Question
Amber and Johnny Deep are siblings who incorporated a catering and fast-food close corporation trading as Deep Fried Chicken CC in 2019.They both have an
Amber and Johnny Deep are siblings who incorporated a catering and fast-food close corporation trading as Deep Fried Chicken CC in 2019.They both have an equal interest in the business.
The Close Corporation was incorporated on the 1st of March 2019.
The following information pertains to the business activities for the CC for the year ended 28 February 2022.
Deep Fried Chicken CC |
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EXTRACT FROM TRIAL BALANCE AS AT 28 FEBRUARY 2022: |
|
| R |
Members contribution: Amber | 138 600.0 |
Members contribution: Johnny | 109 725.0 |
Land and buildings (at cost) | 862 785.0 |
Catering Equipment (at cost) | 150 000.0 |
Vehicles at cost (Purchased 31 August 2019) | 630 000.0 |
Loan from member: Amber | 108 339.0 |
Loan to member: Johnny | 81 427.5 |
Inventory (28 February 2021) | 114 705.4 |
Trade receivables control | 41 118.0 |
Trade payables control | 28 990.5 |
Bank (Dr) | 55 555.5 |
Petty cash | 3 234.0 |
Salaries cost per month (28 February 2021) | 90 000.0 |
Loan from Nugget Bank | 315 000.0 |
Investments (at cost) | 340 725.0 |
Allowance for settlement discount granted | 1 732.5 |
Retained earnings (1 March 2021) | 545 160.0 |
Interim profit distribution paid to members | 48 510.0 |
Accumulated depreciation: Vehicles | 107 668.8 |
Accumulated depreciation: Catering Equipment (01 March 2021) | 42 000.0 |
Stationery (28 February 2021) | 5 250.0 |
Income received in advance | 16 932.3 |
Prepaid expenses | 5 000.0 |
Allowance for credit losses | 5 775.0 |
Insurance premiums | 12 000.0 |
SARS (income tax) | 134 673.0 |
Sales | 800 100.0 |
Additional Information:
1. Revenue
The sales amount includes VAT.
2. Inventories
Purchases for the current year amounted to R441 000,00.
Delivery cost for the year amounted to R13 650.00
On the 28 February 2022 Inventory balance amounted to R131 250,00.
3. The allowance for credit losses must be adjusted to R15 000,00.
4. Stationery
Purchases for the current year amounted to R9 000,00.
Amber took stationery with a cost price of R3000 for personal use.
The closing balance for Stationery R2 100,00.
4. Depreciation
Vehicles: 10% per annum on diminishing method.
Residual value of R65 000,00 for the two vehicles, namely:
Toyota Hiluz - Purchased and brought into use 01 September 2018.
Nissan KP2008 Purchased and brought into use 31 June 2018.
On the 01st of March 2021 the Nissan was sold for R290 000,00 cash. Cost of the vehicle was R350 000,00.
Catering Equipment: 20% per annum on the straight-line method.,
Residual value Rnill.A new stove was purchased cash for R45 000, 00 on the 31st of December 2021. The stove is depreciated at 20% on the straight-line method with an estimated residual value of R10 000.There were no other purchases/disposals relating to assets in the current year.5. The CC employees are entitled to an annual salary increase of 1% above inflation rate at the beginning of December every year, the current years adjustment has not been recorded.6. Deep Fried took out insurance on the 01st of January 2022. The monthly premiums are R1 000,00. The annual payment for the insurance was made on the 5th of January.7. Loan from Nugget BankThe loan was granted on the 1st of June 2020 at an interest rate of 15% per annum payable on 28 February every year. The loan is unsecured and is repayable in bi-annually in 8 equal
Question 51
Question text
Which of the following alternative is the correct amount to be recorded as Prepaid expense in the financial statements for the year ended 28 February 20.22?
a.R 12 000,00
b.R 5 000,00
c.R 1 200,00
d.R 10 000,00
e.R 15 000,00
Question 52
Question text
Which of the following alternatives is the correct amount to be recorded as interest in the Statement of Profit/Loss for the year ended 28 February 20.22?
a.R 33 750,00
b.R 45 000,00
c.R 41 250,00
d.R 33 750,00
e.R 39 000,00
Question 53
Question text
Which of the following alternatives is the correct amount to be recorded as income tax in the Statement of Profit/Loss for the year ended 28 February 20.22?
a.R 88 273,00
b.R 72 465,00
c.R 128 260,00
d.R 55 795,00
e.R 210 761,25
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