Please help with the assignment is due in an hour

(2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project:... S Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... QUESTION 1 15 MARKS You may ignore VAT and income tax for the purposes of this question. House Limited imports medical equipment, and sell the equipment to private medical practices in South Africa. House Limited has a 30 June year end. House Limited's main supplier - Wilson Medical Supplies - is based in Singapore. Singapore uses the Singapore Dollar (SGD) as their main currency. On 1 February 2020, an order for 15 500 scalpel sets with a cost SGD552 a set was placed with Wilson Medical Supplies. The supplier experienced a delay in shipping the order, due to supply issues, and the goods were only dispatched for delivery on 15 May 2020, and arrived at House Limited's warehouse on 1 June 2020. The goods were shipped FOB. The creditor was paid on 31 August 2020. At the 2020 year-end, 45% of these units were sold for cash. At year end, the estimated selling price of these scalpel sets had decreased to SGD535 with related selling costs of SGD15. House Limited entered into a forward exchange contract (FEC) with Cuddy Bank on 1 February 2020 to cover their risk exposure on the order and balance owing to the foreign creditor. This FEC matured on 30 April 2020 (the date that they had originally expected to pay the supplier). As the order was still outstanding, a second FEC was negotiated end entered into on 15 May 2020 that matured on 31 August 2020. Additional Information: WhatsApp Image....jpeg WhatsApp Image.jpeg A WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:10 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTQ2_FI_ACTIX + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 3 Win Extra Contrast | Joonie Arduino-based Coll... Just Another Day... 200+ Arduino Proje... DIY DIY - Wireless Rou... Ce OpenWrt Project... SGD535 with related selling costs of SGD15. House Limited entered into a forward exchange contract (FEC) with Cuddy Bank on 1 February 2020 to cover their risk exposure on the order and balance owing to the foreign creditor. This FEC matured on 30 April 2020 (the date that they had originally expected to pay the supplier). As the order was still outstanding, a second FEC was negotiated end entered into on 15 May 2020 that matured on 31 August 2020. Additional Information: Inventories are measured in accordance with the perpetual inventory system. House Limited aims to achieve a gross profit margin of 30% on all inventory sales. You are provided with the following ZAR:SGD exchange rates: SGD:ZAR Spot rate FEC rate for FEC rate for contract maturing on 30/4/2020 contract maturing on 31/8/2020 R1 : SGDO.0877 01/02/2020 R1 : SGDO.0902 R1 : SGD0.0876 30/04/2020 R1 : SGD0.0777 n/a R1 : SGDO.0757 R1 : SGDO.0769 15/05/2020 R1 : SGDO.0790 n/a n/a 01/06/2020 30/06/2020 R1 : SGDO.0803 R1 : SGDO.0809 R1 : SGDO.0783 R1 : SGDO.0785 n/a 31/08/2020 R1 : SGDO.0819 n/a n/a WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions Chec x WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + C File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps 9 No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project:... 3 Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... ECTEDpur 9 OCTOBER 2020 QUESTION 2 35 MARKS You may ignore VAT and income tax for the purposes of this question. African-Experience Limited is a Mpumalanga based broad-based black economic empowerment (BBBEE) company listed on the JSE Limited with operations in the South African tourism and property development industries. African-Experience Limited has a 30 June financial year-end. Kwaggafontein Resort On 1 July 2010, African-Experience Limited entered into a land use agreement with the Department of Rural Development and Land Reform for a lease term of 50 years. The lease is renewable. However, at inception date it was unlikely that African-Experience Limited would renew the lease. The conditions of the lease include the following: Commencement date: Deposit: Payments: 1 July 2010 R600 000 (upfront, non-refundable) R1 000 000 (bi-annually) The following clause is included in the land use agreement: "African-Experience Limited may make any alterations, improvement or additions to the land without the prior written consent of the Nenartment of Rural Develonment and I and Reform WhatsApp Image.jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... WRP OpenWrt Project.... S Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... Commencement date: Deposit: Payments: 1 July 2010 R600 000 (upfront, non-refundable) R1 000 000 (bi-annually) The following clause is included in the land use agreement: "African-Experience Limited may make any alterations, improvement or additions to the