FINANCIAL ACCOUNTING

Question two Fresh Meats CC was registered on 1 August 2015. The founding statement of the CC sets out the following: i. Names of members, their interests and contributions: Name % interest Contribution N. Moeti 50% R260 B. Faith 50% R240 ii. The accounting date: 30 June. The following abbreviated trial balance of the close corporation was available on 30 June 2017: Debit Credit Members 500 00 Retained earnings 200 00 Mortgage bond 2000 00 Loan to B. Faith 60 00 Land and buildings 2 500 00 Bank 140 00 R2 700 00 R2 700 00 iii. With regard to the 2017/2018 financial year the following was available: N. Moeti transferred 20.00 % (nominal value R 52 000) of her contribution on 30 June 2018 to B. Faith. N. Moeti lent the CC R 40 000, repayable on 30 June 2019. On 31 March 2018, the land and buildings were re-valued at R3 000 000 All interest was paid and received promptly on 30 June. Retained earnings for the year ended 30 June 2018 amounted to R 300 000. The distribution of income is equal to 50.00 % of retained earnings at the end of the financial year. Required: 1. Calculate the change in members' % interest and members' funds at 30 June 2018. 2. Calculate the values of the members' net investment at 30 June 2018. (15 marks) (5 marks) Question two Fresh Meats CC was registered on 1 August 2015. The founding statement of the CC sets out the following: i. Names of members, their interests and contributions: Name % interest Contribution N. Moeti 50% R260 B. Faith 50% R240 ii. The accounting date: 30 June. The following abbreviated trial balance of the close corporation was available on 30 June 2017: Debit Credit Members 500 00 Retained earnings 200 00 Mortgage bond 2000 00 Loan to B. Faith 60 00 Land and buildings 2 500 00 Bank 140 00 R2 700 00 R2 700 00 iii. With regard to the 2017/2018 financial year the following was available: N. Moeti transferred 20.00 % (nominal value R 52 000) of her contribution on 30 June 2018 to B. Faith. N. Moeti lent the CC R 40 000, repayable on 30 June 2019. On 31 March 2018, the land and buildings were re-valued at R3 000 000 All interest was paid and received promptly on 30 June. Retained earnings for the year ended 30 June 2018 amounted to R 300 000. The distribution of income is equal to 50.00 % of retained earnings at the end of the financial year. Required: 1. Calculate the change in members' % interest and members' funds at 30 June 2018. 2. Calculate the values of the members' net investment at 30 June 2018. (15 marks)