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1.1 Refer to information A - NSC Accounting - Question 1 - 2024 - Paper 1
Question 1
1.1 Refer to information A. The bookkeeper has recorded all the entries regarding fixed assets in the books. Complete the amounts denoted by (i) to (iii) on the Fix... show full transcript
Worked Solution & Example Answer:1.1 Refer to information A - NSC Accounting - Question 1 - 2024 - Paper 1
Step 1
Calculate the cost price of buildings at the beginning of the year.
Answer
To calculate the cost price of buildings at the beginning of the year, we take the carrying value as of 29 February 2024 and add any disposals or accumulated depreciation.
Cost Price = Carrying Value + Accumulated Depreciation
Cost Price = R9 421 300 + R420 000 = R9 841 300
Step 2
Calculate depreciation on vehicles.
Answer
For vehicles, we need to calculate the depreciation based on the cost and accumulated depreciation. The new vehicle cost is R260 000 with a depreciation rate of 15%.
Depreciation for Old Vehicle: Depreciation = (Cost - Accumulated Depreciation) x (Depreciation rate) Depreciation = (R786 000 - R526 000) x (15 ext{%}) = R39 000
Depreciation for New Vehicle: Depreciation = R260 000 x (15 ext{%}) = R39 000
Total Depreciation = R39 000 + R39 000 = R78 900
Step 3
Step 4
Calculate the correct net profit after tax for the year ended 29 February 2024.
Answer
To find the correct net profit after tax, we first obtain the net profit before tax and then adjust for tax, audit fees, and donations:
- Original Net Profit Before Tax = R1,150,000
- Audit Fees = -R45,600
- Donations = -R11,000
- Rent Income = +R26,000 (including extra from the noted amounts)
- Directors Fees = -R852,800
Total Net Profit Before Tax = R1,195,000
To finalize the calculation: Effective Tax Rate = 30 ext{%} Tax Amount = Net Profit Before Tax * Tax Rate = R1,195,000 * 0.30 = R358,500
Correct Net Profit After Tax = Net Profit Before Tax - Tax Amount = R1,195,000 - R358,500 = R836,500
Step 5
Complete the Statement of Financial Position on 29 February 2024.
Answer
In completing the Statement of Financial Position, we include both the assets and liabilities, ensuring all entries reflect the proper amounts from the calculations:
Total Non-Current Assets = R10,377,480 Total Current Assets = R4,225,500
Total Assets = R14,602,980
For Equity and Liabilities, we ensure that Ordinary Shareholders' Equity and Non-Current Liabilities accurately reflect the corrected financial information.
The calculations totaling for both assets and liabilities must equal, confirming the balance sheet is correctly stated.