land without the prior written consent of the Department of Rural Development and Land Reform. Prior to the termination of this agreement African-Experience shall, at its cost, reinstate the premises to the condition that it was received in i.e. without any improvements. African-Experience Limited, at its cost, shall dismantle all buildings, structures and/or alterations effected on the land and make good any damage caused thereby its removal" African-Experience Limited's intention for the land is to build a holiday resort. The architectural plans for the resorts property structure ("building") received final council approval on 1 April 2011 To fund this construction project, African-Experience Limited applied for a loan with Beep- Bank. Due to African-Experience Limited's weak credit rating, Beep-Bank was not able to finance the entire project. On 1 July 2011, African-Experience Limited obtained approval for a loan advance of R4 800 000 000 (R4.8 billion) at an interest rate of 13.5% per annum. Interest on the loan has to be repaid annually, while the capital amount is repayable at the end of the loan term. WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... We OpenWrt Project... Win Extra Contrast Joonie Arduino-based Coll... Just Another Day... 200+ Arduino Proje... DIY DIY - Wireless Rou... COURSE: ACCOUNTING 300 / S3BCTQ2 9 OCTOBER 2020 QUESTION 1 continued As a result of the partial funding received from Beep-Bank, a board meeting was held where it was resolved that African-Experience Limited would issue 100,000, 8.5% convertible debentures to supplement the loan obtained from Beep-Bank. The debentures were issued at face value (representing fair value on the issue date) of R10,000 on 1 July 2011. The debentures mature on 30 June 2021, and can either be converted to 500 ordinary shares per debenture, or be redeemed at a premium of 10% on the face value, at the option of African-Experience Limited. Returns are paid to debenture holders annually. On the issue date, a market related rate for similar debentures with no conversion option was 12% per annum. On 1 July 2011, African-Experience Limited commenced with constructing the building. This construction project was anticipated to take a period of 3 years to complete i.e. the period beginning 1 July 2011 and ending 30 June 2014. The building is a qualifying asset as defined in IAS 23 Borrowing Costs. The following costs were incurred by African-Experience Limited to construct the building: Date Type of Cost 1 July 2011 1 July 2011 - 30 June 2014 Building Material Labour Amount R 4 500 000 000 1 000 000 000 WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project.... S Win Extra * Contrast | Joonie Arduino-based Coll... Just Another Day... option was 12% per annum. On 1 July 2011, African-Experience Limited commenced with constructing the building. This construction project was anticipated to take a period of 3 years to complete i.e. the period beginning 1 July 2011 and ending 30 June 2014. The building is a qualifying asset as defined in IAS 23 Borrowing Costs. The following costs were incurred by African-Experience Limited to construct the building: Date Type of Cost Building Material 1 July 2011 1 July 2011 - 30 June 2014 Amount R 4 500 000 000 1 000 000 000 Labour TOTAL 5 500 000 000 African-Experience Limited paid the above costs upfront to the construction company. The costs to construct were first paid out of the loan advance received from Beep-Bank and then from the proceeds of the debenture issue. The building was ready and available for use on 1 July 2014. On 1 July 2011, African-Experience engaged Mr. Ndlebe, a professional valuer, to determine how much it would cost African-Experience to restore the land back to its original condition as per the agreement with the Department of Rural Development and Land Reform. Based on the approved architectural plans, Mr. Ndlebe determined that the following costs would be incurred to fulfil the requirements of the agreement when the building was complete: WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image.jpeg A WhatsApp Image....jpeg A WhatsApp Image.jpeg Show all Type here to search (ENG 09:12 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... DIY DIY - Wireless Rou... 3 Win Extra Arduino-based Coll... Just Another Day... 200+ Arduino Proje... Date Wet OpenWrt Project... Type of Cost Contrast Joonie Amount R 4 500 000 000 Building Material 1 July 2011 1 July 2011 - 30 June 2014 Labour 1 000 000 000 TOTAL 5 500 000 000 African-Experience Limited paid the above costs upfront to the construction company. The costs to construct were first paid out of the loan advance received from Beep-Bank and then from the proceeds of the debenture issue. The building was ready and available for use on 1 July 2014. On 