MTOMBENI LTD The information relates to Mtombeni Limited for the financial year ended 28 February 2017: REQUIRED: 4.2.1 Refer to Information A and B and calculate: - Carrying value of the vehicle sold on 30 November 2016 - Total depreciation on 28 February 2017 4.2.2 Prepare the Income Statement (Statement of Comprehensive Income) for the year ended 28 February 2017. - NSC Accounting - Question 4 - 2017 - Paper 1

To calculate the total depreciation for the financial year, we need to consider all assets that depreciate.

1. Remaining vehicles:

   • Calculate depreciation on the remaining vehicles (R138,000 for the remaining vehicles):

   $ext{Depreciation} = R138,000 imes ext{Depreciation Rate (20 ext{p.a.})} = R27,600$

2. Equipment depreciation:

   • For equipment purchased at R32,000 on 1 September 2016, with a depreciation rate of 10% on the diminishing-balance method:
   • Accumulated depreciation:

   Calculation till 28 February 2017 (for 6 months):

   ext{Depreciation} = R32,000 imes 10 ext{%} imes rac{6}{12} = R1,600

Total Depreciation for the year:

• Combine the depreciation of vehicles and equipment:

$ext{Total Depreciation} = R27,600 + R1,600 = R29,200$

To prepare the Income Statement, list the components as follows:

Income Statement for the year ended 28 February 2017

1. Sales: R5,482,500

2. Cost of Sales: R3,159,375

3. Gross Profit:

   $ext{Gross Profit} = ext{Sales} - ext{Cost of Sales} = R5,482,500 - R3,159,375 = R2,323,125$

4. Other Operating Income: R198,950

5. Total Gross Operating Income:

   $ext{Total Gross Operating Income} = ext{Gross Profit} + ext{Other Operating Income} = R2,323,125 + R198,950 = R2,522,075$

6. Operating Expenses:

   (Calculate total operating expenses)

   $= R1,356,075$

7. Operating Profit:

   $ext{Operating Profit} = ext{Total Gross Operating Income} - ext{Operating Expenses} = R2,522,075 - R1,356,075 = R1,166,000$

8. Interest Income: R300,000

9. Net Profit before Tax:

   $ext{Net Profit before Tax} = ext{Operating Profit} + ext{Interest Income} = R1,166,000 + R300,000 = R1,466,000$

10. Income Tax Expense: R336,000

11. Net Profit after Tax:

$ext{Net Profit after Tax} = ext{Net Profit before Tax} - ext{Income Tax Expense} = R1,466,000 - R336,000 = R1,130,000$

Thus, the final Income Statement shows a Net Profit after Tax of R1,130,000.