SUPPLEMENTARY ONLINE SUMMATIVE ASSESSMENT

Bachelor of Public Administration

Bachelor of Business Administration

Bachelor of Commerce in Digital Marketing

Bachelor of Commerce in Project Management

Bachelor of Commerce in International Business

PROGRAMME Bachelor of Commerce in Financial Management

Bachelor of Commerce in Marketing Management

Bachelor of Commerce in Supply Chain Management

Bachelor of Commerce in Human Resource Management

Bachelor of Commerce in Information and Technology Management

Bachelor of Commerce in Tourism and Hospitality Management (New)

MODULE Financial Reporting and Analysis

YEAR One (1)

INTAKE January 2024 Semester 2

DATE 15 January 2024

TOTAL MARKS 100

Answer ALL questions. (100 MARKS)
QUESTION 1 (20 Marks)
REQUIRED
Prepare the Statement of Comprehensive Income for the year ended 29 February 2024. Some of the amounts
have been entered in the answer book for you.
INFORMATION
The information given below was extracted from the accounting records of Montana Traders on 29 February
2024, the end of the financial year.
PRE-ADJUSTMENT TRIAL BALANCE AS AT 29 FEBRUARY 2024
Debit (R) Credit (R)
Balance sheet accounts section
Capital 1 652 238
Drawings 109 488
Land and buildings 1 254 000
Vehicles at cost 924 000
Equipment at cost 660 000
Accumulated depreciation on vehicles 528 000
Accumulated depreciation on equipment 368 000
Fixed deposit: Oslo Bank (12% p.a.) 198 000
Trading stock 154 000
Debtors control 176 000
Provision for bad debts 10 000
Bank 116 000
Cash float 8 000
Creditors control 182 000
Mortgage loan: Oslo Bank (20% p.a.) 330 000
Nominal accounts section
Sales 2 076 000
Cost of sales 786 000
Debtors allowances 12 000
Salaries and wages 586 000
Bad debts 18 000
Stationery 30 000
Rates and taxes 58 000
Motor expenses 32 000
Advertising 22 000
Telephone 44 000
Electricity and water 66 000
Bank charges 8 000
Insurance 12 000
Interest on mortgage loan 60 500
Interest on fixed deposit 14 850
Rent income 172 900
5 333 988 5 333 988
Adjustments and additional information
1. On 27 February 2024, trading goods with a cost price of R6 000 were used as prizes in an advertising
campaign. No entry was made for this transaction.
2. Stocktaking on 29 February 2024 revealed the following inventories:
2.1 Trading inventory R146 000
2.2 Stationery R1 000
3. A direct deposit of R8 000 was made into the account of Montana Traders by K. Lottering, whose
account was previously written off as irrecoverable.
4. The provision for bad debts must be adjusted to 5% of book debts.
5. The telephone account for February 2024 was not paid, R2 100.
6. No entry was made for the cost of servicing the vehicles, R10 000.
7. Bank charges of R800 that appeared on the bank statement for February 2024 were not recorded.
8. The insurance account includes an annual premium of R2 400 that was paid for the period 01
December 2023 to 30 November 2024.
9. Part of the building was leased to a tenant. Rent has been received for the period 01 March 2023 to
31 March 2024. The rental increased by 10% on 01 January 2024. Make the necessary adjustment.
10. Provide for the outstanding interest on loan for February 2024.
11. The investment in fixed deposit at Oslo Bank was made on 01 March 2023. Provide for the interest
due to Montana Traders.
12. Provide for depreciation as follows:
12.1 On vehicles at 20% per annum using the diminishing balance method.
12.2 On equipment at 10% per annum on cost.
QUESTION 2 (20 Marks)

REQUIRED
Prepare the Statement of Changes in Equity for the year ended 29 February 2024.
INFORMATION
The information given below was extracted from the accounting records of Mildew Traders, a partnership
business with Milly and Dewey as partners.
Balances in the ledger on 29 February 2024 (end of the financial year)
Debit Credit
R R
Capital: Milly 1 000 000
Capital: Dewey 600 000
Current a/c: Milly (01 March 2023) 50 000
Current a/c: Dewey (01 March 2023) 20 000
Drawings: Milly 300 000
Drawings: Dewey 400 000

The following must be considered:

