Law Related Topics Essay

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Faculty of Economic and Management Sciences Department of Accounting Financial Accounting FRK 211 Exam session: Date: Duration: Total marks: Date of perusal: Internal examiners: 1st semester June 2012 8 June 2012 2 hours 80 marks 21 June 2012 Prof J E Myburgh Ms J S Goodey Ms N Pududu

External examiners: Ms HC Verster Mr JJ Bezuidenhout Ms M Pollock Instructions: 1. You should answer all the questions. 2. The paper consists of eight (8) pages. 3. You may keep the question paper.
Question 1. 2. 3. 4. 5. Total: Topic Revenue and Events after reporting period Income taxes and Leases Property, plant and equipment, Impairments and Investment Property Intangible assets Changes in accounting estimates and errors Marks 19
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These goods are sold at cost plus 40%. On 30 June 20X2, 20% of the goods were still on hand at the trader. On 12 December 20X0 IT Solutions Limited bought 8 000 ordinary shares in Southfolk Limited as an investment. On 15 August 20X2 Southfolk Limited declared a dividend of R1.20 per ordinary share which was paid to shareholders on 31 August 20X2. On 20 August 20X2 lightning caused a fire in the storeroom and inventories of R86 000 were destroyed and damage of R160 000 was also caused to the building. Due to IT Solutions Limited being under insured, only 50% of the damage was paid out by the insurance company. The costs of repairs not covered by the insurance money will be paid from available cash.





REQUIRED: a) Discuss, with reference to IAS 18, Revenue, when income from services rendered can be recognised . (3) Journalise the transactions in item 1 above (including year-end adjustments) in the books of IT Solutions Limited for the year ended 30 June 20X2, in accordance with International Financial Reporting Standards (IFRS). (10.5)


211 Exam 2012 Q.doc

2 c) Calculate for each of items 2, 3 and 4 above, the amount that is included in the “Revenue” line item mentioned above, for the year ended 30 June 20X2, in accordance with International Financial Reporting Standards (IFRS). (2.5) Calculate the amount from item 3 above that will be included in the “Inventories” line item in the statement of financial position

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