nn mag 1H INDEPENDENT sam INSTITUTES Mi EDUCATION MODULE NAME: MODULE CODE: ] ‘ACCOUNTING 3A ‘ACBP7321, | ‘ACCOUNTING 3A ‘ACBP7311 ‘ASSESSMENT TYPE: TEST [PAPER AND MEMORANDUM) TOTAL MARK ALLOCATION: _| 60 MARKS =a ‘TOTAL HOURS: __] HOUR (+5 minutes reading time) ae) INSTRUCTIONS: 4. Please adhere to all instructions in the assessment booklet. 2 Independent work is required. 3. Five minutes per hour of the assessment to a moximum of 15 minutes is dedicated to reading time before the start of the assessment. You may make notes on your question ‘poper, but not in your answer sheet. Calculators may not be used during reading time. 4... You may not leave the assessment venue during reading time, or during the first hour or during the last 15 minutes of the assessment. Ensure that your name is on all pieces of poper or books that you will be submitting. Submit all the pages of this assessment’s question paper os well as your answer script. 6. Answer all the questions on the answer sheets or in answer booklets provided. The phrase “END OF PAPER’ will appear after the final set question of this assessment. 7. Remember to work at a steady pace so that you are able to complete the assessment within the allocated time. Use the mark allocation as a guideline as to how much time to spend on each section. ‘Additional instructions: 4. Thisis CLOSED BOOK assessment. 2 Coleviators are allowed. 3. Answer All Questions. 4. Showaall calculations, where applicable (marks may be awarded for this). © Te venperaert wattte & Lescatin (Fy) tnt 2072 Paar torewn Glasgow timited acquired 300000 ordinary shares on 2anuary 2018 in company onthe Johannesburg Stock Exchange, Glasgow tented to hold hese Shares 958 love term investment and nat fr trading purposes. The Director of Glasgow Limited irevorahy lected antl ecopnition to lssity tis investment in shares as mentured a fae valve through other comprehensive income (designated) Glasgow Limited purchased these shares at R5O each, excluding transaction costs which amounted to 10% of the price per share. The transaction costs were pad in cash by Glasdow LUmited on 1 January 2018, Goth Glasgow Limited and Batic Limited have a 34 December year end. ‘The market value per share on 31 December 2018 was RISO. Glasgow Limited sold the shares on 31 December 2019 at R120 per share, Glasgow Lited's accounting policy states tha the accumulated gain or los in the mark-to ‘market reserves in other comprehensive income must be transferred to retained earnings on de- ecopnition of the financial asset. Rsguired: 1.1 The classification referred ton FRS 9: Financial instruments determines how © ‘nancial Instruments are accounted fr inthe financial statements Briefly discuss the two classification categories of financial lablties according to 1FRS 9: Financial instruments. In addition, explain how transaction costs are treated In both classifications. 1.2 A compound financial instrument contains two components. What are these 9) components and how is exch component calculated? 3.3 Prepare allthe journal entses forthe sbove transactions, Inthe fnanclal records of (24) Glasgow Led, for the years ended 31 December 2018 and 31 December 2019 In sccordance with the requirements of IAS32:Flnanclal instruments. Journal narrations gre required,2 xn question? tt 201 For each ofthe Items listed below and by applying the classification principles outlined In 1AS 32: Financial Instruments, state whether the lems would be classified as a financial asset, financlal habilty, an equity instrument or none of these In the records of Basson Limited. For each answer, briefly motivate why you have chosen the classification. Required: 2a 2.1. Basson Limited issued ordinary shares of R150 000 to Scott Limited. @ 2.2.2 Basson Limited bought equipment for cash for R210 000, @) 2.2.1.3 Basson Limited sued debentures to Sage Limited. These debentures pay (2) annual interest of 10% for five years and on the maturity date, Basson Limited wil pay back the debenture par value of 85.000 000. 2.1.4 Bason Limited Invested in ordinary shares in Belgravia Limited as along- (2) term investment and willreceive dvidends 0.2.1.5 Basson Limited holds debentures isued by Santago Limited. Basson e Lmited receives annual interest of 8% and willbe paid # lump-sum of £8300 000 on the maturity date in three yea 5) ‘Jomo Limited isa company that sells school uniforms to schools In Soweto, The company’s year ‘end ls 31 December. Jomo Limited entered into the following transaction during the financial year ‘ending 31 December 2021: ‘Jomo Limited sold schoo! uniforms to schools In Soweto tothe value of Ri 800 000 (selling price) Jn December 2023. Jomo Limited's mark up on cost 20%. In compliance with the Consumer Protection Act of South Altice, Jomo Limited has a policy that ifthe goods are defective, the ‘customer must return ther within 6 months and afl refund of the sales value of the goods sold willbe made. Management estimeted based on previous sales made that 12% of sales of schoo! ‘uniforms might be returned. The tale of school uniforms has been Identified as the sole performance obligation In thit convact202 2 Required: Jomo ing records the account! Prepare the journal entries to record the transaction above, nt! ts of he requiremen dance with tl Limited, for the financial year ended 31 December 2021 In actor IFRS 15 ~ Revenue from contracts with customers. Journal narrations are not required. END OF PAPER