Question 2 [25 Marks] Cavema Limited is a retailer listed on the Namibian Stock Exchange. The...

  

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Question 2 [25 Marks] Cavema Limited is a retailer listed on the Namibian Stock Exchange. The following information has been given to you: 1. The authorised share capital comprises 10 000 000 ordinary shares of no-par value, 1 000 000 shares were issued at N$1 on 30 November 2014. At 25 February 2015 there are 3 000 000 shares in issue. 2. The land and buildings are used for the supply of goods for administration purposes. The land and buildings were revalued on 28 February 2015 to a fair value of N$6 720 000 This represented an increase of N$228 572 on the previous carrying amount. Assume a normal tax rate of 30%. This has already been processed 3. Rental income from excess office space of N$75 000 has not been accounted for 4. The building is 320 square metres in area, of which 140 square metres is used as the company head office. 5. The equipment consists of items used in the despatch area and office equipment. The office equipment accounts for 60% of the depreciation of the equipment and the balance relates to depreciation of the equipment used in the despatch area. 6. N$570 000 of the salaries and wages relates to the employees hired in the dispatch area and N$642 000 relates to employees in the head office 7. Postage and packaging relate to the dispatch area 8. Telephone of N$27000 was incurred during the year. Of this N$15000 was incurred in the dispatch department and NS12 000 was incurred in the head office 9. Inventory with a cost of N$78 000 was estimated to have a net realisable value of 555 000. This has not yet been taken into account in the trial balance. The amount is considered to be material 10. Electricity of NS52 000 was incurred during the year. The amount allocated to the dispatch department is three times that allocated to the head office 11. Dividends of N$100 000 were declared on 18 March 2014 in respect of the year ended 28 February 2014. Dividends of N$150 000 were declared on 15 March 2015 in respect of the year ended 28 February 2015 12. The income tax expense for the year ended 28 February 2015 is N$346 080. This expense has not yet been recorded. The trial balance of the company at 28 February 2015 is shown below: Cavema Limited Trial balance as at 28 February 2015 Ordinary share capital Revaluation surplus Retained earnings Dividends Land-cost Buildings-cost Buildings accumulated depreciation Equipment-cost Equipment-accumulated depreciation Long term borrowings Accounts receivable Inventory Bank Accounts navati Debit N$ 100,000.00 140,000.00 8,000,000.00 500,000.00 262.000.00 258,000.00 131,000.00 Credit NS 4,000,000.00 160 000 00 451,000.00 1,280,000.00 200,000.00 1,100,000.00 14100m Il MTC-Stay Hom... 3G 4:41 AM X Financial Accounting... 9. Inventory with a cost of N$78 000 was estimated to have a net realisable value of N$55 000. This has not yet been taken into account in the trial balance. The amount is considered to be material 10. Electricity of N$52 000 was incurred during the year. The amount allocated to the dispatch department is three times that allocated to the head office 11. Dividends of N$100 000 were declared on 18 March 2014 in respect of the year ended 28 February 2014. Dividends of N$150 000 were declared on 15 March 2015 in respect of the year ended 28 February 2015. 12. The income tax expense for the year ended 28 February 2015 is NS346 080. This expense has not yet been recorded. The trial balance of the company at 28 February 2015 is shown below: Cavema Limited Trial balance as at 28 February 2015 Ordinary share capital Revaluation surplus Retained earnings Dividends Land-cost Buildings-cost Bulidings-accumulated depreciation Equipment-cost Equipment-accumulated depreciation Long term borrowings Accounts receivable Inventory Bank Accounts payable Sales Cost of sales Depreciation-buildings Depreciation equipment Salaries and wages Postage and marketing of pamphlets Packaging Telephone Electricity Finance costs 10% redeemable preference shares (redeemable 1 March 2017) Debit N$ 100,000.00 140,000.00 8.000.000.00 500,000.00 262,000.00 258,000.00 131,000.00 7,500,000.00 160,000.00 100,000.00 1,212,000.00 20.000.00 30,000.00 27,000.00 52,000.00 140,000.00 18,632,000.00 Credit NS 4,000,000.00 160,000,00 451,000.00 1,280,00000 200 000 00 1,100,000 00 141,000.00 10,500,000.00 68% 800.000.00 18,632,000.00 Requir a) Prepare the statement of comprehensive income of Cavema Limited for the year ended 28 February 2015 in conformity with the international Financial Reporting standards and using the function method. (25 Marka) Question 2 [25 Marks] Cavema Limited is a retailer listed on the Namibian Stock Exchange. The following information has been given to you: 1. The authorised share capital comprises 10 000 000 ordinary shares of no-par value, 1 000 000 shares were issued at N$1 on 30 November 2014. At 25 February 2015 there are 3 000 000 shares in issue. 