1 July 2011, African-Experience engaged Mr. Ndlebe, a professional valuer, to determine how much it would cost African-Experience to restore the land back to its original condition as per the agreement with the Department of Rural Development and Land Reform. Based on the approved architectural plans, Mr. Ndlebe determined that the following costs would be incurred to fulfil the requirements of the agreement when the building was complete: Cost of demolishing the buildings Rubble removal Rehabilitation of the land R 1 200 000 000 25 000 000 300 000 000 Question 1 continues on the next page... 6 WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:12 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... Wet OpenWrt Project:... 3 Win Extra Contrast Joonie Arduino-based Coll... Just Another Day... 9 OCTOBER 2020 QUESTION 1 continued During the financial year ended 30 June 2020, African-Experience Limited has been significantly impacted by the Covid-19 pandemic. There has been a substantial decline in the demand for leisure travel due to the national lockdown regulations. The holiday resort is the smallest identifiable group of assets that generate cash flows independently that African-Experience Limited owns, and includes all land and building and associated liabilities. The debentures do not form part of this group of assets. Mr. Ndlebe has prepared the following calculation at 30 June 2020 that reflects the expected future cash flows of the holiday resort: (You do not need to check the accuracy of this calculation. You may assume it is accurate, and includes the lease liability and the decommissioning provision) 2021 2022 541 891 320 552 729 140 -352 229 358 359 273 941 2023 2024 563 783 720 575 059 400 -366 459 418 -373 788 610 Cash inflow Cash outflows Terminal Value Net Cash flow before tax PV @ 10.5% NPV/VIU 2025 586 560 600 -381 264 390 4927 109 040 5 132 405 250 4644 710 633 189 661 962 171 639 785 5 352 142 537 193 455 199 175 072 578 197 324 302 178 574 029 201 270 790 182 145 511 Mr. Ndlebe also determined that African-Experience Limited could sell the resort for R5 339 565 896 at 30 June 2020. This value is calculated after taking into account the fair WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg Show all Type here to search 4x ENG 09:13 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions Che X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : * Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... We OpenWrt Project... 3 Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... 7 / 11 ZZZS TO 27941 S00459410 7700 10 2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Castrolows Terminal Value Net Cash flow before tax PV @ 10.5% NPV/VIU 189 661 962 171 639 785 5352 142 537 193 455 199 175 072 578 197 324 302 178 574 029 201 270 790 182 145 511 301 2040 4927 109 040 5 132 405 250 4 644 710 633 Mr. Ndlebe also determined that African-Experience Limited could sell the resort for R5 339 565 896 at 30 June 2020. This value is calculated after taking into account the fair value of the costs to restore the land (to its original condition as per the agreement with the Department of Rural Development and Land Reform) that would be incurred by the prospective buyer, as well as the cost to close the sale. Question 1 continues on the next page... + WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search la 4* ENG 09:13 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions Che X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : * Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... We OpenWrt Project... 3 Win Extra * Contrast | Joonie Arduino-based Coll... Just Another Day... 2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf 8 / 11 QUESTION 1 continued Additional Information: The loan from Beep-Bank was repaid in full by African-Experience Limited on 30 June 2017 Land is accounted for using the cost model as prescribed by IFRS 16 Leases. The buildings and equipment are accounted for using the cost model as per IAS 16 Property, Plant and Equipment. The resort is depreciated on a straight-line basis over the period that African-Experience Limited may use the land, to a residual value of nil. You may assume a market related interest rate for African-Experience Limited of 10.5% (pre-tax), for all financial years. ++ You may assume an incremental borrowing rate for African-Experience Limited of 13.5% (pre-tax), for all financial years. Ignore taxation and VAT for the purposes of this question. + WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search H la 4* ENG 09:14 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project:... S Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... QUESTION 1 15 MARKS You may ignore VAT and income tax for the purposes of this question. House