po Adobe Acrobat Reader DC 20 Columns Comp... 21 Influence Liner ACCT 102 MAIN AS... * 3 / 9 66,7% IGNORE VAT You have recently been appointed as the accountant of Exquisite Pools (Ply) Ltd (Exquisite Pools), based in Hillcrest, KwaZulu-Natal. The company supplies, delivers and installs a range of locally pluced customised fibreglass pools to the public and has a 30 September year end previous accountant (Maggie) passed away during October 2020 after a month long illness due to complications associated with the Coronavirus. As a result, the current year's financial statements for the year ended 30 September 2020 have yet been finalised As a result of the worldwide pandemic caused by the Coronavirus, South Africa declared a national state of disaster and implemented an alert level 5 national lockdown effective 27 March 2020. Exquisite Pools was forced to close on this date by the Department of Trade, Industry and Competition as they do not provide "essential goods and services Exquisite Pools resumed business after the national restrictions were lowered to an alert level 1 on 21 September 2020 Mr Blue, the majority shareholder and sole director has provided you with the extracts of the pre-adjustment trial balance as at 30 September 2020, presented below. This trial balance reflects amounts before taking into account any of the additional information that follows DEBIT CREDIT Additional Information R R 1,2 3 900.000 Land: Cost Warehouse Cost 1,3 10 500 000 1.3 1417 500 Warehouse Accumulated depreciation 1 October 2019 Delivery Truck Cost 4,5 8.9 8 600 000 Trade Receivables (1 October 2019 R6 600 000) 9 320 000 7 2 500 000 Allowance for doubtful debts- 1 October 2019 Inventory - 1 October 2019 Trade payables (1 October 2019. R 3 800 000) Current tax liability (1 October 2019 R 1 365 000) 5 900 000 1 600 000 16 200 000 Revenue HUUL ALIUual Reduer LR 20_Columns Comp... 21 Influence lines.... ACCT 102 MAIN AS... * 4 19 66,7% Extracts of the pre-adjustment trial balance...continued... Additional DEBIT CREDIT Information R R Purchases 8 7 600 000 Advertising 40 000 Bank Charges 13 450 Delivery expense 60 000 Depreciation 1,2,3,4,5 ? Electricity and water 6 26 400 Insurance 65 000 Motor vehicle expenses 23 650 Salaries and wages 925 000 Taxation expense 10 1 487 695 Telephone expense 4 500 Additional information: 1. It is the policy of Exquisite Pools to account for land using the revaluation model The warehouse and the delivery truck are accounted for using the cost model 2. A revaluation of land took place on 30 September 2020 and the fair value was mp... 20 Columns Comp... 21 Influence tar ACCT 102 MAIN AS... X 4 / 9 66,7% Additional information: 1. It is the policy of Exquisite Pools to account for land using the revaluation model The warehouse and the delivery truck are accounted for using the cost model. 2. A revaluation of land took place on 30 September 2020 and the fair value was estimated to be R4 500 000 3. The warehouse was purchased and ready for use on 1 October 2016 with an estimated useful life of 20 years and a residual value of 10% of its purchase price An impairment test conducted on the warehouse on 30 September 2020 revealed The warehouse has a value in use of R6 535 000, and A fair value of R7 350 000. To sell however, certain pool storage structures will have to be brought down and dismantled at a cost of R250 000 The residual value of the warehouse remained unchanged. 4. Delivery of the pools requires a specialized "abnormal load" delivery truck. Exquisite pools previously outsourced the delivery of the pools to other transport companies. However as a result of increasing sales experienced during 2018 and the first half of 2019, Exquisite Pools purchased a customised "abnormal load" delivery truck from a German custom truck manufacturer. The truck was ordered on 21 July 2019 from the German supplier at a cost of 130 000. The truck was then ready to be shipped free on board destination point" on 8 August 2019 The truck arrived at the Durban harbour on 5 October 2019. Full payment was made to the supplier on 5 October 2019 Page 4 of 9 ACCOUNTING 102: MAIN ASSIGNMENT 2020 change rates of () Euros to (R) Rands during 2019 were as follows ACCT 102 MAIN AS... X 5 / 9 66,7% The exchange rates of (osto (R) Rands during 2019 were as follows: Date Euros () Rand (R) 21 July 2019 1 19.03 08 August 2019 1 20.78 05 October 2019 1 19.30 . . . The following costs were incurred during October 2019, before the truck was available for use as intended by management: Import duties of R51 000 was incurred for the shipment of the truck on 5 October 2019 A transport company charged Exquisite Pools R8 895 to transport the truck from Durban harbor to its premises Four (4) safety cushion brackets required for installation on the truck were purchased at a cost of R3 690 each Two (2) engineers were required to install the safety cushion brackets and test run' the truck at a cost of R3 300 per engineer Additional advertising costs of R10 000 were incurred during