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2.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 2 - 2024 - Paper 1
Question 2
2.1 Choose the correct word(s) from those given in brackets. Write only the word(s) next to the question numbers (2.1.1 to 2.1.3) in the ANSWER BOOK. 2.1.1 The curr... show full transcript
Worked Solution & Example Answer:2.1 Choose the correct word(s) from those given in brackets - NSC Accounting - Question 2 - 2024 - Paper 1
Step 1
Prepare the Retained Income Note for the financial year ended 29 February 2024.
Answer
The Retained Income Note outlines the changes in retained earnings for the financial year.
Balance at the beginning of the year:
- Starting with the retained earnings balance from the previous year: R2,819,000
Net profit after tax:
- Adding the net profit after tax: R4,550,000
Less:
- Buy back of shares: (R5,746,000)
- Interim dividend: (R3,408,000)
- Final dividend: (to be determined)
Calculation:
- Total = R2,819,000 + R4,550,000 - R5,746,000 - R3,408,000
- Final balance = R1,512,000
This reflects the company's retained earnings at the end of the year.
Step 2
Refer to the partially completed Cash Flow Statement provided. Calculate and/or provide the figures denoted by (i) to (v).
Answer
Referencing the given Cash Flow Statement:
(i) Interest paid: R966,000
(ii) Dividends paid: R5,728,000
(iii) Income tax paid: (R1,921,000)
(iv) Cash and cash equivalents on 1 March 2023: R1,030,000
(v) Cash and cash equivalents on 29 February 2024: (R3,219,000)
These calculations derive cash flow from operating and financing activities as specified.
Step 3
Calculate the following financial indicators for the financial year ended 29 February 2024: Acid-test ratio, Interim dividend per share (in cents), % return on average shareholders' equity (ROSH)
Answer
Acid-test ratio:
Calculated as:
ext{Acid-test ratio} = rac{(9,623,000 - 1,000,000)}{5,433,000} = 0.3
Interim dividend per share:
Total interim dividend: R3,408,000 / 450,000 shares = 240 cents
% Return on average shareholders' equity (ROSH):
ext{ROSH} = rac{4,550,000}{(2,248,000 + 25,729,000)} imes 100 = 16.9 ext{%}