QUESTION $1(39$ marks$)$ CampMore $($Pty$)$ Ltd is a company with a $30$ June year$-$end. CampMore $($Pty$)$ Ltd$$s main business is to manufacture and sell tents. CampMore $($Pty$)$ Ltd also, as an added extra, sells gazebos that fit their tent range. Due to capacity constraints, CampMore $($Pty$)$ Ltd does not manufacture the gazebos in$-$house but rather purchases completed gazebos from the third$-$party manufacturer to sell as inventory. Tent manufacturing Below is an extract from the trial balance of CampMore $($Pty$)$ Ltd for the $30$ June $2024$ year$-$end, which the entity is in the process of finalising. R Purchases $$ raw materials $($components$)1275000$ Labour costs $$ hourly paid employees Factory staff $810000$ Administration and selling staff $280000$ Salaries and commissions Factory staff $310000$ Administrative and sales staff $140000$ Depreciation $$ plant and machinery $120000$ Depreciation $$ office equipment $10000$ The normal capacity at CampMore $($Pty$)$ Ltd$$s factory is $10000$ tents per year. Due to various factors, CampMore $($Pty$)$ Ltd$$s actual production for the $30$ June $2024$ financial year was $90\%$ of normal production capacity. ANNEXURE I: FORMATIVE ASSESSMENT $296$ HFAC$231-1-$Jan$-$Jun$2024-$FA$2-$CP$-$V$2-05122023$ Inventories relating to tent manufacturing as at $30$ June: $20232024$ R R Raw materials $($cost price$)120000210000$ Work in progress $($cost price$)165000$ Note $1$ Finished goods $($cost price$)255500$ Note $2$ Note $1$ Work in progress of CampMore $($Pty$)$ Ltd has not been finalised for the $30$ June $2024$ financial year$-$end. The production records indicate that $25\%$ of the current year$$s allocated production expenditure $($labour$,$ salaries and depreciation costs$)$ and materials used relate to tents that were still under production at the year$-$end. Note $2$ The production records indicate that $10\%$ of the current year$$s allocated production expenditure $($labour$,$ salaries and depreciation costs$)$ and materials used relate to tents that are finished and still on hand at year$-$end. Gazebos Completed gazebos are purchased from a third party on an as$-$needed basis. CampMore $($Pty$)$ Ltd purchased the following from a third party during the $2024$ financial year: Date Number of gazebos Cost per gazebo July $202330$ R$1900$ September $202350$ R$1850$ November $202325$ R$2050$ January $202460$ R$2110$ March $202445$ R$2200$ May $202440$ R$2250$ CampMore $($Pty$)$ Ltd had $55$ gazebos with a cost of R$1885$ per gazebo on hand on $1$ July $2023$ and CampMore $($Pty$)$ Ltd had $35$ gazebos on hand on $30$ June $2024.$ ANNEXURE I: FORMATIVE ASSESSMENT $297$ HFAC$231-1-$Jan$-$Jun$2024-$FA$2-$CP$-$V$2-05122023$ While the year$-$end stock take was performed, it was noted that CampMore $($Pty$)$ Ltd had $10$ gazebos on hand, which links to an older tent model. CampMore $($Pty$)$ Ltd no longer manufactures or sells this older tent model and in order to sell these $10$ gazebos they would need to be modified to fit the current tent model that CampMore $($Pty$)$ Ltd manufactures. These $10$ gazebos can be modified at a cost of R$1100$ per gazebo. CampMore $($Pty$)$ Ltd will then be able to sell these $10$ gazebos for R$3000$ each, while all other gazebos are sold for R$3500$ each. Additional information: CampMore $($Pty$)$ Ltd makes use of a periodic inventory recording system. CampMore $($Pty$)$ Ltd values raw materials, work in progress, and finished goods relating to the manufactured tents on a first$-$in$-$out basis $($FIFO$).$ There were no raw material spillages with the manufacturing process during the year. CampMore $($Pty$)$ Ltd values the gazebos on a weighted average costing basis $($WAC$).$

 

REQUIRED: 

$1\mathrm{.}1)$ Prepare an extract from the Statement of Profit or Loss and Other Comprehensive Income of CampMore $($Pty$)$ Ltd for the year ended $30$ June $2024$ to show the cost of sales relating to the Tent manufacturing only. Comparative figures are not required. $\mathrm{}$

$1\mathrm{.}2)$ Prepare an extract from the statement of financial position of CampMore $($Pty$)$ Ltd as at $30$ June $2024$ to ahow the Gazebos inventory only for the year ended $30$June $2024.$ Comparative figures are not required 

Answer rating: 100% (QA)

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