TOPIC: concepts, analyses and interpretation of company ledger accounts

MARKS : 50
ISSUE DATE :
DUE DATE :
INSTRUCTIONS:
 ANSWER ALL QUESTIONS
 WRITE NEATLY AND LEGIBLE
 SUBMIT ON OR BEFORE DUE DATE
 SHOW ALL CALCULATIONS TO EARN PART MARKS
 NON-PROGRAMMABLE CALCULATORS MAY BE USED.
Question 1
1.1.1. Choose the correct word from those given in brackets. Write only the
word next to the question numbers.

1.1.2. The concept (limited /unlimited) liability ensures that shareholders are not
responsible for the debts of the business in the event of bankruptcy. (1)
1.1.3. The separate disclosing of significant items, such as interest expenses, is an
application of the (prudence/materiality) GAAP principle. (1)
1.1.4. (Directors /shareholders) are the owners of the business. (1)
[3]

INFORMATION:
Balances on 1 March 2022
 Ordinary share capital (1600 000) R3 200 000
 SARS (Income tax) CR R 60 000
 Retained income R1 600 000
TRANSACTIONS:
A. On 1 April 2022 the company issued further 900 000 ordinary shares at R3,00
this was not recorded.
B. At the beginning of the financial year an EFT was made to SARS to pay
amount due.
C. The company paid provisional tax of R400 000 on the 31st of March 2022.
D. A second provisional payment was paid to SARS.
E. On 31 January 2023 the directors decided to buy back 400 000 ordinary
shares at R5 per share from a dissatisfied shareholder. These shares qualify
for a final dividend.
F. A final dividend of 30 cent per share was declared on 28 February 2023.
G. The tax assessment state that the Income tax is R900 000, that is 30% of the
profit
 1.2. Use the format provided in the ANSWER BOOK to analyse transaction
number F, G and H in the accounting equation. [20]

1.3. Analyse the ledger accounts of Mzo LTD provided below and answer the

questions that follow:

General ledger of of Mzo LTD for the year ended 28 February 2023
Retained Income
Jan Marc
2023 CPJ 2022 b/d
31 Bank 1056 000 1 Balance 1600 000
Febr Feb
2023 c/d 2023 GJ
28 balance 1254 000 28 appropriatio 710 000
n

2310 000 2310 000

Mar
2023 b/d
1 Balance 1254 000

SARS - INCOME TAX

April Mar
2022 1 Bank CPJ 60 000 2023 1 Balance b/d 60 000
Mar Febr
2022 31 Bank CPJ 400 000 2023 28 Income tax GJ 900 000

Bank CPJ ?

960 000 960 000

 APPROPRIATION ACCOUNT
Febr Febr
2023 28 Income tax GJ 900 000 2023 28 Profit & GJ 3000 000
loss
Dividends Marc Retained
28 on GJ 1390 2022 1 income GJ 544 000
Ordinary 000
shares
Retained
28 income GJ 1254
000

3544 3544 000

000

Questions
1.3.1. Calculate the average issue price? (3)
1.3.2. Use the total repurchase price to calculate the price above the average
issue price. (3)
1.3.3. Calculate the net profit after tax for the current financial year. (3)
1.3.4. Calculate the amount payable or receivable to or from SARS. Indicate whether
the amount is receivable or payable. (4)
1.3.5. How much was the second provincial tax payment? (2)
1.3.6. Calculate the interim dividends paid to shareholders. (5)
[20]

1.4. JOLIVET LTD

You are provided with the information of JOLIVET LIMITED. The company is
registered with an authorized share capital of 2000 000 shares, 50% of the
shares has been issued. The financial year ended 28 February 2023.

REQUIRED:
1.4.1. The CEO of Jolivet LTD, Sphiwe Mzizi currently owns 40% of the issued
shares. How many shares does Sphiwe Mzizi have in this company? (3)
1.4.2. The board of directors decided to issue unissued shares in July 2022.
Calculate the minimum number of shares Sphiwe must buy to gain the control
of the company. (4)

TOTAL MARKS: 50