1. Background You have been requested to assist the accountant of Moments (Pty) Ltd (Moments) with...
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1. Background You have been requested to assist the accountant of Moments (Pty) Ltd ("Moments) with the preparation of the statement of cash flows for the year ended 30 June 2017. The accountant has provided you with some financial information for the year ended 30 June 2017. 2. Information DRAFT TRIAL BALANCE AS AT 30 JUNE 2017 2017 Debit/(Credit) 12% Preference shares Ordinary share capital Note R 2016 R 1,5 -5 000 1,2 -980 000 -105 000 -550 000 Retained earnings Long term loan -3 710 930 -3 066 730 1 ? Accounts payable-trade -361 420 -683 150 Shareholders for dividends 5 -150 000 -300 000 Normal tax payable -32 650 -57 350 Plant: Carrying amount 8 784 650 850 000 Machinery and Equipment: Carrying amount 6,7,8 498 720 694 830 Land: Cost 4 2 378 000 1 850 000 Investments 7 370 000 320 000 Goodwill 8,10 30 800 35 000 Inventory 360 000 275 000 Accounts receivable-trade 278 500 368 950 Bank 595 130 368 450 DRAFT STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED Revenue-Sale of goods Cost of sales Gross profit 30 JUNE 2017 Other income Dividend income - Profit on sale of machinery Fair value adjustment (Investment) Administration expenses Other expenses Finance costs Profit before tax Taxation Profit for the year Other comprehensive income Total comprehensive income for the year 8 Note 2017 R 19 265 430 -13 864 590 5 400 840 20 000 35 000 50 000 ? -750 000 ? 1 775 040 -746 840 1 028 200 1 028 200 Additional information: 1. On 1 July 2016 Moments redeemed 50 000 of its 52 500 issued preference shares at R2 each. The preference shares are correctly classified as equity. The redemption was financed by the issue of 18 000 ordinary shares at a market value of R2.80 per share. The shortfall was financed by means of a long-term loan with an interest rate of 12.5%. The first instalment on the long-term loan is due on 1 July 2017. 2. On 1 January 2017, a capitalisation issue took place at the market value of R2.60 per share. One share was issued for every two shares held. Moments had 200 000 ordinary shares in issue at 30 June 2016. 3. A further share issue for cash took place on 1 April 2017 at R2.50 per share. No land was disposed of during the current financial year 1. Background You have been requested to assist the accountant of Moments (Pty) Ltd ("Moments) with the preparation of the statement of cash flows for the year ended 30 June 2017. The accountant has provided you with some financial information for the year ended 30 June 2017. 2. Information DRAFT TRIAL BALANCE AS AT 30 JUNE 2017 2017 Debit/(Credit) 12% Preference shares Ordinary share capital Note R 2016 R 1,5 -5 000 1,2 -980 000 -105 000 -550 000 Retained earnings Long term loan -3 710 930 -3 066 730 1 ? Accounts payable-trade -361 420 -683 150 Shareholders for dividends 5 -150 000 -300 000 Normal tax payable -32 650 -57 350 Plant: Carrying amount 8 784 650 850 000 Machinery and Equipment: Carrying amount 6,7,8 498 720 694 830 Land: Cost 4 2 378 000 1 850 000 Investments 7 370 000 320 000 Goodwill 8,10 30 800 35 000 Inventory 360 000 275 000 Accounts receivable-trade 278 500 368 950 Bank 595 130 368 450 DRAFT STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED Revenue-Sale of goods Cost of sales Gross profit 30 JUNE 2017 Other income Dividend income - Profit on sale of machinery Fair value adjustment (Investment) Administration expenses Other expenses Finance costs Profit before tax Taxation Profit for the year Other comprehensive income Total comprehensive income for the year 8 Note 2017 R 19 265 430 -13 864 590 5 400 840 20 000 35 000 50 000 ? -750 000 ? 1 775 040 -746 840 1 028 200 1 028 200 Additional information: 1. On 1 July 2016 Moments redeemed 50 000 of its 52 500 issued preference shares at R2 each. The preference shares are correctly classified as equity. The redemption was financed by the issue of 18 000 ordinary shares at a market value of R2.80 per share. The shortfall was financed by means of a long-term loan with an interest rate of 12.5%. The first instalment on the long-term loan is due on 1 July 2017. 2. On 1 January 2017, a capitalisation issue took place at the market value of R2.60 per share. One share was issued for every two shares held. Moments had 200 000 ordinary shares in issue at 30 June 2016. 3. A further share issue for cash took place on 1 April 2017 at R2.50 per share. No land was disposed of during the current financial year
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