Limited imports medical equipment, and sell the equipment to private medical practices in South Africa. House Limited has a 30 June year end. House Limited's main supplier - Wilson Medical Supplies - is based in Singapore. Singapore uses the Singapore Dollar (SGD) as their main currency. On 1 February 2020, an order for 15 500 scalpel sets with a cost SGD552 a set was placed with Wilson Medical Supplies. The supplier experienced a delay in shipping the order, due to supply issues, and the goods were only dispatched for delivery on 15 May 2020, and arrived at House Limited's warehouse on 1 June 2020. The goods were shipped FOB. The creditor was paid on 31 August 2020. At the 2020 year-end, 45% of these units were sold for cash. At year end, the estimated selling price of these scalpel sets had decreased to SGD535 with related selling costs of SGD15. House Limited entered into a forward exchange contract (FEC) with Cuddy Bank on 1 February 2020 to cover their risk exposure on the order and balance owing to the foreign creditor. This FEC matured on 30 April 2020 (the date that they had originally expected to pay the supplier). As the order was still outstanding, a second FEC was negotiated end entered into on 15 May 2020 that matured on 31 August 2020. Additional Information: WhatsApp Image....jpeg WhatsApp Image.jpeg A WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:10 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTQ2_FI_ACTIX + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 3 Win Extra Contrast | Joonie Arduino-based Coll... Just Another Day... 200+ Arduino Proje... DIY DIY - Wireless Rou... Ce OpenWrt Project... SGD535 with related selling costs of SGD15. House Limited entered into a forward exchange contract (FEC) with Cuddy Bank on 1 February 2020 to cover their risk exposure on the order and balance owing to the foreign creditor. This FEC matured on 30 April 2020 (the date that they had originally expected to pay the supplier). As the order was still outstanding, a second FEC was negotiated end entered into on 15 May 2020 that matured on 31 August 2020. Additional Information: Inventories are measured in accordance with the perpetual inventory system. House Limited aims to achieve a gross profit margin of 30% on all inventory sales. You are provided with the following ZAR:SGD exchange rates: SGD:ZAR Spot rate FEC rate for FEC rate for contract maturing on 30/4/2020 contract maturing on 31/8/2020 R1 : SGDO.0877 01/02/2020 R1 : SGDO.0902 R1 : SGD0.0876 30/04/2020 R1 : SGD0.0777 n/a R1 : SGDO.0757 R1 : SGDO.0769 15/05/2020 R1 : SGDO.0790 n/a n/a 01/06/2020 30/06/2020 R1 : SGDO.0803 R1 : SGDO.0809 R1 : SGDO.0783 R1 : SGDO.0785 n/a 31/08/2020 R1 : SGDO.0819 n/a n/a WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions Chec x WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + C File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps 9 No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project:... 3 Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... ECTEDpur 9 OCTOBER 2020 QUESTION 2 35 MARKS You may ignore VAT and income tax for the purposes of this question. African-Experience Limited is a Mpumalanga based broad-based black economic empowerment (BBBEE) company listed on the JSE Limited with operations in the South African tourism and property development industries. African-Experience Limited has a 30 June financial year-end. Kwaggafontein Resort On 1 July 2010, African-Experience Limited entered into a land use agreement with the Department of Rural Development and Land Reform for a lease term of 50 years. The lease is renewable. However, at inception date it was unlikely that African-Experience Limited would renew the lease. The conditions of the lease include the following: Commencement date: Deposit: Payments: 1 July 2010 R600 000 (upfront, non-refundable) R1 000 000 (bi-annually) The following clause is included in the land use agreement: "African-Experience Limited may make any alterations, improvement or additions to the land without the prior written consent of the Nenartment of Rural Develonment and I and Reform WhatsApp Image.jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... WRP OpenWrt Project.... S Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... Commencement date: Deposit: Payments: 1 July 2010 R600 000 (upfront, non-refundable) R1 000 000 (bi-annually) The following clause is included in the land use agreement: "African-Experience Limited may make any alterations, improvement or additions to the land without the prior written consent of the Department of Rural Development and Land Reform. Prior to the termination of this agreement African-Experience shall, at its cost, reinstate the premises to the condition that it was received in i.e. without any