2. The land and buildings are used for the supply of goods for administration purposes. The land and buildings were revalued on 28 February 2015 to a fair value of N$6 720 000 This represented an increase of N$228 572 on the previous carrying amount. Assume a normal tax rate of 30%. This has already been processed 3. Rental income from excess office space of N$75 000 has not been accounted for 4. The building is 320 square metres in area, of which 140 square metres is used as the company head office. 5. The equipment consists of items used in the despatch area and office equipment. The office equipment accounts for 60% of the depreciation of the equipment and the balance relates to depreciation of the equipment used in the despatch area. 6. N$570 000 of the salaries and wages relates to the employees hired in the dispatch area and N$642 000 relates to employees in the head office 7. Postage and packaging relate to the dispatch area 8. Telephone of N$27000 was incurred during the year. Of this N$15000 was incurred in the dispatch department and NS12 000 was incurred in the head office 9. Inventory with a cost of N$78 000 was estimated to have a net realisable value of 555 000. This has not yet been taken into account in the trial balance. The amount is considered to be material 10. Electricity of NS52 000 was incurred during the year. The amount allocated to the dispatch department is three times that allocated to the head office 11. Dividends of N$100 000 were declared on 18 March 2014 in respect of the year ended 28 February 2014. Dividends of N$150 000 were declared on 15 March 2015 in respect of the year ended 28 February 2015 12. The income tax expense for the year ended 28 February 2015 is N$346 080. This expense has not yet been recorded. The trial balance of the company at 28 February 2015 is shown below: Cavema Limited Trial balance as at 28 February 2015 Ordinary share capital Revaluation surplus Retained earnings Dividends Land-cost Buildings-cost Buildings accumulated depreciation Equipment-cost Equipment-accumulated depreciation Long term borrowings Accounts receivable Inventory Bank Accounts navati Debit N$ 100,000.00 140,000.00 8,000,000.00 500,000.00 262.000.00 258,000.00 131,000.00 Credit NS 4,000,000.00 160 000 00 451,000.00 1,280,000.00 200,000.00 1,100,000.00 14100m Il MTC-Stay Hom... 3G 4:41 AM X Financial Accounting... 9. Inventory with a cost of N$78 000 was estimated to have a net realisable value of N$55 000. This has not yet been taken into account in the trial balance. The amount is considered to be material 10. Electricity of N$52 000 was incurred during the year. The amount allocated to the dispatch department is three times that allocated to the head office 11. Dividends of N$100 000 were declared on 18 March 2014 in respect of the year ended 28 February 2014. Dividends of N$150 000 were declared on 15 March 2015 in respect of the year ended 28 February 2015. 12. The income tax expense for the year ended 28 February 2015 is NS346 080. This expense has not yet been recorded. The trial balance of the company at 28 February 2015 is shown below: Cavema Limited Trial balance as at 28 February 2015 Ordinary share capital Revaluation surplus Retained earnings Dividends Land-cost Buildings-cost Bulidings-accumulated depreciation Equipment-cost Equipment-accumulated depreciation Long term borrowings Accounts receivable Inventory Bank Accounts payable Sales Cost of sales Depreciation-buildings Depreciation equipment Salaries and wages Postage and marketing of pamphlets Packaging Telephone Electricity Finance costs 10% redeemable preference shares (redeemable 1 March 2017) Debit N$ 100,000.00 140,000.00 8.000.000.00 500,000.00 262,000.00 258,000.00 131,000.00 7,500,000.00 160,000.00 100,000.00 1,212,000.00 20.000.00 30,000.00 27,000.00 52,000.00 140,000.00 18,632,000.00 Credit NS 4,000,000.00 160,000,00 451,000.00 1,280,00000 200 000 00 1,100,000 00 141,000.00 10,500,000.00 68% 800.000.00 18,632,000.00 Requir a) Prepare the statement of comprehensive income of Cavema Limited for the year ended 28 February 2015 in conformity with the international Financial Reporting standards and using the function method. (25 Marka)

Answer rating: 100% (QA)

rs STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDING 28 FEBRUARY 2015 Note Dispatch Head Offic... View the full answer