NSC Accounting Preparation of Financial Statements for companies: 4.1. CONCEPTS
Select a concept f

Question

4.1. CONCEPTS
Select a concept from the options provided that best describes the examples listed. Write the concept only next to the number (4.1.1 – 4.1.5) in the ANSWER BOOK.

Current assets; non-current assets; non-current liability; equity; current liabilities.

4.1.1 A fixed deposit that matures in five years' time.
4.1.2 Part of the net profit retained by the business for future expansions.
4.1.3 An amount receivable from SARS due to provisional tax payments being more than the income tax due.
4.1.4 A mortgage loan payable over 20 years.
4.1.5 Final dividends due to shareholders at financial year-end.

(5)

4.2.1 Prepare the following notes to the Balance Sheet:
- Ordinary Share Capital
- Retained Income

(7)
(10)

4.2.2 Complete the Balance Sheet on 30 April 2016.
Where notes are not required, show all workings.

(23)

INFORMATION:
A. Share capital and dividends:
On 1 May 2015, 650 000 shares were in issue.
On 1 November 2015, 150 000 additional shares were issued at R6.45 each.
On 27 April 2016, the company repurchased 75 000 ordinary shares from an old shareholder for R525 000. This was settled by cheque.
An interim dividend of 35 cents per share was paid on 31 October 2015.
A final dividend of 25 cents per share was declared on 30 April 2016.
All shares, including the repurchased shares qualified for final dividends.

B. Net profit and Income tax:
The net profit for the year (before tax) was R1 228 000.
Income tax amounted to R368 400.
Provisional income tax paid during the year amounted to R380 000.

C. Loan: BXT Bank
Interest on loan is capitalised. The loan statement from BXT Bank reflected the following:
Balance on 1 May 2015 248 000
Monthly instalments including interest
Interest capitalised 22 720
Balance on 30 April 2016
The business plans to pay R500 000 during the next financial year.

D. The following amounts were extracted from the post-adjustment trial balance on 30 April 2016:
Fixed assets at carrying value 4 042 000
Trading stock  600 000
Debtors control  111 860
Creditors control  148 000
Loan: BXT Bank 72 000 (Dr)

4.1. CONCEPTS Select a concept from the options provided that best describes the examples listed - NSC Accounting - Question 4 - 2016 - Paper 1

Worked Solution & Example Answer:4.1. CONCEPTS Select a concept from the options provided that best describes the examples listed - NSC Accounting - Question 4 - 2016 - Paper 1

4.2.1 Prepare the following notes to the Balance Sheet: Ordinary Share Capital

4.2.1 Prepare the following notes to the Balance Sheet: Retained Income

4.2.2 Complete the Balance Sheet on 30 April 2016.

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