October 2019 as Mr Blue believed that higher sales could be achieved as a result of the new delivery truck. The cost of advertising has not been recorded as the previous accountant was unsure how to treat it. The truck was available and ready for use on 31 October 2019. The truck had an estimated useful life of 5 years and an expected residual value of R140 000 at the end of its useful life. 5. On 30 September 2020 when returning from a delivery in the south coast, the delivery truck landed in a ditch off the N2 highway. According to the official accident report issued by the local police; "the cause of the accident was a result of the driver being under the influence of alcohol and falling asleep whilst driving The driver did not dispute the reason provided in the report and was subsequently dismissed The damages to the truck were assessed to be beyond repair and the truck was scrapped Exquisite Pools insurance brokers only agreed to pay out 25% of the trucks carrying amount as at 30 September, due to the driver's intoxication per the accident report. The insurance payout was received on 10 October 2020 from the insurers. No depreciation for any assets have been recorded for the current year 6. An amount of R3 650 for electricity and water for the month of September 2020 is still outstanding No entries have been recorded in this regard 7. Exquisite Pools uses the periodic inventory system for recording inventory movements. The year-end inventory count revealed that the total value of pools on hand at year-end, before identifying any damaged items, was R4 600 000 Immediately after the inventory count, a quality inspection was conducted and it was discovered that 10 pools were accidently cracked when moved by warehouse employees during the inventory count process Each damaged pool had a cost price of R96 000 A property developer in Durban has offered to purchase all the damaged pools for R50 000 each as they wish to refurbish the pools and use them as water fountains at their office park development in Umhlanga. In terms of the agreement with the property developer, Exquisite Pools would have to transport the damaged pools to the office park. The cost to transport the damaged pools has been correctly calculated at R1 000 per pool 8. During September 2020, a debtor with a balance owing of R150 000 - included in trade receivables - was declared insolvent. Pool Kings negotiated a settlement of 20c for every Rand outstanding which was received on 26 September 2020 9. Mr. Blue has reliably estimated that 5% of the remaining trade receivables balance as at 30 September 2020 should be recognised as a doubtful debt. The percentage has increased from the 2019 financial year. 10. Assume that the taxation expense for the year has been correctly calculated. 11. Mr Blue is concerned by media reports that a second wave of the spread of the Coronavirus could possibly force the South African government to implement another level 5 lockdown in the forthcoming months. He expressed his concern to you in the below e-mail: "Dear New Accountant I hope that you are settling into your new job well Kindly provide your input on the two matters below 1) As you are aware all our sales to customers are credit and all purchases from suppliers are also on credit Due to this I am very womed about the possibility of South Africa retuming to a level 5 lockdown as the last time this happened, Exquisite Pools still had to make payments to our suppliers even though our debtors were not making payments to us I discussed this with the previous accountant Maugel and the buy My lieyoudled a settlement of 200 UI every and outstanding which was received on 26 September 2020. 9. Mr. Blue has reliably estimated that 5% of the remaining trade receivables balance as at 30 September 2020 should be recognised as a doubtful debt. The percentage has increased from the 2019 financial year 10. Assume that the taxation expense for the year has been correctly calculated 11. Mr Blue is concerned by media reports that a second wave of the spread of the Coronavirus could possibly force the South African government to implement another level 5 lockdown in the forthcoming months. He expressed his concern to you in the below e-mail: "Dear New Accountant I hope that you are settling into your new job well Kindly provide your input on the two matters below: 1) As you are aware all our sales to customers are on credit and all purchases from suppliers are also on credit. Due to this, I am very womed about the possibility of South Africa returning to a level 5 lockdown as the last time this happened, Exquisite Pools still had to make payments to our suppliers even though our debtors were not making payments to us. 1 discussed this with the previous accountant (Maggie) and she was busy working on some calculation based on the 2019 financial year-end that shows how many days it takes for some cycle to be complete Page 6 of 9 LI ACCT 102 MAIN AS... X 7 / 9 66,7% th ACCOUNTING 102: MAIN ASSIGNMENT 2020 I do not understand