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Prepare the Retained Income Note for the year ended 28 February 2023 - NSC Accounting - Question 2 - 2023 - Paper 1
Question 2
Prepare the Retained Income Note for the year ended 28 February 2023. Calculate the following figures for the 2023 Cash Flow Statement: Change in loan Proceeds fro... show full transcript
Worked Solution & Example Answer:Prepare the Retained Income Note for the year ended 28 February 2023 - NSC Accounting - Question 2 - 2023 - Paper 1
Step 1
Prepare the Retained Income Note for the year ended 28 February 2023.
Answer
Retained Income Note
Balance at beginning of year: R237 400
add: Net profit after tax: R1 526 000
less: Shares repurchased: R216 000 (180,000 shares at R1.20)
less: Ordinary share dividends: R797 800 (R1.00 per share)
interim dividends: R342 000 (1,070,000 shares at R0.32)
Final Dividends: R575 400
Balance at end of year: R629 600
Step 2
Step 3
Step 4
Step 5
Calculate the following financial indicators on 28 February 2023: Current ratio
Answer
Current ratio:
Total current assets: R1 479 600
Total current liabilities: R822 000
Current ratio calculation:
ext{Current Ratio} = rac{ ext{Total Current Assets}}{ ext{Total Current Liabilities}} = rac{1 479 600}{822 000} = 1.8
Step 6
Calculate the following financial indicators on 28 February 2023: Net asset value
Answer
Net asset value (NAV):
Calculation:
ext{NAV} = rac{ ext{Ordinary Share Capital} + ext{Retained Earnings}}{ ext{Total Shares}} imes 100
- Ordinary Share Capital: R13 959 500
- Retained Earnings: R629 600
NAV result: R1 064.9 cents
Step 7
Calculate the following financial indicators on 28 February 2023: % return on total capital employed (ROTCE)
Answer
% return on total capital employed (ROTCE):
Calculation:
ext{ROTCE} = rac{ ext{Net Profit After Tax}}{ ext{Average Capital Employed}} imes 100
- Net profit after tax: R1 526 000
- Average capital employed: R20 343 500
ROTCE result: 13.9%