QUESTION 8 (30 marks) (36 minutes) The following information was obtained from the accounting records of Sun Ltd, a listed company, for the financial year ended 30 June 20.0: R 1 000 000 190 000 300 000 380 000 160 000 Ordinary share capital (issued at 50cents per share). 12% Long-term loan....... 10% Non-cumulative preference shares Retained earnings (1/7/19.9). Machinery and equipment at cost (1/7/19.9). Accumulated depreciation - Machinery and equipment (1/7/19.9).. Revenue (turnover) Other income. Other expenses (additional information 6 and 9) Administrative expenses Investments at cost Loan granted to Moon Ltd Income tax expense 75 000 ..3 500 000 11 550 31 960 410 650 245 000 60 000 263 421 Additional information: 1. The long-term loan from Sun Ltd was incurred on 1 January 20.0 and bears interest at 12% per annum. The interest is payable monthly in arrears. The capital portion of the loan is repayable on 31 December 20.4 2. Investments consist of the following: 100 000 Ordinary shares in Star Ltd, purchased at R2 each. Star Ltd's total issued ordinary share capital consists of 1 000 000 ordinary shares. Star Ltd's shares are traded on the JSE and the price on 30 June 20.0 was R2.50 each. This investment was designated as at fair value through other comprehensive income (not held for trading). 30 000 Ordinary shares in Moon Ltd at a cost of R45 000. Moon Ltd's total issued ordinary share capital consists of 50 000 shares. Moon Ltd's shares trade on the JSE and the price on 30 June 20.0 was R1,50 each. 3. The loan to Moon Ltd was granted on 1 July 19.9 at an interest rate of 10% per annum. The interest is payable monthly in arrears and the capital portion of the loan is repayable on 30 June 20.5. 4. Sun Ltd maintained a gross profit percentage of 40% on sales during the year. 5. Administrative expenses consist of the following: R Remuneration of directors and prescribed officers.... 180 000 Auditors' remuneration 350 Travelling expenses. 12 000 - Fee for audit.. 60 000 Accountant's salary. 150 000 Wages. 3 000 Telephone 4 200 Water and electricity 1 100 Stationery 36 FAC26011103 Interest paid R QUESTION 8 (continued) Other expenses consist of the following Long-term loan Bank overdraft Credit losses written of Sundry expenses Other Income consists of the following: pividends received 11 000 500 1 300 19 000 - Star Ltd Moon Ltd Interest received Moon Ltd. 1 200 Current account 800 - Trade and other receivables. 800 Profit on sale of machinery 1 750 6 000 The following must still be provided for: 1 000 Depreciation on machinery and equipment at 20% per annum on the carrying amount. Machinery with a cost of R10 000 and a carrying amount of R4 000 was sold on 2 July 19.9 for R5 000. Depreciation is regarded as an operating expense. 9. Resolutions taken and approved at an annual general meeting held on 29 June 20.0 but 8. not yet executed: An ordinary dividend of 50 per share was declared. REQUIRED: Prepare the statement of profit or loss and other comprehensive income, statement of changes in equity and applicable notes of Sun Ltd for the year ended 30 June 20.0 in accordance with the requirements of International Financial Reporting Standards (IFRS). Comparative figures are not required. The accounting policies note is not required