these accounting terms as I am a pool technician by profession. I did manage to find the calculations she left on my desk before she went off sick 2019 Debtors' collection period -175 days Days inventory on hand - 220 days Creditors' payme perod - 256 days I always trusted Maggie's judgement as she was always good with figures but I do not know what to make of these numbers 2) We have to make sure that our deliveries to customers still take place even though we do not have sufficient cash resources to replace our delivery truck that was scrapped in October 2020. Thave called a truck hire company (Havis Rentals) and they can rent out a delivery truck already equipped for pool deliveries, to us for 6 months at a cost of R30 000 per month I have asked Havis Rentals to send a copy of the rental agreement directly to you Before we purchased our delivery truck in 2019 we used to outsource dur deliveries to local transport companies. However, since the hired truck will be in our possession and we can do as we please with it propose that we record the truck as an asset in our books at the total cost of R180 000 being R30 000 for 6 months Kind Regards, Mr Blue RUCI 102 MAIN AS X 8 / 9 66,7% conditions are relevant . For the duration of six (6) months, Exquisite Pools (Pty) Ltd will use the delivery truck only for the purposes of delivering pools to its customers, as specified, Exquisite Pools (Pty) Ltd will be responsible for any diesel, oils and any foll fees where necessary, At all times during this agreement, the truck remains the property of Havis Rentals and cannot be modified to any extent (including any advertising stickers or signs on the truck) by Exquisite Pools (Pty) Ltd The monthly rental fee of R30 000 includes a mandatory insurance levy of R4 000 per month Havis Rentals are liable for any licensing fees. REQUIRED: Marks Round off answers to the nearest Rand where necessary 1 Refer to point 4 of the additional information: 12 Identify each of the items that make up the 'Cost of the delivery truck on initial measurement and calculate the total 'Cost of the delivery truck on 31 October 2019 in accordance with IAS16 Property. Plant and Equipment. Give a short reason for the items you are including in the cost as well as those items which you are excluding from the cost Refer to point 5 of the additional information Prepare all the necessary journal entries to record the scrapping of the delivery truck - including depreciation and insurance-related matters in the General Journal of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 2 14 3 Use the information provided in the extract of trial balance and points 1 to 10 of the additional information to Prepare the Statement of profit or loss and other comprehensive income of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 22 3.1 R4 000 per month Havis Rentals are liable for any licensing fees." REQUIRED: Marks Round off answers to the nearest Rand where necessary 1 Refer to point 4 of the additional information: 12 Identify each of the items that make up the 'Cost' of the delivery truck on initial measurement and calculate the total 'Cost' of the delivery truck on 31 October 2019 in accordance with IAS16 Property, Plant and Equipment. Give a short reason for the items you are including in the cost as well as those items which you are excluding from the cost. 2 Refer to point 5 of the additional information: 14 Prepare all the necessary journal entries to record the scrapping of the delivery truck - including depreciation and insurance-related matters in the General Journal of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 3 Use the information provided in the extract of trial balance and points 1 to 10 of the additional information to: 3.1 22 Prepare the Statement of profit or loss and other comprehensive income of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 The entity discloses each item of income and expenses separately Prepare the "Cash generated from operating activities" section of the Statement of Cash Flows of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020, using the indirect method in accordance with International Financial Reporting Standards. 14 3.2 ignore comparatives and note disclosures for both 3.1 and 3.2 Page 8 of 9 MTING 102: MAIN ASSIGNMENT 2020 ACCOUNTING 102: MAIN ASSIGNMENT 2020 4 Refer to point 11 of the additional information: 2. 