FAC3B 2020 group assessment PDF

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Summary

groups assessment , with journal entries , summative assessment for the year 2021 Assessment opportunity...

Description

FIN ACC 3B: FAC33B3/FAC3BB3 Second assessment opportunity 2020

___________________________________________________________________

FACULTY/COLLEGE

College of Business and Economics

SCHOOL

School of Accounting

DEPARTMENT

Department of Commercial Accounting

CAMPUS(ES)

SWC

MODULE NAME

Financial Accounting 3B

MODULE CODE

FAC33B3/FAC3BB3

SEMESTER

Second

ASSESSMENT OPPORTUNITY,

Second Assessment Opportunity

MONTH AND YEAR

October 2020

ASSESSMENT DATE ASSESSOR(S)

14 October 2020 Mr L Khumalo Mrs L Kharivhe Ms L Mbhalati

MODERATOR)(Internal) DURATION

Ms B Madikizela 2 hours

SESSION

TOTAL MARKS

50

NUMBER OF PAGES OF QUESTION PAPER (Including cover page)

3

INSTRUCTIONS:  This paper consists of 6 pages (including the cover page).  Answer all questions. Show all calculations and workings clearly.  Start each question on a new page in your answer book.  Silent, non-programmable calculators may be used.  Where applicable, round all calculations to the closest Rand.

Question

Topic

Marks

Time

1 2 3

Groups at acquisition Groups post acquisition – Journals and presentation Groups post acquisition – Presentation(SOCE)

10 20

24 minutes 48 minutes

20

48 minutes

50

120 minutes

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FIN ACC 3B: FAC33B3/FAC3BB3 Second assessment opportunity 2020

___________________________________________________________________ Question 1 (Groups at acquisition)

(10 marks)

Learning outcomes  to display the ability to calculate the cost of a business combination.  to display the ability to account for identifiable assets that might be undervalued at acquisition date.  to display the ability to prepare at acquisition pro-forma consolidation journal entries.

On 1 April 2019, Nana (Pty) Ltd “Nana” purchased a ???% shareholding in Zizi (Pty) Ltd “Zizi”. Nana considered all of the assets and liabilities of Zizi to be fairly valued, with the exception of land. The land’s value in the books of Zizi is R500 000, however its fair value on acquisition date is R560 000. Zizi did not change the value of the land in its own books. The equity of Zizi at acquisition date: Share capital Retained Income Revaluation reserve

Question 2

R600 000 R400 000 R50 000

(Pro forma journal entries)

(20 marks)

Learning outcomes  to display the ability to prepare pro-forma journal entries when preparing the consolidated financial statements for a group, given a scenario  to display the ability to apportion the post-acquisition profits of a subsidiary  to display the ability to account for intra-group sales of depreciable assets

The scenario for this question is included in the question. Please download the scenario which is included in the question as PDF document.

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FIN ACC 3B: FAC33B3/FAC3BB3 Second assessment opportunity 2020

___________________________________________________________________ Question 3 (After acquisition statement of changes in equity)

(20 Marks)

Learning outcomes  to display the ability to calculate amortisation of goodwill and make necessary adjustments on Retained earnings  to display the ability to calculate fair value adjustment on investment and make necessary adjustments on Retained earnings  to display the ability to prepare the current year section of the AOE  to display the ability to prepare the Retained earnings column of the Statement of changes in Equity  to display the ability to prepare the NCI column of the Statement of changes in Equity

On 1 January 2019, Emma (Pty) Ltd (‘Emma’) acquired 120 000 shares in Lee (Pty) Ltd (‘Lee’), and the consideration of R1 000 000 cash was paid. On this date Lee (Pty) Ltd had 200 000 ordinary shares in issue, a share capital of R600 000 and retained earnings of R350 000. The assets and liabilities of Lee were considered to be fairly valued on 01 January 2019. For the financial reporting period ending 31 December 2019, Emma made a profit after tax of R800 000 and declared ordinary dividends of R300 000 and Lee made profit after tax of R120 000 and declared an ordinary dividend of R80 000.The investment in Lee is measured at fair value through profit or loss, in the books of Emma Goodwill, if any, is amortised on a straight line basis over a period of 10 years.

The respective condensed Statements of Financial Position of the two companies as at 31 December 2019 are as follows: Emma R

Lee R

Assets Property plant and Equipment Investment in subsidiary Investment property Trade receivables Inventories Bank

2 500 000 1 030 000 500 000 900 000 800 000 200 000

700 000 400 000 350 000 480 000

Equities and liabilities Share capital Retained earnings Trade payables Long term loan

1 200 000 2 000 000 1 030 000 2 000 000

600 000 390 000 750 000 190 000

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