. QUESTION TWO (20 MARKS) B Limited paid for this dividend, therefore the dividend should not represent income for B Limited The dividend component is deducted from the price paid for the shares to calculate the clean price of the shares. The shares were acquired for R44 000, but R1 000 (20 000 x 5c) relates to the dividend that was paid for as the price quoted was a cum-dividend price. Therefore, the clean price of the shares is R43000. Assuming that the shares and dividends were paid for on 30 March 2013 and the dividend was received on 31 May 2013. Provide for journals when B Limited paid for both shares and dividends and when the dividend was actually received.

QUESTION THREE (20 MARKS) On 15 June 2012. A Limited, invests in a bond at cost price R980 000 + R4 110 = R984 110. The R4 110 is an advance receipt for interest, which was deducted from the selling price. The buyer will not receive the cash for this interest earned. The seller will receive it, but the buyer will earn the interest, resulting in the recognition of the interest earned at 30 June 2012. Provide for Journal entries, for the Investment in a bond by A Limited as at 15 June 2012 and when interest is earned on 30 June 2012.

QUESTION FOUR (30 MARKS) A plant has a cost of R1 000 000 and accumulated depreciation of R 300 000 at the end of year 3. The fair value less costs to sell of the plant is R650 000. The following figures show the expected cash flows from the use of the plant, and discounting thereof. Table: 1 R' 000 Future Cash Flows Present value of future cash flows discounted at 12% Year 4 420 Year 5 570 Year 6 380 Year 7 450 Year 8 510 Year 9 510 Year 10 480 Determine whether the plant is impaired or not by using the information given, show all calculation