ 5 marks]
b) Consolidated Income Statement of HORD Ltd and SUB Ltd for the year ended 30
September 2023. [ 10 marks].
c) Consolidated Statement of Financial Position as at 30 September 2023. [10 marks]

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