(a) The net profit according to the Statement of Comprehensive Income amounted to R900 000 on 29
February 2024.
(b) The partnership agreement makes provision for the following:
■ Interest on capital must be provided at 12% per annum on the balances in the capital accounts. Note:
Milly increased her capital by R200 000 on 01 September 2023. On the same date, Dewey decreased
his capital by R200 000. The capital changes have been recorded.
■ The partners are entitled to the following monthly salaries from 01 March 2023 to 30 November 2023:
Milly R9 000
Dewey R8 000
Each partner’s salary was increased by R1 000 per month with effect from 01 December 2023.
■ Milly is entitled to a bonus of 10% of the net profit before any appropriations are made.
■ Milly and Dewey share the remaining profits or losses equally.
QUESTION 3 (20 Marks)
REQUIRED
Use the information provided below to prepare the Statement of Financial Position of Kansas Limited as at 30
June 2024. The notes to the financial statements are not required.
INFORMATION
The following balances were obtained from the accounting records of Kansas Limited after all the adjustments
and closing transfers were completed on 30 June 2024, the end of the financial year.
R
Inventory 420 000
Debtors control 120 000
Equipment 2 640 000
Accumulated depreciation on equipment 240 000
Cash float 18 000
Creditors control 272 000
Provision for bad debts (Refer to Note 1 below) ?
Accrued income 12 000
Ordinary share capital (200 000 shares issued) 1 548 000
Retained income 720 000
South African Revenue Services: Company tax payable (Refer to Note 2 below) ?
Bank (DR) 132 000
Accrued expenses 84 000
Shareholders for dividends/Dividends payable (Refer to Note 3 below) ?
Loan: Med Bank (Refer to Note 4 below) 300 000

Note:
1. The provision for bad debts balance on 30 June 2023 was R5 000. The provision for bad debts must
be increased by R1 000.
2. The tax calculated on the pre-tax profit for the year amounted to R180 000. Provisional company tax
payments for the year ended 30 June 2024 totalled R156 000.
3. The final dividend declared on 30 June 2024 was 74 cents per share.
4. Payments totalling R80 000 will be made to Med Bank during the next financial year. This amount
includes interest on loan of R30 000.
QUESTION 4 (20 Marks)

REQUIRED
Study the information provided below and prepare the Cash Flow Statement of Dysan Limited for the year
ended 31 December 2024.
INFORMATION
Extracts of the financial statements of Dysan Limited are as follows:
Dysan Limited
Statement of Comprehensive Income for the year ended 31 December 2024
R
Sales 6 210 000
Cost of sales (3 030 000)
Gross profit 3 180 000
Selling and administrative expenses (1 260 000)
Operating profit 1 920 000
Interest expense (120 000)
Profit before tax 1 800 000
Company tax (480 000)
Profit after tax 1 320 000
Statement of Financial Position as at 31 December:
Assets 2024 (R) 2023 (R)
Land and buildings 3 300 000 2 820 000
Plant and machinery 1 860 000 1 590 000
Investments 450 000 0
Inventories 720 000 750 000
Accounts receivable 765 000 480 000
Cash and cash equivalents 135 000 120 000
7 230 000 5 760 000

Equity and liabilities

Ordinary share capital 3 000 000 3 000 000
Retained earnings 1 680 000 900 000
Non-current liabilities 1 200 000 600 000
Accounts payable 720 000 840 000
Company tax payable 240 000 120 000
Dividends payable 390 000 300 000
7 230 000 5 760 000

Additional information
■ Selling and administrative expenses include depreciation as follows:
R
Buildings 180 000
Plant and machinery 300 000

■ Property, plant and equipment were purchased during the year but there were no disposals.
■ The total dividends for the year ended 31 December 2024 amounted to R540 000.
■ 750 000 ordinary shares were issued by the company.
■ All purchases and sales of inventories are on credit.
■ Credit terms from suppliers are 60 days.
■ The market price of an ordinary share of Dysan Limited was R7.20 on 31 December 2024.
QUESTION 5 (20 Marks)

REQUIRED
Use the information provided in Question 4 to answer the following questions:
5.1 Calculate the following ratios for 2024 only. Note: Use the formulas provided in the formula sheet
only (that appear after QUESTION 5). The answers to the ratios must be expressed to two decimal
places and be fully stated e.g. 2.15:1; 24.67% etc.
5.1.1 Profit margin (Net profit margin) (2 marks)
5.1.2 Debtor collection period (2 marks)
5.1.3 Creditor payment period (2 marks)
5.1.4 Current ratio (2 marks)
5.1.5 Return on equity (2 marks)
5.1.6 Earnings per share (2 marks)
5.1.7 Dividend yield (2 marks)

5.2 Refer to your answers in question 5.1 and comment on the following:
5.2.1 The amount of time that the company takes to pay its creditors. (2 marks)
5.2.2 The ability of the company to pay its short-term debts. (2 marks)
5.2.3 The profitability of the company (expressed as a percentage) from the shareholders
point of view. (2 marks)

END OF PAPER
TOTAL: 100 MARKS
 FORMULA SHEET

Gross profit X 100 Total debt X 100

Sales 1 Total assets 1

Profit after tax X 100 Non-current debt X 100

Sales 1 Equity 1

Operating profit X 100 Operating profit

Total assets 1 Interest expense

Profit after tax X 100 Profit after tax X 100

Equity 1 No. of ordinary shares issued 1

Current assets Dividends for the year X 100

Current liabilities No. of ordinary shares issued 1

Current assets – Inventory Market price per share

Current liabilities Earnings per share

Cost of sales Earnings per share X 100

Average inventory Market price per share 1

Accounts receivable X 365 Dividend per share X 100

Credit sales 1 Market price per share 1

Accounts payable X 365

Credit purchases 1