improvements. African-Experience Limited, at its cost, shall dismantle all buildings, structures and/or alterations effected on the land and make good any damage caused thereby its removal" African-Experience Limited's intention for the land is to build a holiday resort. The architectural plans for the resorts property structure ("building") received final council approval on 1 April 2011 To fund this construction project, African-Experience Limited applied for a loan with Beep- Bank. Due to African-Experience Limited's weak credit rating, Beep-Bank was not able to finance the entire project. On 1 July 2011, African-Experience Limited obtained approval for a loan advance of R4 800 000 000 (R4.8 billion) at an interest rate of 13.5% per annum. Interest on the loan has to be repaid annually, while the capital amount is repayable at the end of the loan term. WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... We OpenWrt Project... Win Extra Contrast Joonie Arduino-based Coll... Just Another Day... 200+ Arduino Proje... DIY DIY - Wireless Rou... COURSE: ACCOUNTING 300 / S3BCTQ2 9 OCTOBER 2020 QUESTION 1 continued As a result of the partial funding received from Beep-Bank, a board meeting was held where it was resolved that African-Experience Limited would issue 100,000, 8.5% convertible debentures to supplement the loan obtained from Beep-Bank. The debentures were issued at face value (representing fair value on the issue date) of R10,000 on 1 July 2011. The debentures mature on 30 June 2021, and can either be converted to 500 ordinary shares per debenture, or be redeemed at a premium of 10% on the face value, at the option of African-Experience Limited. Returns are paid to debenture holders annually. On the issue date, a market related rate for similar debentures with no conversion option was 12% per annum. On 1 July 2011, African-Experience Limited commenced with constructing the building. This construction project was anticipated to take a period of 3 years to complete i.e. the period beginning 1 July 2011 and ending 30 June 2014. The building is a qualifying asset as defined in IAS 23 Borrowing Costs. The following costs were incurred by African-Experience Limited to construct the building: Date Type of Cost 1 July 2011 1 July 2011 - 30 June 2014 Building Material Labour Amount R 4 500 000 000 1 000 000 000 WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg Show all Type here to search (ENG 09:11 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... De OpenWrt Project.... S Win Extra * Contrast | Joonie Arduino-based Coll... Just Another Day... option was 12% per annum. On 1 July 2011, African-Experience Limited commenced with constructing the building. This construction project was anticipated to take a period of 3 years to complete i.e. the period beginning 1 July 2011 and ending 30 June 2014. The building is a qualifying asset as defined in IAS 23 Borrowing Costs. The following costs were incurred by African-Experience Limited to construct the building: Date Type of Cost Building Material 1 July 2011 1 July 2011 - 30 June 2014 Amount R 4 500 000 000 1 000 000 000 Labour TOTAL 5 500 000 000 African-Experience Limited paid the above costs upfront to the construction company. The costs to construct were first paid out of the loan advance received from Beep-Bank and then from the proceeds of the debenture issue. The building was ready and available for use on 1 July 2014. On 1 July 2011, African-Experience engaged Mr. Ndlebe, a professional valuer, to determine how much it would cost African-Experience to restore the land back to its original condition as per the agreement with the Department of Rural Development and Land Reform. Based on the approved architectural plans, Mr. Ndlebe determined that the following costs would be incurred to fulfil the requirements of the agreement when the building was complete: WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image.jpeg A WhatsApp Image....jpeg A WhatsApp Image.jpeg Show all Type here to search (ENG 09:12 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions | Cheg X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... DIY DIY - Wireless Rou... 3 Win Extra Arduino-based Coll... Just Another Day... 200+ Arduino Proje... Date Wet OpenWrt Project... Type of Cost Contrast Joonie Amount R 4 500 000 000 Building Material 1 July 2011 1 July 2011 - 30 June 2014 Labour 1 000 000 000 TOTAL 5 500 000 000 African-Experience Limited paid the above costs upfront to the construction company. The costs to construct were first paid out of the loan advance received from Beep-Bank and then from the proceeds of the debenture issue. The building was ready and available for use on 1 July 2014. On 1 July 2011, African-Experience engaged Mr. Ndlebe, a professional valuer, to determine how much