Question 12

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Assume the correct profit for the year amount is R164 530. Which alternative represents the correct amount for total comprehensive income for the year in the statement of profit or loss and other comprehensive income of KPMJ Ltd for the year ended 28 February 2022?

a.

R 250 530

b.

R 301 000

c.

R 164 530

d.

R 220 230

e.

R 265 530

Clear my choice

The following information pertains to KPMJ Ltd and covers questions 13 24:

KPMJ Ltd is a company incorporated in 2017 and has a 28 February financial year-end. The companys accountant presented the following information to you as the accounting officer of the company:

KPMJ LTD

EXTRACT OF BALANCES AS AT 28 FEBRUARY 2022:

	R
Retained earnings (1 March 2021)	200,900
Share capital: Ordinary shares (1 March 2021)	600,900
Inventory (1 March 2021)	34,700
Trade receivables control	244,200
Petty cash	5,900
Loan: PWA Bank	102,600
SARS (income tax) (Dr)	24,500
Land and buildings at revaluation	963,900
Equipment at cost	501,900
Accumulated depreciation: Equipment	72,000
Revaluation surplus (1 March 2021)	85,000
Income received in advance	6,900
Allowance for credit losses	5,200
Bank (Dr)	111,900
Trade payables control	189,300
Auditor's remuneration	36,100
Sales	1,163,730
Carriage on sales	2,000
Settlement discount received	1,700
Allowance for settlement discount granted	6,300
Purchases	234,800
Salaries and wages	229,900
Carriage on purchases	1,400
Directors remuneration	174,000
Settlement discount granted	7,200
Stationery	10,500
Telephone	5,100

Additional information:

1. The allowance for credit losses must be adjusted to R7 600. A debtor who owes the business R9 300 was declared insolvent and must be written off as irrecoverable.

2. The income tax for the financial year ended 28 February 2022 amounted to R121 100 and must still be recorded.

3. Authorised share capital is 400 000 NPV ordinary shares. Share capital stated above consists of ordinary shares issued at R3.5 per share. On 01 December 2021, the directors issued 57 000 shares at R4.8 per share, the shares were taken up by the public on 1 February 2022, this transaction has not been recorded.

4. The loan from PWA was acquired on 1 March 2018 at an interest rate of 8% per annum. Interest on all loans for the current financial year has not yet been accounted for. The loan is repayable in four annual equal instalments with effect from 1 March 2022.

5. Directors made the following resolutions at year end

Dividends declared at 80 cents per share and will paid at the end of April 2022

A total bonus amounting to R82 500 must be paid to directors on 30 April 2022

Only 30% of the auditors fees stated above was settled at the year end, with the remainder to be paid to the auditors during the second week of March 2022.

The above transactions have not been recorded.

6. Provision of R44 200 must still be made for depreciation on equipment.

7. Inventory on 28 February 2022 consisted of the following:

Inventory (stock) on hand R48 900

Stationary on hand R 8 300

8. The revaluation of land for the current year resulted in a revaluation surplus amounting to R101 000.

Which alternative represents the correct amount for carrying amount of land and buildings in the statement of financial position of KPMJ Ltd as at 28 February 2022?

1.

R1,163,730

2.

R1,456,600

3.

R1,341,000

4.

R1,064,900

5.

R1,336,400