ACN301T/202/2/2008 ACN311V/202/2/2008

SCHOOL OF ACCOUNTING SCIENCES DEPARTMENT OF FINANCIAL ACCOUNTING GENERAL FINANCIAL REPORTING TUTORIAL LETTER 202/2008 FOR ACN301T/ACN311V Dear Student Enclosed please find the following: ANNEXURE A: SUGGESTED SOLUTION TO ASSIGNMENT 01/2008 ANNEXURE B: OCTOBER 2008 EXAMINATION : PREPARATION AND APPROACH It is in your own interest to work through the suggested solution in conjunction with the assignment and your own answer.

PLEASE NOTE SA NORMAL TAX RATE FOR COMPANIES Please use the SA Normal tax rate given in the question. For exam purposes a tax rate of 29% will be used.

All the tutorial letters are available on the internet. Tutorial letters that include the solutions to assignment questions will be available on the internet on the due date of the assignment. Documents on the internet can be accessed via the UNISA website, after registering as a MyUnisa user (previously SOL user). Documents are in Acrobat Reader 6 format. Access can be obtained as follows: 1. 2. 3. 4. 5. 6.

Enter your user id and password. Select the relevant course code (eg. ACN301T). Select the option “material”. Click on “official study material”. A table with all the study material will appear. Select the relevant tutorial letter and click on it to open the file. (Tutorial letter will appear as follows: 202_2008_2_E)

2 AVAILABILITY OF LECTURERS: •

Telephonically

We are available for telephone enquiries during office hours on weekdays. During examinations, lecturers are telephonically available between 8h00 and 16h00 on weekdays, 3 days before the examination date. •

Personal visits

To avoid any disappointment, make an appointment with a lecturer as they are not always readily available. •

E-mail

You can also communicate with the lecturers via e-mail. Please note that feedback will not necessarily be given via e-mail. Therefore, it is important to give your student number, telephone number, fax number, e-mail address and postal address. Yours faithfully Y Mohamed (Mr) A Oosthuizen (Mrs)(on leave) S Swart (Prof)

e-mail address [email protected] [email protected] [email protected]

LECTURERS: ACCOUNTING III (ACN301T/ACN311V)

Telephone numbers 429-4414 429-8971 429-4088

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ACN301T/ACN311V/202

ANNEXURE A SUGGESTED SOLUTION TO ASSIGNMENT 01/2008 1.

The correct answer is (2). Refer to par. 24 of the Framework.

2.

The correct answer is (2). Refer to par. 49 (b) of the Framework which describes the definition of a liability.

3.

The correct answer is (4). Refer to par. 51 of IAS 1 (AC 101) – Presentation of financial statements.

4.

The correct answer is (3). Refer to par. 58 of IAS 1 (AC 101) – Presentation of financial statements.

5.

The correct answer is (4). Statements (1), (2) and (3) are correct. Refer to par. 15 and par. 24 of IAS 12(AC 102) – Income taxes.

6.

The correct answer is (4). Cost price 1 July 20.6 Depreciation – 31 December 20.6 (400 000 x 20% x 6/12) Carrying amount – 31 December 20.6

7.

R 400 000 (40 000) 360 000

Depreciation - 31 December 20.7 (360 000 x 20%)

72 000

Wear and tear - 31 December 20.7 (400 000 x 20%)

80 000

The correct answer is (3). The exempt differences for the year ended 31 December 20.7 are as follows: Donations paid Fines for environmental pollution Depreciation on administration buildings (R500 000 x 2%) Dividends received Total exempt differences

8.

R 20 000 80 000 10 000 (30 000) 80 000

The correct answer is (2). The increase in the allowance for credit losses (provision for doubtful debts) to be added back for tax purposes is R8 000 (R30 000 – R22 000).

4 9.

The correct answer is (2). The deferred tax balance at 31 December 20.7 is as follows: Carrying amount R 480 000 288 000¹

Administration building Vehicles Allowance for credit losses (Provisions for doubtful debts) 30 000 Rent received in advance 24 000 Deferred tax asset balance at 31 December 20.7

Tax base R 500 000 280 000²

Temporary difference R 20 000 8 000

7 5003 -

22 500 24 000

Deferred tax asset/ (liability) @ 29% R Exempt (2 320) 6 525 6 960 11 165

¹ 400 000 – 40 000 = 360 000 – (360 000 x 20%) = 288 000 ² 400 000 – (400 000 x 20% x 6/12) – (400 000 x 20%) = 280 000 3 30 000 x 25% = 7 500 10.

