QUESTIONS 5.3 - (40 marks) (48 minutes) The following list of balances was extracted from the accounting records of Aces Ltd on 28 February 2015: Additional information 1. The following information regarding property, plant and equipment is available: 1.1 Land consists of Erf 300 , Rietspruit and is owner-occupied. 1.2 Buildings consist of a factory and offices situated on erf 300 , Rietspruit. The building was completed on 28 February 2012 and depreciation is provided for on the straight-line method. The building was erected for owner-occupation. The total useful life of the building was estimated at 50 years on initial recognition and has since remained unchanged. 1.3 On 1 March 2014, the land and buildings in 1.1 and 1.2 were revalued on the netreplacement basis by Mr Ben, an independent sworn appraiser at an amount of R400 000 and R4 801200 respectively. 2. All furniture and equipment was purchased on 1 March 2012. Depreciation on furniture and equipment is provided for at 20% per annum according to the reducing balance method. Furniture and equipment with a cost price of R15 000 and accumulated depreciation of R5 400 on 1 March 2014, was sold for R7 000 on 31 December 2014. 3. All plant and machinery indicated in above balances was ready for use and brought into use on 1 March 2012. Plant and machinery is depreciated on the straight-line method over its expected useful life of 5 years. During the year, existing plant and machinery was used to build a new plant. The plant and machinery was utilised for this from 1 December 2014. The following expenses were incurred in the building of the plant until 28 February 2015 : Labour and overheads R110 000 (including abnormal overheads of R10 000) Materials R130 000 4. Investments consist of the following: 4.1 240000 Ordinary shares in Jacks Ltd at cost The issued share capital of Jacks Ltd consist of 400000 ordinary shares. The market value of the investment was R480 000 on 28 February 2015. FAC2601/QUESTION BANK QUESTION 5.3 (continued) 4.2 4000012% Preference shares in Kings Ltd at cost The issued share capital of Kings Ltd consist of 30000 ordinary shares and 60000 preference shares. The shares of Kings Ltd are traded on the JSE Ltd and the market value of the preference shares on 28 February 2015 was R5 per share. These shares were mainly acquired with the purpose of realising a short term profit 4.3 140000 Ordinary shares in Queens Ltd at cost The total issued share capital of Queens Ltd consists of 4000000 ordinary shares. The shares of Queens Ltd are traded on the JSE Ltd and the market value of the shares on 28 February 2015 was R5 per share. These shares are classified as assets at fair value through other comprehensive income (not held for trading). 5. Inventory on 28 February 2015 consist of the following: The net realisable value of raw materials is currently at a value of 90% of the original cost price thereof, and the net realisable value of finished goods is currently 5% higher than the cost price thereof. REQUIRED: Prepare the Asset section of the Statement of Financial Position, as well as the relevant notes to the Asset section of Aces Ltd as at 28 February 2015, in compliance with the requirements of International Financial Reporting Standards (IFRS). Ignore comparative figures. Ignore the notes regarding accounting policy. Show all calculations. QUESTIONS 5.3 - (40 marks) (48 minutes) The following list of balances was extracted from the accounting records of Aces Ltd on 28 February 2015: Additional information 1. The following information regarding property, plant and equipment is available: 1.1 Land consists of Erf 300 , Rietspruit and is owner-occupied. 1.2 Buildings consist of a factory and offices situated on erf 300 , Rietspruit. The building was completed on 28 February 2012 and depreciation is provided for on the straight-line method. The building was erected for owner-occupation. The total useful life of the building was estimated at 50 years on initial recognition and has since remained unchanged. 1.3 On 1 March 2014, the land and buildings in 1.1 and 1.2 were revalued on the netreplacement basis by Mr Ben, an independent sworn appraiser at an amount of R400 000 and R4 801200 respectively. 2. All furniture and equipment was purchased on 1 March 2012. Depreciation on furniture and equipment is provided for at 20% per annum according to the reducing balance method. Furniture and equipment with a cost price of R15 000 and accumulated depreciation of R5 400 on 1 March 2014, was sold for R7 000 on 31 December 2014. 3. All plant and machinery indicated in above balances was ready for use and brought into use on 1 March 2012. Plant and machinery is depreciated on the straight-line method over its expected useful life of 5 years. During the year, existing plant and machinery was used to build a new plant. The plant and machinery was utilised for this from 1 December 2014. The following expenses were incurred in the building of the plant until 28 February 2015 : Labour and overheads R110 000 (including abnormal overheads of R10 000) Materials R130 000 4. Investments consist of the following: 4.1 240000 Ordinary shares in Jacks Ltd at cost The issued share capital of Jacks Ltd consist of 400000 ordinary shares. The market value of the investment was R480 000 on 28 February 2015. FAC2601/QUESTION BANK QUESTION 5.3 (continued) 4.2 4000012% Preference shares in Kings Ltd at cost The issued share capital of Kings Ltd consist of 30000 ordinary shares and 60000 preference shares. The shares of Kings Ltd are traded on the JSE Ltd and the market value of the preference shares on 28 February 2015 was R5 per share. These shares were mainly acquired with the purpose of realising a short term profit 4.3 140000 Ordinary shares in Queens Ltd at cost The total issued share capital of Queens Ltd consists of 4000000 ordinary shares. The shares of Queens Ltd are traded on the JSE Ltd and the market value of the shares on 28 February 2015 was R5 per share. These shares are classified as assets at fair value through other comprehensive income (not held for trading). 5. Inventory on 28 February 2015 consist of the following: The net realisable value of raw materials is currently at a value of 90% of the original cost price thereof, and the net realisable value of finished goods is currently 5% higher than the cost price thereof. REQUIRED: Prepare the Asset section of the Statement of Financial Position, as well as the relevant notes to the Asset section of Aces Ltd as at 28 February 2015, in compliance with the requirements of International Financial Reporting Standards (IFRS). Ignore comparative figures. Ignore the notes regarding accounting policy. Show all calculations