QUESTION THREE $[25]$

The annual financial statements of Bongo $($Pty$)$ Ltd are in the final stages of completion for the year ended $30$ June $2023.$ The following information was extracted to prepare the statement of cash flows for the current financial year.

Bongo $($Pty $)$ Ltd

Statement of financial position as at $30$ June $2023($with comparative values for $30$ June $2022)$:

ASSETS

$30$ June $2023$

R

$30$ June $2022$

R

Equipment at carrying amount

Inventory

Trade receivables

Bank

$636000$

$48000$

$22800$

$202800$

$324000$

$45600$

$27600$

$120000$

Total Assets

$909600$

$517200$

EQUITY AND LIABILITIES

Equity

$636000$

$348000$

Ordinary share capital

Retained earnings

$396000$

$240000$

$300000$

$48000$

Liabilities

$273600$

$169200$

Long term borrowings

Trade payables

Income received in advance

SARS: Tax payable

$186000$

$25200$

$26400$

$36000$

$48000$

$76800$

$19200$

$25200$

Total Equity and Liabilities

$909600$

$517200$

Additional Information:

$1$

Authorised share capital: $1000000$ Ordinary shares

$2$

Issued share capital: $100000$ Ordinary shares were sold for cash during the current financial period.

$3$

Dividends of R$30000$ were declared and paid on $20$ June $2023.$

$4$

Equipment with a carrying amount of R$240000$ was sold and new equipment was purchased during the current financial year.

$5$

Bongo $($Pty$)$ Ltd raised a long term loan of R$168000$ in May $2023.$

$6$

The following information was extracted from the statement of comprehensive income for the year ended $30$ June $2023$:

$$

Sales for the year was R$1464000$

$$

Rental income was R$26400.$

$$

Profit on disposal of equipment R$36000$

$$

Depreciation R$48000$

$$

Interest expense R$50400$

$$

Income tax expense R$147600$

$$

Profit after tax R$222000.$

Required:

Prepare the statement of cash flows for Bongo $($Pty$)$ Ltd for the financial year ended

$30$ June $2023$ in compliance with the requirements of the International Financial Reporting

Standards $($IFRS$)$ in as much as the given information allows. Use the indirect method.

QUESTION FOUR $[25]$

Success Limited registered with the CIPC and the Certificate of Commencement was issued on

$1$ July $2022.$ Authorised share capital was granted as follows:

$$

$900000$ Ordinary shares of R$2$ each, and

$$

$40000010\%$ Preference shares of R$5$ each

The following transactions took place for the year ended $30$ June $2023.$

$2022$

$4$ July

The Founders resolved to purchase $100000$ Ordinary shares at R$2$ each and

$2000010\%$ Preference shares at R$5$ each. The share certificates for the Ordinary shares and the $10\%$ Preference Shares were issued to the Founders as agreed.

$7$ July

Upon receipt of the share certificates, the Founders paid in full as resolved.

$2$ Sept

The Company offered $100000$ Ordinary shares at R$2$ each to the public. The closing date for applications was $2$ December $2023.$

$2$ Dec

Application for $110000$ ordinary shares were received from the public with their

application monies and the regulatory application documents.

$($continued$)$

$30$ Dec

Shares were allotted to successful applicants.

$2023$

$6$ Jan

Unsuccessful applicants were refunded their application monies. The company

paid R$7300$ in respect of share issue expenses.

$1$ May

Ordinary dividends of $10$ cents per share were declared by the Directors after approval by the shareholders at the annual general meeting. Dividends were payable on $10$ June $2023.$

$10$ June

Dividends due to shareholders were paid.

$30$ June

Record the income tax expense that was calculated at R$124800$ for the current financial year. Provisional tax payments have not been made.

$30$ June

Record the closing entry at end of the financial year for the Share issue expenses of R$7300$

Required:

Prepare general journal entries to record all the relevant transactions regarding the issue of

shares during the current financial year ended $30$ June $2023.$ Include general journal entries for

the declaration and payment of dividends, the income tax expense, the payment of dividends as approved, and the year$-$end closing entry for the share issue expenses.

NB: You are required to also record the date and a short narration for each transaction