NSC Accounting2024 · Paper 1 · Paper 1 (English)

COMPANY FINANCIAL STATEMENTS (55 marks; 45 minutes) The information relates to Ivory Park Ltd for the financial year ended 29 February 2024. REQUIRED: 1.1 Refer to Information B (i) for fixed assets: Calculate the following: 1.1.1 Depreciation on equipment on 29 February 2024 (2) 1.1.2 Cost price of vehicles on 29 February 2024 (4) 1.1.3 Depreciation on vehicles on 29 February 2024 (5) 1.1.4 Profit/Loss on vehicle traded in on 1 September 2023 (5) 1.2 Complete the Statement of Comprehensive Income for the year ended 29 February 2024. (39) NOTE: Some amounts are provided in the ANSWER BOOK. INFORMATION:

1. Balances/totals, among others, that appeared in the books on: 29 Feb. 2024 R 28 Feb. 2023 R Mortgage loan: Phambili Bank 744 100 987 700 Equipment at cost 852 000 852 000 Accumulated depreciation on equipment 472 500 344 700 Vehicles at cost ? 1 250 000 Accumulated depreciation on vehicles ? 420 000 Trading stock 654 500 Debtors' control 516 600 Provision for bad debt ? 29 520 SARS: Income tax (provisional tax payments) 340 000 Sales ? Cost of sales 4 780 900 Audit fees 79 000 Service fee income 1 757 700 Sundry operating expenses 119 900 Bad debts 24 780 Packing material 66 550 Salaries and wages (including contributions) 1 425 600 Insurance 100 800 Rent income 158 100 Interest income ? Directors' fees ? Interest on loan 149 400 Dividends on ordinary shares 250 000
2. Adjustments and additional information: (i) Fixed assets: Equipment:  No equipment was bought or sold during the year. Vehicles:  An old vehicle was traded in on 1 September 2023 for a new vehicle, costing R320 000. The trade-in value received was R153 660. The following extract of the vehicle sold was taken from the Fixed Asset Register: Cost price: R240 000 Date purchased: 1 July 2021 Rate of depreciation: 20% p.a. on the diminishing-balance method FINANCIAL YEAR END DEPRECIATION ACCUMULATED DEPRECIATION 28 February 2022 R32 000 R32 000 28 February 2023 R41 600 R73 600 1 September 2023 ? ?  Vehicles are depreciated at 20% p.a. on the diminishing-balance method.  Depreciation on the old remaining vehicles was R132 720. (ii) The company maintains a mark-up of 60% on cost. Note that goods costing R115 000 (included in cost of sales) were sold at a mark-up of 40% on cost to internal employees. (iii) Physical stocktaking on 29 February 2024 revealed the following:  Trading stock, R647 100  Packing material used during the financial year, R58 700 (iv) Provision for bad debts must be adjusted to 5% of the outstanding debtors. (v) Monthly insurance premiums were fixed for the past three years and were paid up to 31 May 2024. (vi) A tenant is renting an office from Ivory Park Ltd. Rent for this office has been received up until 30 April 2024. Rent was decreased by 8% on 1 December 2023 on the office rented. (vii) One employee was omitted from the Salaries Journal of February 2024. His net monthly salary was R19 340 after 35% deductions were made for his pension and personal tax and R2 500 deducted for medical aid. The employer contributes 10% of his gross salary on behalf of employees towards pension. (viii) The company had two directors who received a combined annual fee of R1 065 200 after their monthly fees were increased by R5 800 each on 1 August 2023. A third director joined the company on 1 November 2023 and received the same monthly fee as the other directors, excluding the increase of R5 800 per month. (ix) Net profit after tax, R992 160, was calculated after taking into account all the adjustments above. Income tax is calculated at 28% of the net profit.

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