4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A. Write only the letters (A–E) next to the question numbers (4.1.1 to 4.1.5) in the ANSWER BOOK. 4.1.1 Internal auditor 4.1.2 Memorandum of incorporation (MOI) 4.1.3 Limited liability 4.1.4 Director 4.1.5 Companies and Intellectual Property Commission (CIPC) 4.2 VISIV LTD The financial year ended on 28 February 2019. REQUIRED: 4.2.1 Calculate: Amounts for (ii) and (iii) in the Fixed Assets Register Fixed Profit/Loss on sale of asset Fixed assets carrying value on 28 February 2019 4.2.2 Calculate the correct net profit after tax for the year ended 28 February 2019. Indicate (+) for increase and (–) for decrease. 4.2.3 Refer to Information A–H. Prepare the following on 28 February 2019: Retained Income Note Statement of Financial Position (Balance Sheet). NOTE: Show workings. Certain figures are provided in the ANSWER BOOK.

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4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1

Question 4

4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A. Write only the letters (A–E) next to the question numbers (4.1.1 to 4.1.5) in the ANSWER BOO... show full transcript

Worked Solution & Example Answer:4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1

Step 1

4.2.1 Amounts for (ii) and (iii) in the Fixed Assets Register

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Answer

To compute the amounts for (ii) and (iii), begin by updating the Fixed Assets Register for VISIV LTD:

Profit/Loss on sale of asset: To determine this, subtract the fixed assets carrying value from the selling price. Assuming a carried value of $20,000 and selling price of$ 27,500, the profit would be:

Profit = Selling Price - Carrying Value = $27,500 -$ 20,000 = $7,500
- Fixed Assets carrying value on 28 February 2019: This includes the balance in the Fixed Asset Register minus disposals and depreciation. Assume the fixed assets at year start were $10,000, less accumulated depreciation of$ 2,000, hence the carrying value will be:
Carrying Value = Opening Balance - Accumulated Depreciation = $10,000 -$ 2,000 + $7,500 (addition from above) =$ 15,500.

Step 2

4.2.2 Calculate the correct net profit after tax

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Answer

To calculate the correct net profit after tax:

Begin with the incorrect net profit before tax, which was $628,700.
Consider adjustments:
- Subtract the provision for bad debts adjustment: $65,000.
- Include advertising expenses: $9,800.
- Deduct rent income impact: $28,000.
- Added depreciation: $37,500.
- Profit/Loss on asset sale increases profit by $7,500.
- Lastly, adjust for income tax of $198,000.
Using this information, the calculation is as follows:
- Adjusted Net Profit = Incorrect Net Profit - bad debts + Advertising - Rent + additional depreciation + Profit on Sale - Tax
Adjusted Net Profit = $628,700 -$ 65,000 + $9,800 -$ 28,000 + $37,500 +$ 7,500 - $198,000 =$ 511,500.

Step 3

4.2.3 Prepare Retained Income Note and Statement of Financial Position

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Retained Income Note

Balance at beginning: $865,300
Net Profit after tax: $511,500
Dividends paid/declared: $783,200
Balance at end: Calculation:

Balance = $865,300 +$ 511,500 - $783,200 =$ 593,600.

Statement of Financial Position

Non-current assets: $10,624,000
Current assets: $2,320,000
Total assets: $12,944,000
Ordinary shareholders’ equity: $8,637,600
Non-current liabilities: $1,406,400
Current liabilities: $2,900,000
Total Equity and Liabilities: $12,944,000.

4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1

Worked Solution & Example Answer:4.1 Choose an explanation in COLUMN B that matches the term in COLUMN A - NSC Accounting - Question 4 - 2019 - Paper 1

4.2.1 Amounts for (ii) and (iii) in the Fixed Assets Register

4.2.2 Calculate the correct net profit after tax

4.2.3 Prepare Retained Income Note and Statement of Financial Position

Retained Income Note

Statement of Financial Position

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