Jono and Karabo are in a partnership and own a restaurant trading as The Sitting Duck. They have an equal interest in the partnership and distribute profits accordingly.

The following information was extracted from the accounting records of the partnership as at 31 May 2023:

Additional information:

1. The closing inventory amounted to R92 300.

2. HBS Bank granted a loan to The Sitting Duck on 1 August 2022. The terms of the loan provide for interest on the loan to be charged at a rate of 11.5% per annum.

3. Mr Impofu was declared insolvent and management decided to write off his debt amounting to R1 350.

4. Rental income includes an amount in respect of June 2023. Rental income was earned evenly throughout the year.

5. Each partner receives a monthly salary of R25 000 paid in cash. Jono, the managing partner of The Sitting Duck, is entitled to a bonus of 10% of his yearly salary payable on 31 May 2023. These amounts were debited to the salaries and wages account as at 31 May 2023.

6. Karabo withdrew cash amounting to R15 000 in order to hire a car while he was on holiday in Cape Town during December 2022. Jono withdrew R7 150 to pay for a holiday flight to Durban on 1 March 2023. These amounts were recognized under other general expenses.

7. The allowance for credit losses must be increased to R5 600.

8. An invoice relating to water and electricity for May 2023 amounting to R3 250 was received on 03 June 2023.

9. Depreciation is provided for as follows:

• Vehicles: 20% per annum according to the diminishing balance method. A new vehicle with a cost of R450 000 and a residual value of R55 000 was purchased and brought into use on 1 January 2023.
• Equipment: 10% per annum according to the straight-line method. On the 1^st of May 2023, equipment with a cost price of R63 000 originally purchased on 01 June 2018, was sold for R39 500.

10. The partners of The Sitting Duck decided to take out additional insurance on 1 January 2023. The monthly premium is R2 500 payable in advance on the 1^st of every month. This has not yet been accounted for in the records of the entity.

Which one of the following alternatives represents the correct amount for other general expenses in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

Question 7

a.

R64 350

b.

R86 500

c.

R61 880

d.

R72 350

Question 8

Which one of the following alternatives represents the correct amount for rental income in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R17 600

b.

R19 500

c.

R18 000

d.

R22 300

Question 9

Which one of the following alternatives represents the correct amount for revenue in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R3 234 200

b.

R3 127 100

c.

R3 221 900

d.

R3 139 400

Question 10

Which one of the following alternatives represents the correct amount for purchases in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R1 050 100

b.

R1 069 700

c.

R968 700

d.

R1 096 100

Question 11

Assuming a purchases amount of R960 000, which one of the following alternatives represents the correct amount for cost of sales in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R873 450

b.

R776 000

c.

R964 200

d.

R939 500

Question 12

Which one of the following alternatives represents the correct treatment of an increase in allowance for credit losses in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

Added to credit losses

b.

Added to other general expenses

c.

Added to revenue

d.

Deducted from credit losses

Question 13

Which one of the following alternatives represents the correct amount for salaries and wages in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R408 000

b.

R378 000

c.

R728 000

d.

R678 000

Question 14

Which one of the following alternatives represents the correct treatment of carriage on purchases in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

Deducted from cost of sales amount

b.

Deducted from credit losses

c.

Added to other general expenses

d.

Added to the cost of sales amount

Question 15

Which one of the following alternatives represents the correct treatment of settlement discount given in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

Deducted from credit losses

b.

Deducted from revenue

c.

Added to revenue

d.

Added to cost of sales

Question 16

Which one of the following alternatives represents the correct amount for finance costs in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R7 200

b.

R9 108

c.

R7 590

d.

R6 300

Question 17

Which alternative represents the correct accounting treatment of settlement discount received in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

Deducted from revenue amount

b.

Deducted from purchases

c.

Added to other general expenses

d.

Added to credit losses

Question 18

Which one of the following alternatives represents the correct amount for credit losses in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R5 950

b.

R5 600

c.

R5 300

d.

R5 250

Question 19

Which one of the following alternatives represents the correct amount for water and electricity in the statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R65 200

b.

R62 500

c.

R58 800

d.

R65 750

Question 20

Which of the following alternatives represents the correct amount to be recorded as depreciation amount relating to the vehicles in the Statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R72 553

b.

R46 850

c.

R72 853

d.

R39 936

question 21

Which of the following alternatives represents the correct amount to be recorded as depreciation relating to the equipment in the Statement of profit or loss and other comprehensive income of The Sitting Duck for the year ended 31 May 2023?

a.

R53 035

b.

R68 450

c.

R54 385

d.

R53 560

EXTRACT OF BALANCES AS AT 31 May 2023 \begin{tabular}{|l|r|} \hline Allowance for credit losses & 3200 \\ \hline Rental income & 19500 \\ \hline Purchases & 1014700 \\ \hline Sales & 3234200 \\ \hline Carriage of purchases & 81400 \\ \hline Capital Jono & 156000 \\ \hline Capital: Karabo & 120500 \\ \hline Current Account Jono & 69200 \\ \hline Current Account Karabo & 72550 \\ \hline Sales returns & 94800 \\ \hline Credit losses & 2200 \\ \hline Settlement discount granted & 12300 \\ \hline Settlement discount recelved & 19600 \\ \hline Purchases returns & 26400 \\ \hline Vehicies Cost & 840000 \\ \hline Vehciles Accumulated depreciation (01 June 2022) & 190320 \\ \hline Equipment Cost (01 June 2022) & 535600 \\ \hline Equipment: Accumulated depreciation (01 June 2022) & 214240 \\ \hline Relained earnings (01 June 2022) & 392900 \\ \hline HBS Bank Loan & 79200 \\ \hline Water and electricity & 62500 \\ \hline Insurance & 14400 \\ \hline Inventory (O1 June 2022) & 71800 \\ \hline \end{tabular}