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 EXTRACTS OF TRIAL BALANCE AS AT 28 FEBRUARY 2022 R Members contribution: Amber 138 600.00 Members contribution: Johnny 109 725.00 Land and buildings (at cost) 862 785.00 Equipment (at cost) (28 February 2021) 145 200.00 Delivery scooters at cost 150 000.00 Vehicles at cost (28 February 2021) 660 000.00 Loan from member: Amber 108 339.00 Loan to member: Johnny 81 427.50 Inventory (28 February 2021) 114 705.36 Trade receivables control 41 118.00 Trade payables control 28 990.50 Bank (Dr) 55 555.50 Petty cash 3 234.00 Salaries cost per month (28 February 2021) 55 000.00 Loan from Nugget Bank 315 000.00 Investments (at cost) 340 725.00 Allowance for settlement discount granted 1 732.50 Retained earnings (1 March 2021) 545 160.00 Interim profit distribution paid to members 48 510.00 Accumulated depreciation: Vehicles (28 February 20.21) 107 668.75 Accumulated depreciation: Delivery scooters 80 000.00 Accumulated depreciation: Catering Equipment (01 March 2021) 42 000.00 Stationery (28 February 2021) 5 250.00 Income received in advance 16 932.30 Prepaid expenses 5 000.00 Allowance for credit losses 5 775.00 SARS (income tax) 134 673.00 Sales 800 100.00 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. Depreciations: Vehicles: 10% on the diminishing method. Residual value of R40 000,00. The were no additions to the Vehicles in the current year. Catering Equipment: 20% on the straight-line method. Residual value R30 000,00 on all the equipment. A new Equipment was purchased on the 01 May 2021 for R225 000,00 cash. All other catering equipment was purchased on the 1st March 2019 when the business was incorporated. Delivery scooters: On the 28th of February 2022 Deep Fried disposed of all the delivery scooters purchased on the 01st April 20.19 at a cost of R150 000,00. The proceeds from the sale amounted was R92 000 There were no other purchases/disposals relating to assets in the current year. 5. The monthly salary cost for old employees is R55 000. The business hired three new employees earning R6 000 each per month from 01 August 2020. 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. The total payment of R12 000,00 for the current years premium was not recorded in the books of Deep Fried. 7. Loan from Nugget Bank The 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 instalments from 1 December 2022. 8. The income tax for the year R76 088.25 must still be provided for.

Which of the following alternative is the correct amount to be recorded as Insurance expense in the Statement of Profit/Loss for the for the year ended 28 February 20.22?

a.

R 600,00

b.

R 1 000,00

c.

R 2 000,00

d.

R 12 000,00

e.

R 500,00