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Extract of the pre-adjustment trial balance of Seascapes as at 31 August 2022 DR CR Land ? Bank 457 000 Stationery asset 16 200 Insurance

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Extract of the pre-adjustment trial balance of Seascapes as at 31 August 2022 DR CR Land ? Bank 457 000 Stationery asset 16 200 Insurance expense ? Inventory 320 000 Additional information 1. All reversals were processed on 1 September 2021. 2. The land was purchased on 1 September 2021. The terms of the agreement indicated that transfer of the land occurs on 1 September 2021 and that a total amount of R1 250 000 is payable on 31 August 2022. This is beyond normal credit terms. 3. Seascapes' total insurance requirements are covered by two insurance policies. To ensure a lower monthly rate Seascapes pays policy B annually in advance. All insurance payments are debited to the insurance expense account. Policy A is paid monthly in advance on the first day of the month. The policy has an inflation clause that increases the monthly payment by 7% per annum from 1 January each year. The January 2022 monthly payment amounted to R1 284. Policy B has a payment date of 1 April each year. The 1 April 2021 annual payment amounted to R19 020 and the 1 April 2022 annual payment amounted to R21 420. 4. All purchases of stationery are made on credit, and are debited to the stationery asset account Stationery on hand on 1 September 2021 had a total cost of R7 300, and on 31 August 2022, a total cost of R4 250 You are required to: 1. Calculate the amount at which Seascapes recognises the land. Justify your answer. (4 marks) 2. Prepare the insurance expense account in the general ledger of Seascapes for the year ended 31 August 2022. You are not expected to show individual monthly bank transactions but you should show separate bank entries for each policy. (7 marks) 3. Prepare the stationery asset account in the general ledger of Sea Scapes for the year ended 31 August 2022. Ignore dates (5 marks) 4. Prepare the current assets section of the statement of financial position of Seascapes for the year ended 31 August 2022. No heading for the statement is required

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