Due to the high crime rate in South Africa, Thabo and Nandi have a close corporation trading as Best Security CC. The services provided by the CC include VIP protection, Community security services, Surveillance monitoring and Access control. The close corporation provides services within Gauteng in the Sandton Area. The financial period for the CC ends 28 February.

The following extract of balances as at 28 February 2023 from the accounting records of Bester CC is presented to you for assistance:

Loan to Nandi - 01 March 2020 25,000

Members contribution: Thabo 300,000

Members contribution: Nandi 275,000

Members contribution: Moses ??

Retained earnings (1 March 2022) 272,450

Trade debtors control 161,500

Trade creditors control 158,700

Loan from Thabo - 01 March 2022 120,500

Bank (favourable) 2,876,100

Long-term loan (Times Bank) 4,806,900

SARS (income tax) liability 120,300

Vehicles at cost 3,540,400

Accumulated depreciation: Vehicles (1 March 2022) 427,200

Furniture at cost 120,000

Accumulated depreciation: Furniture (1 March 2022) 26,800

Equipment at cost 1,700,600

Accumulated depreciation: Equipment (1 March 2022) 491,800

Inventory 314,800

Profit before tax (before taking into account the additional information) 3,259,800

Additional information

1. In the financial year ending 2022, Nandis father named Moses a professional within the security industry with over 25 years of experience was admitted to the CC in July 2022 to assist in managing and overseeing a new division. Moses contributed R70 000,00 cash, he further contributed a patrol vehicle to the valued at R150 000.

2. The loan from Thabo was advanced to the CC on the 1st of November 2021 and is repayable on 31 October 2023.

3. On 01 August 2022 the electronic Gun Safe (Equipment) got damaged by floods and was not reparable. This Safe was acquired on 30 June 2020 at a cost of R150 000.The carrying amount of the Safe on the day of the floods amounted to R95 000. Best CC received an insurance pay-out of R95 0000 on 15th September 2022.

4. Depreciation for the year ended 28 February 2023 was calculated as follows:

Vehicles: R123 000

Furniture: R12 000

Equipment: R78 000

5. Nandi experienced personal financial problems during the year and borrowed R30 000 from the close corporation. The loan was granted to Nandi on 31 May 2022 at an interest rate of 13% per annum. The interest on this loan is capitalised. This transaction is still to be recorded.

6. On 30 November 2022, a profit distribution of R47 000 was made to each member of the close corporation. These amounts should be regarded as loans from members with interest charged and capitalised at 15% per annum. This transaction is yet to be accounted for.

7. The Inventory amount relates to the pepper spray, surveillance camera and other protection gear sold to the public. The Net Realisable Value for the inventory amounted to R320 000,00 at year end.

8. The income tax assessment, received from SARS on 1 March 2023, indicated that the normal income tax for the 2022 financial year amounted to R278 000.

9. All amounts should be rounded off to the nearest Rand.

Use the information above to answer questions 1 to 13.

Question 1

Which one of the following alternatives represents the correct amount of members contributions from the new member Moses to be included in the statement of changes in net investments of members of Best CC for the year ended 28 February2023?

A. R 150 000

B. R 70 000

C. R 130 000

D. R 220 000

Question 2

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Assume the correct members contribution from Moses is R125 000. Which one of the following alternatives represents the correct total members contributions to be included in the statement of changes in net investments of members of Best CC for the year ended 28 February 2023?

A. R 700 000

B. R 795 000

C. R 575 000

D. R 645 000

Question 3

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Which one of the following alternatives represents the correct total comprehensive income for the year to be disclosed in the statement of changes in net investments of members of Best CC for the year ended 28 February 2023?

A. R 2 861 438

B. R 2 863 800

C. R 3 259 800

D. R 2 766 438

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Assume the correct total comprehensive income for the year is R2 750 000. Which one of the following alternatives represents the correct retained earnings to be disclosed in the statement of changes in net investments of members of Best CC for the year ended 28 February 2023?

A. R 3 022 450

B. R 2 881 450

C. R 2 992 888

D. R 272 450

Question 5

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Which one of the following alternatives represents the correct loans to members to be disclosed in the statement of changes in net investments of members of Best CC for the year ended 28 February 2023?

A. R 55 000

B. R 57 925

C. R 25 000

D. R 21 000

Question 6

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Which one of the following alternatives represents the correct loans from members to be disclosed in the statement of changes in net investments of members of Best CC for the year ended 28 February 2023?

A. R 266 788

B. R 120 500

C. R 261 500

D. R 269 500

Question 7

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Which one of the following alternatives represents the correct carrying amount for vehicles to be disclosed in the statement of financial position of Best CC at 28 February 2023?

A. R 2 658 200

B. R 3 113 200

C. R 2 990 200

D. R 3 578 400

Question 8

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Which one of the following alternatives represents the correct carrying amount for furniture to be disclosed in the statement of financial position of Best CC at 28 February 2023?

A. R 92 600

B. R 58 200

C. R 93 200

D. R 81 200

Question 9

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Which one of the following alternatives represents the correct carrying amount for equipment to be disclosed in the statement of financial position of Best CC at 28 February 2023?

A. R 980 800

B. R 1 058 800

C. R 1 130 800

D. R 1 185 800

Question 10

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Which one of the following alternatives represents the correct interest income to be disclosed in the statement of profit or loss and other comprehensive income of Best CC at 28 February 2023?

A. R 5 228

B. R 2 925

C. R 3 900

D. R 3 250

Question 11

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Which one of the following alternatives represents the correct interest expense to be disclosed in the statement of profit or loss and other comprehensive income of Best CC at 28 February 2023?

A. R 21 150

B. R 5 288

C. R 315

D. R 7 050

Question 12

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Which one of the following alternatives represents the correct inventory amount to be disclosed in the statement of financial position of Best CC at 28 February 2023?

A. R 301 420

B. R 320 000

C. R 319 400

D. R 314 800

Question 13

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Which one of the following alternatives represents the correct SARS (income tax) balance to be disclosed in the statement of financial position of Best CC at 28 February 2023?

A. R 493 300

B. R 278 000

C. R 120 300

D. R 398 300