Activity 6: (Taken from November 2015) COMPANY FINANCIAL STATEMENTS AND AUDIT REPORT (60 marks; 35 minutes) 6.1 PRIDONA LIMITED The following information relates to Pridona Limited. The financial year ended on 30 June 2015. The business uses the perpetual (continuous) inventory system. REQUIRED: 6.1.1 Refer to Information B. Calculate the correct net profit after tax for the year ended 30 June 2015. Indicate a + for increase and a for decrease. (13) – 6.1.2 Prepare the Retained Income Note on 30 June 2015. (11) 6.1.3 Prepare the Balance Sheet on 30 June 2015. Where notes are NOT required, workings must be shown. (30) INFORMATION: A. List of balances/totals on 30 June 2015: BALANCE SHEET ACCOUNTS SECTION Ordinary share capital R5 600 000 Retained income (1 July 2014) 2 700 000 Mortgage loan: Custom Bank 262 200 Fixed assets 8 950 000 Trading stock 203 200 Debtors' control 316 000 Provision for bad debts (1 July 2014) 11 400 Cash and cash equivalents (balancing figure) ? SARS: Income tax (provisional tax payments) 725 000 Income receivable (accrued) 5 200 Creditors' control 261 000 B. Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information: (i) Trading stock on 30 June 2015 was valued at R191 900. (ii) Provision for bad debts must be adjusted to R9 000. (iii) Rent for July 2015, R2 800, had been received in advance. (iv) An annual insurance premium of R6 000 was paid for the period 1 April 2015 to 31 March 2016. (v) The auditor discovered that the profit on disposal of a vehicle, R6 800, was incorrectly shown as a loss. (vi) Income tax amounts to R750 000 for the year.
Activity 6: (Taken from November 2015) COMPANY FINANCIAL STATEMENTS AND AUDIT REPORT (60 marks; 35 minutes) 6.1 PRIDONA LIMITED The following information relates to Pridona Limited. The financial year ended on 30 June 2015. The business uses the perpetual (continuous) inventory system. REQUIRED: 6.1.1 Refer to Information B. Calculate the correct net profit after tax for the year ended 30 June 2015. Indicate a + for increase and a – for decrease. (13) 6.1.2 Prepare the Retained Income Note on 30 June 2015. (11) 6.1.3 Prepare the Balance Sheet on 30 June 2015. Where notes are NOT required, workings must be shown. (30) INFORMATION: A. List of balances/totals on 30 June 2015: BALANCE SHEET ACCOUNTS SECTION Ordinary share capital R5 600 000 Retained income (1 July 2014) 2 700 000 Mortgage loan: Custom Bank 262 200 Fixed assets 8 950 000 Trading stock 203 200 Debtors' control 316 000 Provision for bad debts (1 July 2014) 11 400 Cash and cash equivalents (balancing figure) ? SARS: Income tax (provisional tax payments) 725 000 Income receivable (accrued) 5 200 Creditors' control 261 000 B. Net profit before tax of R2 493 600 was determined BEFORE taking into account the following information: (i) Trading stock on 30 June 2015 was valued at R191 900. (ii) Provision for bad debts must be adjusted to R9 000. (iii) Rent for July 2015, R2 800, had been received in advance. (iv) An annual insurance premium of R6 000 was paid for the period 1 April 2015 to 31 March 2016. (v) The auditor discovered that the profit on disposal of a vehicle, R6 800, was incorrectly shown as a loss. (vi) Income tax amounts to R750 000 for the year.