The following information pertains to KPMJ Ltd and covers questions 11 – 21: KPMJ Ltd is a company incorporated in 2017 and has a 28 February financial year- end. The company’s accountant presented the following information to you as the accounting officer of the company: KPMJ LTD EXTRACT OF BALANCES AS AT 28 FEBRUARY 2022: Retained earnings (1 March 2021) Share capital: Ordinary shares (1 March 2021) Inventory (1 March 2021) Trade receivables control Petty cash R 200,900 600,900 34,700 244,200 5,900 Loan: PWA Bank SARS (income tax) (Dr) Land and buildings at revaluation Equipment at cost Accumulated depreciation: Equipment Revaluation surplus (1 March 2021) Income received in advance Allowance for credit losses Bank (Dr) Trade payables control Auditor's remuneration Sales Carriage on sales Settlement discount received Allowance for settlement discount granted Purchases Salaries and wages Carriage on purchases Directors’ remuneration Settlement discount granted Stationery Telephone Additional information: 102,600 24,500 963,900 501,900 72,000 85,000 6,900 5,200 111,900 189,300 36,100 1,163,730 2,000 1,700 6,300 234,800 229,900 1,400 174,000 7,200 10,500 5,100 1. The allowance for credit losses must be adjusted to R7 600. A debtor who owes the business R9 300 was declared insolvent and must be written off as irrecoverable. 2. The income tax for the financial year ended 28 February 2022 amounted to R121 100 and must still be recorded. 3. Authorised share capital is 400 000 NPV ordinary shares. Share capital stated above consists of ordinary shares issued at R3.5 per share. On 01 December 2021, the directors issued 57 000 shares at R4.8 per share, the shares were taken up by the public on 1 February 2022, this transaction has not been recorded. 4. The loan from PWA was acquired on 1 March 2018 at an interest rate of 8% per annum. Interest on all loans for the current financial year has not yet been accounted for. The loan is repayable in four annual equal instalments with effect from 1 March 2022. 5. Directors made the following resolutions at year end · Dividends declared at 80 cents per share and will paid at the end of April 2022 · A total bonus amounting to R82 500 must be paid to directors on 30 April 2022 · Only 30% of the auditors’ fees stated above was settled at the year end, with the remainder to be paid to the auditors during the second week of March 2022. The above transactions have not been recorded. 6. 7. · · Provision of R44 200 must still be made for depreciation on equipment. Inventory on 28 February 2022 consisted of the following: Inventory (stock) on hand R48 900 Stationary on hand R 8 300 8. amounting to R101 000. The revaluation of land for the current year resulted in a revaluation surplus Which alternative represents the correct amount for director’s remuneration in the statement of profit or loss and other comprehensive income of KPMJ Ltd for the year ended 28 February 2022? A. R 256,500 B. R 278 800 C. R 261,700 D. R 206,800 E. R 250,600

The following information pertains to KPMJ Ltd and covers questions 11 – 21: KPMJ Ltd is a company incorporated in 2017 and has a 28 February financial year- end. The company’s accountant presented the following information to you as the accounting officer of the company: KPMJ LTD EXTRACT OF BALANCES AS AT 28 FEBRUARY 2022: Retained earnings (1 March 2021) Share capital: Ordinary shares (1 March 2021) Inventory (1 March 2021) Trade receivables control Petty cash R 200,900 600,900 34,700 244,200 5,900 Loan: PWA Bank SARS (income tax) (Dr) Land and buildings at revaluation Equipment at cost Accumulated depreciation: Equipment Revaluation surplus (1 March 2021) Income received in advance Allowance for credit losses Bank (Dr) Trade payables control Auditor's remuneration Sales Carriage on sales Settlement discount received Allowance for settlement discount granted Purchases Salaries and wages Carriage on purchases Directors’ remuneration Settlement discount granted Stationery Telephone Additional information: 102,600 24,500 963,900 501,900 72,000 85,000 6,900 5,200 111,900 189,300 36,100 1,163,730 2,000 1,700 6,300 234,800 229,900 1,400 174,000 7,200 10,500 5,100 1. The allowance for credit losses must be adjusted to R7 600. A debtor who owes the business R9 300 was declared insolvent and must be written off as irrecoverable. 2. The income tax for the financial year ended 28 February 2022 amounted to R121 100 and must still be recorded. 3. Authorised share capital is 400 000 NPV ordinary shares. Share capital stated above consists of ordinary shares issued at R3.5 per share. On 01 December 2021, the directors issued 57 000 shares at R4.8 per share, the shares were taken up by the public on 1 February 2022, this transaction has not been recorded. 4. The loan from PWA was acquired on 1 March 2018 at an interest rate of 8% per annum. Interest on all loans for the current financial year has not yet been accounted for. The loan is repayable in four annual equal instalments with effect from 1 March 2022. 5. Directors made the following resolutions at year end · Dividends declared at 80 cents per share and will paid at the end of April 2022 · A total bonus amounting to R82 500 must be paid to directors on 30 April 2022 · Only 30% of the auditors’ fees stated above was settled at the year end, with the remainder to be paid to the auditors during the second week of March 2022. The above transactions have not been recorded. 6. 7. · · Provision of R44 200 must still be made for depreciation on equipment. Inventory on 28 February 2022 consisted of the following: Inventory (stock) on hand R48 900 Stationary on hand R 8 300 8. amounting to R101 000. The revaluation of land for the current year resulted in a revaluation surplus Which alternative represents the correct amount for director’s remuneration in the statement of profit or loss and other comprehensive income of KPMJ Ltd for the year ended 28 February 2022? A. R 256,500 B. R 278 800 C. R 261,700 D. R 206,800 E. R 250,600

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 19P: Anoka Company reported the following selected items in the shareholders equity section of its...

See similar textbooks