A joint arrangement is an arrangement in which two or more parties have joint control.

1
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the rele
activities require the unanimous consent of the parties sharing
control. 1
The two types of joint arrangements are Joint operations and joint ventures. 1
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to assets,
obligation for the liabilities, (not on net basis) relating
to the arrangement. 1
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement through separate legal entity. 1
5
ASSIGNMENT 2 MEMO
Apple Group
Consolidated statement of Financial Position as at 28 February 2022

Non-current assets
Property plant and equipment (3,295,000+2,000,000+1,200,000-40,000+2,000+266,000)
Goodwill
Franchise rights (20,000-5,000)

Current assets
Inventories (450,000+500,000+150,000)

Accounts receivable (335,000+261,000)

Bank (200,000+100,000)

TOTAL ASSETS

Equity and liabilities

Share Capital N$2 shares

Retained earnings (3,340,000+60,900+36,000+10,000+5,000)

Other components of equity (250,000+7,000)
Non controlling interest (652,100+259,000)

Non-current liabilities
Long-term loan (1,895,000+675,000+200,000)

Current liabilities
Accounts payable (320,000+106,000+120,000)

Bank overdraft

TOTAL EQUITY AND LIABILITIES

N$ '000
2022

6,723,000
89,000 0.5
15,000 1

1,100,000 1

596,000 1
300,000 1

8,823,000

850,000 0.5

3,451,900 4.5
257,000 1
908,100 1

2,770,000 1

546,000 1

40,000 0.5

8,823,000

14
 W1
Analysis of equity of Blue Ltd
03/01/2021 100% 70% 30%
N$'000
Share Capital 1,020,000 714,000 306,000
Retained earnings 900,000 630,000 270,000
Other components of equity 70,000 49,000 21,000
Non-depreciable land 266,000 186,200 79,800
Contingent liability (5,000) (3,500) (1,500)
Building (40,000) (28,000) (12,000)
Assets and liabilities assumed at acquisition 2,211,000 1,547,700 663,300
Goodwill 89,000 132,300 (43,300)
Consideration and NCI 2,300,000 1,680,000 620,000
Consideration paid for additional shares (40%) 975,000
FV of equity interest previously held (30%) 705,000
Current year
Profit 87,000 60,900 26,100

- Preadjusted (980,000-900,000) 80,000

- Building Depreciation (40,000/20 years) 2,000
- Contigent Liability adjustment 5,000
Other component of equity (80,000 - 70,000) 10,000 7,000 3,000

2,397,000 1,747,900 649,100

W2
Analysis of equity of Colt Ltd N$'000

03-Jan-2021 100% 80% 20%

Share Capital 600,000 480,000 120,000
Retained earnings 300,000 240,000 60,000
Other components of equity 40,000 32,000 8,000
Franchise rights (960,000 - 600,000 - 300,000 - 40,000) 20,000 16,000 4,000
Assets and liabilities assumed at acquisition 960,000 768,000 192,000
Gain on bargain purchase (10,000) (68,000) 58,000
Consideration and NCI 950,000 700,000 250,000
Cash payment 300,000 1 should be stated in a
Building 250,000 1 should be stated in a
Deferred payment (FV=181.5; n=2; i=10; comp PV) 150,000 2 should be stated in a
Current year
Profit 45,000 36,000 9,000

- Preadjusted (350,000-300,000) 50,000

- Franchise amortisation (20,000/4 years) (5,000)
995,000 736,000 259,000
 0.5
0.5
0.5
1
1
1

0.5
1
1
1

1
2
1
1

0.5
0.5
0.5
2

0.5
1
1 should be stated in analysis
1 should be stated in analysis
2 should be stated in analysis

1
1
Revaluation gain
Fair Value of previously held interest in Blue 705,000
Carrying amount of previously held interest in Blue (700,000)
Cash 600,000
Share of profit 90,000
Share of revaluation gain 10,000

Revaluation gain 5,000

1

1
1
1

30
QUESTION 3 MEMO

Welwitschia Limited
Notes for the year ended 28 February 2022

I Income tax expense 2022

N$
Current tax expense 64,602
Deferred tax expense 53,798
Tax expense per statement of comprehesnive income 118,400

Tax rate reconciliation 2022

%
Statutory tax rate 32.00
Dividends not taxable by NAMRA (1) (3.81)
Fines not deductible by NAMRA (2) -
Effective Tax rate 28.19

Income tax expense 118,400

Profit/loss before tax 420,000
28.19%
(1) (50 000 x 32%)/420 000 x 100 = 3.81
(2) (15 000 x 32%)/-20 000 x 100)

II Deferred tax 2022

N$
Analysis of temporary differences:
Wear and tear allowances (C2) (54,758)
Rental income received in advance (C2) 2,560
Tax loss
Deferred tax asset/(liability) (52,198)

C1 Calculation of current tax expense

2022
N$
Accounting profit/(loss) before tax (given) 420,000
Permanent differences
Dividends received (50,000)
Dines paid -
Temporary differences
Wear and tear allowance (1) (186,000)
Depreciation - Machinery 89,280
Rent received in advance 8,000
Tax loss b/f (79,400)

