Question 1: Multiple Choice Questions

This section consists of multiple-choice questions. The below case study indicates which of the answer options provided is the correct answer.

1. Surfers Ltd has current assets of R5 000, net non-current assets of R23 000, current liabilities of R4 300 and long-term debt of R12 000. What is the owners' equity account for this firm?

[1]

1. R16 300
2. R20 000
3. R11 700
4. R12 000

2. Kippers Manufacturing (Pty) Ltd has sales of R527 000, costs of R280 000, depreciation expense of R38 000, interest expense of R15 000 and a tax rate of 28 per cent. What is the net profit after tax for this firm? [1]

1. R139 680
2. R144 860
3. R165 200
4. R143 880

3. What if the firm in question 2 paid out R48 000 in cash dividends. What is the addition to retained profit?

1. R113 860
2. R89 200
3. R70 880
4. R91 680

[1]

4. Suppose the firm in question 3 had 30 000 shares in issue. What is the earnings per share (EPS) figure? What is the dividend per share figure? [2]

1. R4.66; R1.60
2. R4.83; R1.60
3. R5.51; R1.60
4. R4.80; R1.60

5. Langa Ltd purchased new machinery three years ago for R7 million. The machinery can be sold today for R3,3 million. Adonis's current statement of financial position shows net non-current assets of R4 million, current liabilities of R2.3 million and net working capital of R900 000. If all the current accounts were liquidated today, the company would receive R2,8 million cash.

What is the book value of Adonis's assets today? What is the market value? [2]

1. R4.9 million; R3.3 million
2. R7.2 million; R6.1 million
3. 4.9 million; R3.5 million
4. R5.5 million; R3.3 million

6. Tugela Water Works has sales of R13 500, costs of R5 400 depreciation expense of R1 200 and interest expense of R680. If the tax rate is 28 per cent and Tugela pays no dividends, what is the operating cash flow? [1]

1. R6 900.40
2. R6 218.50
3. R4 478.40
4. R6 358.40

7. The Kaplan Hammer Ltd's 31 December 2020 statement of financial position showed net non-current assets of R4.2 million, and the 31 December 2021 statement of financial position showed net non-current assets of R5,7 million. The company's 2021 income statement showed a depreciation expense of R925 000. What was Kaplans net capital spending for 2021? [1]

1. R3.525 million
2. R4.764 million
3. R2.425 million
4. R3.234 million

8. The following is the sales budget for Sikelela (Pvt) Ltd for the first quarter of 2021.

	January	February	March
Sales Budget	R150 000	R188 000	R220 000

Credit sales are collected as follows

• 65% in the month of the sale
• 20% in the month after the sale
• 15% in the second month after the sale

If the accounts receivable balance at the end of the first quarter was R57 000 (R41 000 of which were uncollected December sales).

1. Compute the sales for December [2]
2. Compute the cash collections from sales for each month from January through March.

[3]

Note: The first-quarter sales that were collected include 65%, of which 35% were not collected. Therefore, to determine the sales for December, the simple proportion is used.

1. i. R117 142,86 ii. R136 928,57; R169 771,43; R203 100,00
2. i. R106 666,67 ii. R117 142,86; R136 928,57; R176 747,89
3. i. R145 243,85 ii. R187 152,66; R176 768,67; R196 787,99
4. i. R134 254,66 ii. R169 771,43; R187 152,66; R203 100,00