6 a) What cycle was the previous accountant most likely trying to analyse with the given ratios? Briefly explain what this cycle determines. b) Calculate the cycle stated in (a) above for both the 2019 and the 2020 financial years. Assume that the previous accountant's calculations for the 2019 year were correct. c) Briefly discuss the change in cycle from the 2019 to 2020 year and explain what factors could have directly affected this change d) Discuss whether you agree or disagree with Mr Blue's proposed treatment of the hired delivery truck in the financial statements of Exquisite Pools (Pty) Ltd. 3 7 80 TOTAL po Adobe Acrobat Reader DC 20 Columns Comp... 21 Influence Liner ACCT 102 MAIN AS... * 3 / 9 66,7% IGNORE VAT You have recently been appointed as the accountant of Exquisite Pools (Ply) Ltd (Exquisite Pools), based in Hillcrest, KwaZulu-Natal. The company supplies, delivers and installs a range of locally pluced customised fibreglass pools to the public and has a 30 September year end previous accountant (Maggie) passed away during October 2020 after a month long illness due to complications associated with the Coronavirus. As a result, the current year's financial statements for the year ended 30 September 2020 have yet been finalised As a result of the worldwide pandemic caused by the Coronavirus, South Africa declared a national state of disaster and implemented an alert level 5 national lockdown effective 27 March 2020. Exquisite Pools was forced to close on this date by the Department of Trade, Industry and Competition as they do not provide "essential goods and services Exquisite Pools resumed business after the national restrictions were lowered to an alert level 1 on 21 September 2020 Mr Blue, the majority shareholder and sole director has provided you with the extracts of the pre-adjustment trial balance as at 30 September 2020, presented below. This trial balance reflects amounts before taking into account any of the additional information that follows DEBIT CREDIT Additional Information R R 1,2 3 900.000 Land: Cost Warehouse Cost 1,3 10 500 000 1.3 1417 500 Warehouse Accumulated depreciation 1 October 2019 Delivery Truck Cost 4,5 8.9 8 600 000 Trade Receivables (1 October 2019 R6 600 000) 9 320 000 7 2 500 000 Allowance for doubtful debts- 1 October 2019 Inventory - 1 October 2019 Trade payables (1 October 2019. R 3 800 000) Current tax liability (1 October 2019 R 1 365 000) 5 900 000 1 600 000 16 200 000 Revenue HUUL ALIUual Reduer LR 20_Columns Comp... 21 Influence lines.... ACCT 102 MAIN AS... * 4 19 66,7% Extracts of the pre-adjustment trial balance...continued... Additional DEBIT CREDIT Information R R Purchases 8 7 600 000 Advertising 40 000 Bank Charges 13 450 Delivery expense 60 000 Depreciation 1,2,3,4,5 ? Electricity and water 6 26 400 Insurance 65 000 Motor vehicle expenses 23 650 Salaries and wages 925 000 Taxation expense 10 1 487 695 Telephone expense 4 500 Additional information: 1. It is the policy of Exquisite Pools to account for land using the revaluation model The warehouse and the delivery truck are accounted for using the cost model 2. A revaluation of land took place on 30 September 2020 and the fair value was mp... 20 Columns Comp... 21 Influence tar ACCT 102 MAIN AS... X 4 / 9 66,7% Additional information: 1. It is the policy of Exquisite Pools to account for land using the revaluation model The warehouse and the delivery truck are accounted for using the cost model. 2. A revaluation of land took place on 30 September 2020 and the fair value was estimated to be R4 500 000 3. The warehouse was purchased and ready for use on 1 October 2016 with an estimated useful life of 20 years and a residual value of 10% of its purchase price An impairment test conducted on the warehouse on 30 September 2020 revealed The warehouse has a value in use of R6 535 000, and A fair value of R7 350 000. To sell however, certain pool storage structures will have to be brought down and dismantled at a cost of R250 000 The residual value of the warehouse remained unchanged. 4. Delivery of the pools requires a specialized "abnormal load" delivery truck. Exquisite pools previously outsourced the delivery of the pools to other transport companies. However as a result of increasing sales experienced during 2018 and the first half of 2019, Exquisite Pools purchased a customised "abnormal load" delivery truck from a German custom truck manufacturer. The truck was ordered on 21 July 2019 from the German supplier at a cost of 130 000. The truck was then ready to be shipped free on board destination point" on 8 August 2019 The truck arrived at the Durban harbour on 5 October 2019. Full payment was made to the supplier on 5 October 2019 Page 4 of 9 ACCOUNTING 102: MAIN ASSIGNMENT 2020 change rates of () Euros to (R) Rands during 2019 were as follows ACCT 102 MAIN AS... X 5 / 9 66,7% The exchange rates of (osto (R) Rands during 2019 were as follows: Date Euros () Rand (R) 21 July 2019 1 19.03 08 August 2019 1 20.78 05 October 2019 1 19.30 . . . The following costs were incurred during October 2019, before the truck was available for use as intended by management: Import duties of R51 000 was incurred for the shipment of the truck on 5 October 2019 A transport company charged Exquisite Pools R8 895 to transport the truck from Durban harbor to its premises Four (4) safety cushion brackets required for installation on the truck were purchased at a cost of R3 690 each Two (2) engineers were required to install the safety cushion brackets and test run' the truck at a cost of R3 300 per engineer Additional advertising costs of R10 000 were incurred during