ASSIGNMENT QUESTION: $(30$ marks$)$

Case Study: Preparing a Statement of Financial Position

Background:

Sunnyvale Vineyards Ltd$.$ is a renowned wine$-$producing company located in the lush

vineyards of South Africa's Western Cape. Established in the $1980$s$,$ the company has

expanded its operations, encompassing a vast estate of vineyards, multiple wine

production facilities, a central distribution system, and an iconic tasting room for wine

enthusiasts. The company's offerings include a range of exquisite red, white, and ros$$

wines. Sunnyvale also produces limited batches of brandies and other spirits.

Assignment:

Using the provided final trial balance as per below, additional notes, and your

understanding of accounting principles, prepare the Statement of Financial Position

for Sunnyvale Vineyards Ltd$.$ as of $30$ June $2024.$

Final Trial Balance for Sunnyvale Vineyards Ltd$.$ as of $30$ June $2024$ after all

adjustments have already been made accordingly.

Account

Notes Debits

$($Rand$)$

Credit

$($Rand$)$

Accounts Receivable Note $10320000$

Biological Assets Note $6300000$

Borrowings $($Long$-$Term Debt$)$ Note $177500000$

Borrowings $($Short$-$Term Debt$)$ Note $21350000$

Buildings $2500000$

Cash and Cash Equivalents $320000$

Debt Securities Note $8100000$

Equity Investments Note $7120000$

Financial Assets $($Current$)$ Note $1190000$

Furniture and Fixtures Note $1100000$

Inventories Note $9620000$

Investment Property Note $2800000$

ANNEXURE J: SUMMATIVE ASSESSMENT $2$

$100$ HFAC$131-1-$Jan$-$Jun$2024-$SA$2-$LVN$-$V$3-20240110$

Issued Capital $($Share Capital$)$ Note $135000000$

Land $6000000$

Less Accumulated Depreciation Note $110000$

Licenses Note $570000$

Machinery and Equipment $600000$

Other Comprehensive Income Note $1640000$

Other Current Assets Note $1260000$

Other Current Liabilities Note $2340000$

Other Non$-$Current Liabilities Note $1950000$

Patents Note $3250000$

Prepayments Note $1050000$

Provisions $($Long$-$Term$)$ Note $18100000$

Provisions $($Short$-$Term$)$ Note $2260000$

Retained Earnings Note $141200000$

Revaluation Surplus Note $15400000$

Trade and Other Payables Note $20420000$

Trademarks Note $4120000$

Vehicles $350000$

Totals $1397000013970000$

Notes:

$1.$ Furniture and Fixtures: Acquired this financial year, the furniture and fixtures are

to be depreciated over a span of $10$ years using the straight$-$line method.

$2.$ Investment Property: This property is not being used for Sunnyvale's operational

activities but has been purchased with an intention to benefit from its capital

appreciation or future rental income.

$3.$ Patents: Acquired during the financial year, these patents are expected to provide

benefits for the next $15$ years. They are to be amortized using the straight$-$line

method.

$4.$ Trademarks: Trademarks for Sunnyvale have a remaining useful life of $10$ years

and are a representation of the brand's value and recognition in the market.

$5.$ Licenses: Licenses include rights to operate certain machinery in the wine$-$making

process and have a remaining life of $5$ years.

ANNEXURE J: SUMMATIVE ASSESSMENT $2$

$101$ HFAC$131-1-$Jan$-$Jun$2024-$SA$2-$LVN$-$V$3-20240110$

$6.$ Biological Assets: Represents grape$-$bearing vines and trees that are imperative

for wine production. These assets will bear fruit for the next $20$ years before

replanting might be necessary.

$7.$ Equity Investments $($Non$-$Current$)$: These represent long$-$term stakes in other

wine and spirit producing companies, with an intention to hold for more than a year.

$8.$ Debt Securities $($Non$-$Current$)$: Bonds purchased from other corporations with a

maturity date of over one year from the balance sheet date.

$9.$ Inventories: This includes bottled wines, brandies, and spirits, as well as raw

materials such as grapes awaiting processing.

$10.$Accounts Receivable & Prepayments: Amounts represent monies owed to

Sunnyvale by customers who purchased on credit. Prepayments include advance

payments for grape harvests and barrel aging services.

$11.$Financial Assets $($Current$)$: These represent short$-$term investments in money

market instruments, expected to be realized in cash within the next year.

$12.$Other Current Assets: Includes advances to employees, input tax credits, and

other sundry debtors.

$13.$Issued Capital $($Share Capital$)$: Represents the initial capital invested by

shareholders during the company's inception and any subsequent additions.

$14.$Retained Earnings: Cumulative net earnings of Sunnyvale which have been

retained in the business rather than distributed as dividends.

$15.$Revaluation Surplus: Arising from the revaluation of land and buildings which

were found to have market values higher than their book values.

$16.$Other Comprehensive Income: Represents unrealized gains and losses, such as

changes in the fair value of investments held.

$17.$Borrowings $($Long$-$Term Debt$)$: Loans taken from financial institutions for the

purchase of machinery, equipment, and property, with a maturity of over one year.

$18.$Provisions $($L