Profit for the current reporting period amounted to R$948060.$

At a meeting of the board of directors on $20$ December $2015$ it was decided to accelerate the

depreciation on the manufacturing equipment to $25\%$ per annum. At acquisition date $(1$ January

$,$ the equipment was to be depreciated at $20\%$ per annum. The cost of the equipment was

R$478800($including $14\%$ VAT$).$ Upon closer inspection you find that the junior accountant did not

adjust the depreciation rate in $2015$ however for $2016$ the depreciation was accounted for correctly.

A piece of land which was purchased in $2014$ for R$500000$ was revalued on $30$ November $2016$ for

the first time. The land was valued at R$620000$ as at $30$ November $2016.$

The applicable tax rate is $28\%.$

REQUIRED:

a$)$ Prepare the Statement of Changes in Equity for AZD Ltd for the reporting period ended $31$ December

Notes: The total column is NOT required.

b$)$ Disclose point $5$ above as a note to the financial statements of AZD Ltd for the reporting period ended

$31$ December $2016$ in accordance with IAS $8($Accounting policies, changes in accounting estimates

and prior period errors$)$UNIT $3$ ASSIGNMENT

ASSIGNMENT

The purpose of this assignment is to assist you to integrate the concepts you have learnt in Unit $3.$

Instructions

Step $1$: Read through the question and prepare your solution. This can be either be a handwritten solution

or electronically $($Word or Excel$).$

Step $2$: You are required to attempt the question and prepare your solution. This can be either be a

handwritten solution scanned and submitted as a PDF or prepared electronically $($Word or Excel$)$ and

saved as a PDF$.$ Once you have prepared your solution you are required to submit it on Moodle. A

suggested solution and feedback to the assignment will be provided after the due date.

ASSIGNMENT

You are the financial manager of AZD Ltd$,$ a manufacturer of state of the art sound equipment and have

been provided with the following financial information.

The following balances existed as at $1$ January $2016$:

Additional Notes:

In order to raise capital to fund the construction of a new production facility, management issued the

following shares on $1$ July $2016$ :

$100000$ ordinary shares at R$15$ per share.

$3000012\%$ redeemable preference shares. The redeemable preference shares are redeemable

at the option of the holder of the preference shares after $10$ years from the date of issue.

During a review of the financial records you discover that the junior accountant had not recognised

the dividend on all the redeemable preference shares in issue in the financial records for the current

reporting period.

The directors of the company declared a final dividend of $20$c per share on $30$ December $2016$ to be

paid to ordinary shareholders on $2$ February $2017\mathrm{.}4.$ Profit for the current reporting period amounted to R$948060.$

$5.$ At a meeting of the board of directors on $20$ December $2015$ it was decided to accelerate the

depreciation on the manufacturing equipment to $25\%$ per annum. At acquisition date $(1$ January

$2015),$ the equipment was to be depreciated at $20\%$ per annum. The cost of the equipment was

R$478800($including $14\%$ VAT$).$ Upon closer inspection you find that the junior accountant did not

adjust the depreciation rate in $2015$ however for $2016$ the depreciation was accounted for correctly.

$6.$ A piece of land which was purchased in $2014$ for R$500000$ was revalued on $30$ November $2016$ for

the first time. The land was valued at R$620000$ as at $30$ November $2016.$

$7.$ The applicable tax rate is $28\%.$

REQUIRED:

a$)$ Prepare the Statement of Changes in Equity for AZD Ltd for the reporting period ended $31$ December

$2016.(25)$

Notes: The total column is NOT required.

b$)$ Disclose point $5$ above as a note to the financial statements of AZD Ltd for the reporting period ended

$31$ December $2016$ in accordance with IAS $8($Accounting policies,