October 2019 as Mr Blue believed that higher sales could be achieved as a result of the new delivery truck. The cost of advertising has not been recorded as the previous accountant was unsure how to treat it. The truck was available and ready for use on 31 October 2019. The truck had an estimated useful life of 5 years and an expected residual value of R140 000 at the end of its useful life. 5. On 30 September 2020 when returning from a delivery in the south coast, the delivery truck landed in a ditch off the N2 highway. According to the official accident report issued by the local police; "the cause of the accident was a result of the driver being under the influence of alcohol and falling asleep whilst driving The driver did not dispute the reason provided in the report and was subsequently dismissed The damages to the truck were assessed to be beyond repair and the truck was scrapped Exquisite Pools insurance brokers only agreed to pay out 25% of the trucks carrying amount as at 30 September, due to the driver's intoxication per the accident report. The insurance payout was received on 10 October 2020 from the insurers. No depreciation for any assets have been recorded for the current year 6. An amount of R3 650 for electricity and water for the month of September 2020 is still outstanding No entries have been recorded in this regard 7. Exquisite Pools uses the periodic inventory system for recording inventory movements. The year-end inventory count revealed that the total value of pools on hand at year-end, before identifying any damaged items, was R4 600 000 Immediately after the inventory count, a quality inspection was conducted and it was discovered that 10 pools were accidently cracked when moved by warehouse employees during the inventory count process Each damaged pool had a cost price of R96 000 A property developer in Durban has offered to purchase all the damaged pools for R50 000 each as they wish to refurbish the pools and use them as water fountains at their office park development in Umhlanga. In terms of the agreement with the property developer, Exquisite Pools would have to transport the damaged pools to the office park. The cost to transport the damaged pools has been correctly calculated at R1 000 per pool 8. During September 2020, a debtor with a balance owing of R150 000 - included in trade receivables - was declared insolvent. Pool Kings negotiated a settlement of 20c for every Rand outstanding which was received on 26 September 2020 9. Mr. Blue has reliably estimated that 5% of the remaining trade receivables balance as at 30 September 2020 should be recognised as a doubtful debt. The percentage has increased from the 2019 financial year. 10. Assume that the taxation expense for the year has been correctly calculated. 11. Mr Blue is concerned by media reports that a second wave of the spread of the Coronavirus could possibly force the South African government to implement another level 5 lockdown in the forthcoming months. He expressed his concern to you in the below e-mail: "Dear New Accountant I hope that you are settling into your new job well Kindly provide your input on the two matters below 1) As you are aware all our sales to customers are credit and all purchases from suppliers are also on credit Due to this I am very womed about the possibility of South Africa retuming to a level 5 lockdown as the last time this happened, Exquisite Pools still had to make payments to our suppliers even though our debtors were not making payments to us I discussed this with the previous accountant Maugel and the buy My lieyoudled a settlement of 200 UI every and outstanding which was received on 26 September 2020. 9. Mr. Blue has reliably estimated that 5% of the remaining trade receivables balance as at 30 September 2020 should be recognised as a doubtful debt. The percentage has increased from the 2019 financial year 10. Assume that the taxation expense for the year has been correctly calculated 11. Mr Blue is concerned by media reports that a second wave of the spread of the Coronavirus could possibly force the South African government to implement another level 5 lockdown in the forthcoming months. He expressed his concern to you in the below e-mail: "Dear New Accountant I hope that you are settling into your new job well Kindly provide your input on the two matters below: 1) As you are aware all our sales to customers are on credit and all purchases from suppliers are also on credit. Due to this, I am very womed about the possibility of South Africa returning to a level 5 lockdown as the last time this happened, Exquisite Pools still had to make payments to our suppliers even though our debtors were not making payments to us. 1 discussed this with the previous accountant (Maggie) and she was busy working on some calculation based on the 2019 financial year-end that shows how many days it takes for some cycle to be complete Page 6 of 9 LI ACCT 102 MAIN AS... X 7 / 9 66,7% th ACCOUNTING 102: MAIN ASSIGNMENT 2020 I do not understand