it would cost African-Experience to restore the land back to its original condition as per the agreement with the Department of Rural Development and Land Reform. Based on the approved architectural plans, Mr. Ndlebe determined that the following costs would be incurred to fulfil the requirements of the agreement when the building was complete: Cost of demolishing the buildings Rubble removal Rehabilitation of the land R 1 200 000 000 25 000 000 300 000 000 Question 1 continues on the next page... 6 WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search (ENG 09:12 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions | Ches X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... Wet OpenWrt Project:... 3 Win Extra Contrast Joonie Arduino-based Coll... Just Another Day... 9 OCTOBER 2020 QUESTION 1 continued During the financial year ended 30 June 2020, African-Experience Limited has been significantly impacted by the Covid-19 pandemic. There has been a substantial decline in the demand for leisure travel due to the national lockdown regulations. The holiday resort is the smallest identifiable group of assets that generate cash flows independently that African-Experience Limited owns, and includes all land and building and associated liabilities. The debentures do not form part of this group of assets. Mr. Ndlebe has prepared the following calculation at 30 June 2020 that reflects the expected future cash flows of the holiday resort: (You do not need to check the accuracy of this calculation. You may assume it is accurate, and includes the lease liability and the decommissioning provision) 2021 2022 541 891 320 552 729 140 -352 229 358 359 273 941 2023 2024 563 783 720 575 059 400 -366 459 418 -373 788 610 Cash inflow Cash outflows Terminal Value Net Cash flow before tax PV @ 10.5% NPV/VIU 2025 586 560 600 -381 264 390 4927 109 040 5 132 405 250 4644 710 633 189 661 962 171 639 785 5 352 142 537 193 455 199 175 072 578 197 324 302 178 574 029 201 270 790 182 145 511 Mr. Ndlebe also determined that African-Experience Limited could sell the resort for R5 339 565 896 at 30 June 2020. This value is calculated after taking into account the fair WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg Show all Type here to search 4x ENG 09:13 2020/10/09 (2) Complete design and simulati x C Search Textbook Solutions Che X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : * Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... We OpenWrt Project... 3 Win Extra * Contrast Joonie Arduino-based Coll... Just Another Day... 7 / 11 ZZZS TO 27941 S00459410 7700 10 2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Castrolows Terminal Value Net Cash flow before tax PV @ 10.5% NPV/VIU 189 661 962 171 639 785 5352 142 537 193 455 199 175 072 578 197 324 302 178 574 029 201 270 790 182 145 511 301 2040 4927 109 040 5 132 405 250 4 644 710 633 Mr. Ndlebe also determined that African-Experience Limited could sell the resort for R5 339 565 896 at 30 June 2020. This value is calculated after taking into account the fair value of the costs to restore the land (to its original condition as per the agreement with the Department of Rural Development and Land Reform) that would be incurred by the prospective buyer, as well as the cost to close the sale. Question 1 continues on the next page... + WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search la 4* ENG 09:13 2020/10/09 D (2) Complete design and simulati x C Search Textbook Solutions Che X WhatsApp 2020_ACC300_S3BCTO2_FI_ACTIV X + c File C:/Users/27769/Downloads/2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf Error : * Apps Maps No Beginning N... 200+ Arduino Proje... DIY DIY - Wireless Rou... We OpenWrt Project... 3 Win Extra * Contrast | Joonie Arduino-based Coll... Just Another Day... 2020_ACC300_S3BCTQ2_FI_ACTIVITY2_UNPROTECTED.pdf 8 / 11 QUESTION 1 continued Additional Information: The loan from Beep-Bank was repaid in full by African-Experience Limited on 30 June 2017 Land is accounted for using the cost model as prescribed by IFRS 16 Leases. The buildings and equipment are accounted for using the cost model as per IAS 16 Property, Plant and Equipment. The resort is depreciated on a straight-line basis over the period that African-Experience Limited may use the land, to a residual value of nil. You may assume a market related interest rate for African-Experience Limited of 10.5% (pre-tax), for all financial years. ++ You may assume an incremental borrowing rate for African-Experience Limited of 13.5% (pre-tax), for all financial years. Ignore taxation and VAT for the purposes of this question. + WhatsApp Image....jpeg WhatsApp Image....jpeg WhatsApp Image.jpeg WhatsApp Image...jpeg WhatsApp Image....jpeg Show all Type here to search H la 4* ENG 09:14 2020/10/09 D