The correct answer is (1). Effect of the rate change is R4 950 x 1/30 = R165 debited to the statement of comprehensive income (income statement).

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ACN301T/ACN311V/202

ANNEXURE B OCTOBER 2008 EXAMINATION: PREPARATION AND APPROACH. The following matters regarding the October 2008 examination paper deserve your attention: 1. RELATIVE IMPORTANCE OF CERTAIN TOPICS IN THE STUDY MATERIAL There are no topics in the study material that are more important than others and no discussion will be conducted in this regard. None of the topics in the syllabus are excluded for examination purposes. You will be examined on all study material as per the study guides, prescribed books and tutorial letters. It is not sufficient to only work through your assignments because all the principles are not tested in there. Please ensure that you have received all the following study material: 1. 2. 3. 4. 5.

Tutorial letter 101/2008 Tutorial letter 102/2008 Tutorial letter 201/2008 Tutorial letter 202/2008 Study guide for ACN301T/ACN311V

If you have not received all the abovementioned study material, please contact DESPATCH at telephone number (012) 429-4104. 2. CHOICE OF CORRECT PAPER: ACN301T/ACN311V It is your responsibility to ensure that you receive the correct paper in the examination. If you are handed the wrong paper, you must immediately request the invigilator to hand you the correct paper. 3. EXAMINATION TECHNIQUE During the marking of examination papers in the past, the following general technique problems were identified: 3.1

Each question was not started on a separate page. The examination instructions are very specific in this regard, and should be adhered to.

3.2

Illegible handwriting made marking difficult. As a result marks may have been lost.

3.3

Students obviously deviated from the suggested timetable. If you are unable to complete a question within the suggested time, stop, and carry on with a next question. It has been proved that you will earn more marks on starting a next question, than continuing with the question of which the time has expired.

3.4

Many students did not answer what the question required. First read through the “required” section of each question before you read through the contents of the question. When you start answering the question, check that you are answering what is required and not what you think is required. Structuring your answer into subsections with appropriate headings helps a great deal in not making this mistake.

3.5

Subsections of answers were not always clearly identified. Structure the layout of your answer to group all subsections of one question together. Avoid including a subsection of a question at the end of your paper, and if you have no choice, refer to the subsection in the main body of your answer.

6 3.6

Many marks were lost due to problems involving calculations that were not shown. Bear in mind that sufficient calculations must be included in the presentation of your answer to enable us to follow your logic and award marks accordingly. If you made a calculation error and have not shown your calculations, we have nothing to work on to award marks for the principle you have applied. It will therefore be worthwhile to spend a few minutes to set out what you did. The calculations must of course be included in your answer and not at the back of your examination script or with other unrelated questions. They must obviously be cross referenced to your question.

4. FORMAT OF EXAMINATION PAPER The examination for October 2008 consists of 3 questions and the duration of the paper is 2 hours. 5. SUPPLEMENTARY EXAMINATIONS AND REMARKS Please take note of the following important information regarding supplementary examinations and remarks: •

Supplementary examinations will be conducted in May 2009 for students who failed the October 2008 examination paper.

•

To qualify for an additional examination opportunity you must obtain a final mark of 45% - 49% for the module. The final mark consists of the 10% year mark obtained plus 90% of the examination mark.

•

Only the examination mark will be taken into account in the supplementary examination (the year mark will not be taken into account).

•

Only students who obtain a final mark of 35% - 49% or 68% - 74% in a module may apply for the remark of such an examination answer book. The mark awarded after remarking will be the final result, even if it is lower than the original mark.

•

A student will not be entitled to a supplementary examination (if applicable) on grounds of a remark result.

This communication replaces any information regarding the matters above provided in Tutorial Letter 101. For more information refer to the general rules for study and examinations in Part 1 of the Unisa Calendar. 6. GROUP DISCUSSION CLASSES NO group discussion classes for this module will be presented this year. 7. PERSEVERE We would like to encourage you to tackle your studies with enthusiasm. Remember, success can only be achieved by effort and perseverance. Every year we find that many students do not turn up at the examination centre. You must never inflict this disservice on yourself. Remember that if you write, you have a chance; if you don’t, you have no chance. We wish you a pleasant study period. © Unisa 2008 ACN301T_2008_202_2_E_pdf