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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 …show more content…

(1.5) Classify with reasons, item 5 above as an adjusting or a non-adjusting event for the year ended 30 June 20X2, in accordance with International Financial Reporting Standards (IFRS). (1.5)

d)

e)

211 Exam 2012 Q.doc

3 QUESTION 2 (20 marks, 30 minutes)

The following information relates to BRICKBRAC LIMITED for the year ended 31 December 20X8. Brickbrac Limited entered into a finance lease agreement with Tower Limited on 1 July 20X7 to lease a forklift for their building operations. The following information relates to the agreement: Cost of forklift Term of lease Instalments payable half-yearly in arrears Interest rate implicit in the lease agreement R300 000 3 years R70 913 22% per annum

The following amortisation table is applicable to the above-mentioned finance lease agreement: Date 1 July 20X7 31 Dec. 20X7 30 June 20X8 31 Dec. 20X8 30 June 20X9 31 Dec. 20X9 30 June 20X10 Additional information: 1. 2. 3. 4. 5. The forklift was available for use as intended by management on 1 July 20X7. Depreciation on forklifts is provided at 20% per annum on the diminishing balance method. All risks and rewards attached to the forklift were transferred by Tower Limited to Brickbrac Limited and there were no restrictions in the lease agreement. Brickbrac Limited made a profit before tax of R1 900 600 for the year ended 31 December 20X8 after taking into account the above lease agreement. The following items amongst others, have been taken into account

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