these accounting terms as I am a pool technician by profession. I did manage to find the calculations she left on my desk before she went off sick 2019 Debtors' collection period -175 days Days inventory on hand - 220 days Creditors' payme perod - 256 days I always trusted Maggie's judgement as she was always good with figures but I do not know what to make of these numbers 2) We have to make sure that our deliveries to customers still take place even though we do not have sufficient cash resources to replace our delivery truck that was scrapped in October 2020. Thave called a truck hire company (Havis Rentals) and they can rent out a delivery truck already equipped for pool deliveries, to us for 6 months at a cost of R30 000 per month I have asked Havis Rentals to send a copy of the rental agreement directly to you Before we purchased our delivery truck in 2019 we used to outsource dur deliveries to local transport companies. However, since the hired truck will be in our possession and we can do as we please with it propose that we record the truck as an asset in our books at the total cost of R180 000 being R30 000 for 6 months Kind Regards, Mr Blue RUCI 102 MAIN AS X 8 / 9 66,7% conditions are relevant . For the duration of six (6) months, Exquisite Pools (Pty) Ltd will use the delivery truck only for the purposes of delivering pools to its customers, as specified, Exquisite Pools (Pty) Ltd will be responsible for any diesel, oils and any foll fees where necessary, At all times during this agreement, the truck remains the property of Havis Rentals and cannot be modified to any extent (including any advertising stickers or signs on the truck) by Exquisite Pools (Pty) Ltd The monthly rental fee of R30 000 includes a mandatory insurance levy of R4 000 per month Havis Rentals are liable for any licensing fees. REQUIRED: Marks Round off answers to the nearest Rand where necessary 1 Refer to point 4 of the additional information: 12 Identify each of the items that make up the 'Cost of the delivery truck on initial measurement and calculate the total 'Cost of the delivery truck on 31 October 2019 in accordance with IAS16 Property. Plant and Equipment. Give a short reason for the items you are including in the cost as well as those items which you are excluding from the cost Refer to point 5 of the additional information Prepare all the necessary journal entries to record the scrapping of the delivery truck - including depreciation and insurance-related matters in the General Journal of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 2 14 3 Use the information provided in the extract of trial balance and points 1 to 10 of the additional information to Prepare the Statement of profit or loss and other comprehensive income of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 22 3.1 R4 000 per month Havis Rentals are liable for any licensing fees." REQUIRED: Marks Round off answers to the nearest Rand where necessary 1 Refer to point 4 of the additional information: 12 Identify each of the items that make up the 'Cost' of the delivery truck on initial measurement and calculate the total 'Cost' of the delivery truck on 31 October 2019 in accordance with IAS16 Property, Plant and Equipment. Give a short reason for the items you are including in the cost as well as those items which you are excluding from the cost. 2 Refer to point 5 of the additional information: 14 Prepare all the necessary journal entries to record the scrapping of the delivery truck - including depreciation and insurance-related matters in the General Journal of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 3 Use the information provided in the extract of trial balance and points 1 to 10 of the additional information to: 3.1 22 Prepare the Statement of profit or loss and other comprehensive income of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020 The entity discloses each item of income and expenses separately Prepare the "Cash generated from operating activities" section of the Statement of Cash Flows of Exquisite Pools (Pty) Ltd for the year ended 30 September 2020, using the indirect method in accordance with International Financial Reporting Standards. 14 3.2 ignore comparatives and note disclosures for both 3.1 and 3.2 Page 8 of 9 MTING 102: MAIN ASSIGNMENT 2020 ACCOUNTING 102: MAIN ASSIGNMENT 2020 4 Refer to point 11 of the additional information: 2. 6 a) What cycle was the previous accountant most likely trying to analyse with the given ratios? Briefly explain what this cycle determines. b) Calculate the cycle stated in (a) above for both the 2019 and the 2020 financial years. Assume that the previous accountant's calculations for the 2019 year were correct. c) Briefly discuss the change in cycle from the 2019 to 2020 year and explain what factors could have directly affected this change d) Discuss whether you agree or disagree with Mr Blue's proposed treatment of the hired delivery truck in the financial statements of Exquisite Pools (Pty) Ltd. 3 7 80 TOTAL