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Unit 12-Question 12-A Sol (2023)

The document provides financial statements and notes for MTL Limited for the reporting period ended 30 June 20x9, including a statement of comprehensive income, earnings per share, and notes on finance costs, other income, income from financial assets, and tax calculations.

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shirleygebenga020829
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22 views

Unit 12-Question 12-A Sol (2023)

The document provides financial statements and notes for MTL Limited for the reporting period ended 30 June 20x9, including a statement of comprehensive income, earnings per share, and notes on finance costs, other income, income from financial assets, and tax calculations.

Uploaded by

shirleygebenga020829
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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QUESTION 12-A (SUGGESTED SOLUTION)

MTL LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE REPORTING PERIOD
ENDED 30 JUNE 20x9
Note R

Revenue 1 607 000


Cost of sales (205 000)
Gross profit 402 000
Other income 3 14 000
Administrative expenses (20 000)
Other expenses (balancing figure) (244 000)
Finance charges 2 (3 000)
Income from financial assets 4 10 000
Profit before tax (Cal. 1) 5 159 000
Income tax expense 7 (48 000)
Profit for the period 111 000

Earnings per share 8 R11.10

MTL LIMITED
NOTES TO THE FINANCIAL STATEMENTS ON 30 JUNE 20x9

1. Finance costs

Bank interest (3 000)

2. Other income

Management fees (5 500 + 500 = R6 000) 6 000


Leasing income (2 000 + 1 000) 3 000
Profit from sale of asset 5 000
14 000

3. Income from financial assets

Unlisted - Dividends (ABC (Pty) Ltd) 2 000


Listed – Dividends (AL Ltd) 5 000
(*Un)listed - interest (Current account) 3 000
(*Assumption) 10 000
QUESTION 12-A (SUGGESTED SOLUTION - CONTINUED)

4. Profit before tax

Profit before tax is shown after the following items had been taken into account, amongst others:

Profit on disposal of fixed assets 5 000


Depreciation - furniture (13 000)
Employee benefit expense (150 - 35 - 30) (85 000)
Auditors' remuneration
- For audit (6 000)
- Special investigation (3 000)
- Audit costs (1 000)
Uncollectable debts (52 000)
Loss on share transactions (8 000)
Directors’ remuneration (Cal. 4)
- Emoluments
- Executive directors 86 000
- Non-executive directors 1 000

6. Tax

Comprising:

SA normal tax
Current tax - for the year 51 000
- prior year - overprovision (3 000)
Tax per Statement of Comprehensive Income 48 000
QUESTION 12-A (SUGGESTED SOLUTION - CONTINUED)

CALCULATIONS

1. Profit before tax


R R
Sales (Cal. 2) 607 000
Management fees 6 000
Leasing - Subsidiary 2 000
Leasing - Other customers 1 000
Interest received 3 000
Profit disposal of fixed assets 5 000
Dividends received 7 000
631 000
Less: Cost of sales 205 000
Depreciation 13 000
Bank fees 4 000
Loss on sale of shares 8 000
Salaries and wages 150 000
Administrative expenses 20 000
Uncollectable debts 55 000
Auditors’ remuneration 10 000
Advertising 5 000 470 000
616 000

2. Income
Given 670 000
Less: Sales returns (60 000)
Net sales 610 000
Leasing - AL Limited (2 000)
- Other (1 000)
607 000

3. Other income
Profit on disposal of plant 5 000
Management fees 6 000
Leasing income 3 000
14 000

4. Directors’ remuneration
Executive directors
Emoluments:
- Salary - Financial director 30 000
- Salary - Managing director 35 000
- Use of vehicles (6 000 x 2) 12 000
- Entertainment allowance 2 000
- Pension contributions 5 000
- Allowance for attending meetings 2 000
86 000
Non-executive directors
Emoluments:
- Allowance to chairman 1 000
1 000

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