Taxable income 201,880

Current tax expense @ 32% 64,602

(1) 558 000 x 1/3 = 186 000

 Marks

2021
N$
- 1
(1,600) 1
(1,600)

2021

%
32.00 0.5
- 1
(24.00) 1
8.00
4.5
-1,600
-20,000
8.00%

2021
N$

(23,808) 0.5
- 0.5
25,408
1,600 1
2

2021
N$
(20,000) 1

- 0.5
15,000 0.5

(186,000) 1
111,600 1
- 0.5
- 1

(79,400)
- 1

6.5
C2 Calculation of deferred tax expense
CA TB TD DTL P/L
N$ N$ N$ N$ N$
March 2020 - - - - -
-
 CA TB TD DTL
28-Feb-2021 N$ N$ N$ N$

Land 500,000 - 500,000 Exempt

Machinery (1) 446,400 372,000 (74,400) (23,808) Cr
P/L
N$

0.5
2
Tax loss -79,400 79,400 25,408 Dr
1,600 Dr

CA TB TD DTL
N$ N$ N$ N$
 2
(1,600)

P/L
N$
28 Feb 2022
Land 500,000 - 500,000 Exempt 0.5
Machinery (2) 357,120 186,000 (171,120) (54,758) Cr 2
Rent received in advance
(8,000) - 8,000 2,560 Dr 2
(52,198) Cr 53,798
Avail 22.0
Max
20.0
Question 4 memo
a)
In order to classify the lease either as an operating lease or finance lease the transfer of risks and rewards of
The contract's substance, rather than its legal form must be considered.
0.5
1
When any one of the following examples are met the lease must be classified as a finance lease:
The ownership of the asset is transferred at the end of the lease to the lessee
Ownership of the machine does not transfer to Mini-Tech Shop at the end of the lease term
The lessee has an option to purchase the asset at the end of the lease term at a value significantly less than the Mini-Tech Shop does not
have an option to puchase the machine.
The lease term is for a major part of the economic life.
The lease term of 6 years is a major part of the economic life of the machine of 7 years
The present value of the lease payments is equal at least substantially all of the fair value (estimated as at least The fair value of the
machine of N$ 1 250 000 is subtantially equal to the present value of the lease payments
The leased asset is of a specialized nature that only the lessee may use it without major modifications. The machine is of a specialized
nature.
0.5
1
0.5
1
0.5
1
0.5
1
0.5
1
The lease of the machine will therfore be classified as a finance lease. 1
10.0
b)
Calculation of interest rate implicit in the lease agreement
PV= 1,275,000 (1 250 000 + 25 000)
n= 6
PMT = 270,000 (300 000 -30 000)
FV= 320,000 (200 000 +120 000)
Comp i= 11.93
 1
0.5
1
1
0.5
n= 6 0.5
PMT = 270,000 0.5
FV= 200,000 1
i= 11.93 0.5
Comp PV 1,213,991 0.5
Dr Right-of-use-asset (SFP) Cr Lease liability (SFP) 1,213,991
1,213,991

Recognition of right-of-use-asset and lease liability

Dr Right-of-use-asset (SFP) 5,000
Cr Bank (SFP) 5,000
Recognition of initial direct costs
Dr Right-of-use-asset (SFP) 15,000
Cr Bank (SFP) 15,000
Recognition of installation costs

Dr Interest expense (P/L) Cr Lease liability (SFP) 144,829

144,829

Recognition of interest expense

Dr Lease liability (SFP) Cr Bank (SFP) 270,000

270,000

Recognition of lease payment

Dr Maintenance expense (P/L) 30,000

Cr Bank (SFP) / Accrued expense (SFP) 30,000

Recognition of maintenance expense

Dr Depreciation expense (P/L) 205,665

Cr Accumulated depreciation (SFP) 205,665

Recognition of depreciation expense

0.5
0.5
1
0.5
0.5
Calc above
0.5 Journal direction

0.5
0.5 Journal direction

0.5
0.5 Journal direction

1
0.5 Journal direction

0.5
0.5 Journal direction

0.5
0.5 Journal direction

0.5 P
0.5 Journal direction

1 Journal narrations (Must be present at all journals.)

15.0
Extract statement of comprehensive income for year ended 31 December 2019
N$
 Employee benefit expense 22,000,000.00
Short term employment benefit costs 20,000,000.00
Defined contribution plan expense 2,000,000.00

* employer’s contribution (11 000 000+9

000000)*10%
The employee’s contribution is in the gross
salary.

JOURNALS

01-Jan-2021 Dr Cr
J1 Short term employee benefit costs(P/l) 20 000 000
Bank (SoFP) 18 200 000
Accrued expense- contributions to plan (SoFP)
1 800 000

Defined contribution plan expenses (P/L)Employer

J2 2 000 000

Accrue expense –contribution plan(SoFP) 2 000 000

J3 Accrued expenses (P/L) 2 500 000
Bank (SoFP) 2 500 000
01-Jan-2020
J4 Accrued expense (sfp) 1 300 000
Bank (sfp) 1 300 000
 0.5
1
2

0.5

1
1

1
1
1

1
1
9
TOTAL 13