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FAC3702 EXAM PACK 2022
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FAC3702 EXAM PACK 2022;Recent exam questions and answers and summarized notes for exam preparation. 4 for assistance. All the best on your exams!!
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FAC3702 EXAM PACKEXAM REVISION PACK 2022
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If you are reading this message then you are doing(FAC3701) with UNISA. These are being compiled by our
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,QUESTION 1
The following financial information relates to ABC Limited for the year ended 30 April 2014:
1. Machine
Date R
Cost 1 May 2011 500 000
Residual value 1 May 2011 50
Revalued amount on a net replacement value basis 000 30 April 2014 410 000
Depreciation rate - 20% per annum straight-line
The tax base on 1 May 2013 was R200 000 which would be deductible in equal amounts on
30 April 2014 and 30 April 2015 against taxable income.
On 1 May 2013 there was a deferred tax liability of R36 000 due to the temporary difference in respect
of the wear and tear on the machine.
The estimates of the original useful life and residual value remained unchanged after the revaluation.
During 2014 the board of directors decided to disclose the machine in future at the net
replacement value. The revaluation on 30 April 2014 was performed by a sworn appraiser, W Mass,
on the net replacement value basis with reference to prices of similar new assets in an active
market. It is company policy that the revaluation surplus will be realised on disposal of the machine.
2. Investment property
On 31 August 2013 ABC Limited sold its only investment property for R1 600 000. Since ABC
Limited had already decided during the financial year ended 30 April 2013 to sell the investment
property, the 2004 financial statements reflected a deferred tax balance that was correctly
calculated and provided based on the intention to sell. Investment property was previously
accounted for according to the fair value model.
No tax allowances were granted on the property.
Details of the disposed investment property are as follows:
Deferre
Fair Temporar d tax
Date Cost value y liability
R R difference R
R
Land 1 November 2011 250 000 - -
Land 30 April 2013 - 350 000 -100 15 000
Building 1 November 2011 750 000 - 000 -
Building 30 April 2013 - 1 100 000 -350 52 500
000
1 000 000 1 450 000 450 000 67 500
, Rental income from the investment property for the current period amounted to R56 000.
Operating expenses incurred in 2014 in connection with the investment property while being
leased out were R22 000.
3. Profit before tax
The profit for the current period after taking into consideration all of the above-mentioned information
is R600 000.
4. Tax rate
The tax rate is 30% for all the applicable periods.
REQUIRED:
Disclose only the given information in the applicable notes to the annual financial statements
of ABC Limited for the year ended 30 April 2014. Your answer must comply with the requirements
of Generally Accepted Accounting Practice.
The following are not required:
- accounting policy notes
- comparative figures
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