Lehlabile CC The following information pertains to Lehlabile CC and covers questions 14 26: Katlego and Tshepo are the only members of Lehlabile CC. The CCs financial year-end is 28 February. The following was presented to you as the accounting officer by the accountant. Extract of Balances as at 28 February 2023 Lehlabile CC R Extract of Balances as at 28 February 2023 Members contribution: Katlego 286 000 Members contribution: Tshepo 422 500 Retained earnings (1 March 2022) 325 000 Other reserves 159 900 Loan from member:Tshepo 136 500 Loan to member:Katlego 97 500 Land and buildings at cost 975 000 Equipment at cost 321 750 Accumulated depreciation:Equipment 121 524 Investments in Green Ltd (01 March 2022) 178 100 Inventory (01 March 2022) 71 500 Debtors control 133 594.5 Creditors control 61 412 Bank(dr) 48 100 Petty Cash 1 365 Mortgage 301 600 Allowance for settlement discount granted 1 950 Interim profit distribution paid to members 54 600 Income received in advance 6 864 Prepaid expenses 13 260 Allowance for credit losses 6 500 SARS(Dr) 72 280 Profit for the year before tax 137 300 Additional Information 1. Depreciation: The land was revalued to R1 000 000 on 28 February 2023. It is the policy of the close corporation not to depreciate land and buildings. Equipment is depreciated at 20% per annum on the Diminishing balancing method, no residual value. The depreciation amount for 2023 was correctly calculated as R42 675. Vehicles are depreciated on 10% per annum on the straight-line method with a residual value of 12% on cost of the asset. A new delivery vehicle with a cost of R250 000 was purchased and brought into use on 1 November 2022.The transaction was not recorded by the accountant. There were no disposals of, or additions to the land and buildings and equipment during the year. 2. The closing inventory amounted to R92 000 and is valued at the lower of cost or net realisable value according to the weighted average method. 3. Mr Fourie a debtor who owes the business R3 500 was declared insolvent, and his debt must be written off as irrecoverable. 4. An adjustment to the allowance for credit losses must be made to R4200. 5. On 20 February 2023 a trade debtor who owes R4 000 was offered a 4% settlement discount, on condition that she settles her account before 15 March 2023. The debtor informed Lehlabile that she intends to take the discount offer This offering must still be provided for. 6. The income tax assessment received from SARS on 15 March 2023, indicated that the actual normal income tax for the 2023 financial year amounted to R143 456. 7. Lehlabile holds an investment in Green Ltd which consists of 40 000 ordinary shares bought for R120 000. The shares were acquired in 2021 from Green Ltd, the investment was acquired for trade purposes. On 20 February 2023, Green Ltd declared a dividend of 70 cents per share, payable on 10 March 2023. On 28 February 2023, the fair value of the investment amounted to R195 000.The transaction was not accounted for in the books of Lehlabile. 8. A further profit distribution to the members of R30 000 payable on the 5th March 2023 still needs to be accounted for. 9. The loan from Tshepo is interest free and unsecured. The loan is repayable in 4 equal instalments, the first instalment is due 31 December 2023. 10. On the 19th February 2023 Lehlabile purchased stationery from Burgandy Ltd for R3 240 on credit. Lehlabile was offered a discount of 5% on the transaction provided they settle the outstanding amount within 25 days. Lehlabile made a payment on the 28 February 2023, the payment transaction was not recorded. 11. The mortgage was acquired from Tyla Bank on 1 March 2020 at an interest rate of 16,5% per annum. The loan is repayable in 6 equal instalments from 1 January 2025. Round off all amounts to the nearest rand. QUESTION 14 Which alternative represents the correct amount for carrying amount of land and buildings in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R1 000 000 B. R750 000 C. R975 000 D. R25 000 Question 15 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for carrying amount of equipment in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R321 750 B. R242 901 C. R200 226 D. R157 551 Question 16 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for Carrying amount of delivery vehicle in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R250 000 B. R242 667 C. R228 000 D. R198 000 Question 17 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for inventories in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R70 000 B. R72 500 C. R71 500 D. R92 000 Question 18 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for trade and other receivables that includes dividends receivable in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R153 735 B. R133 595 C. R129 395 D. R125 735 Question 19 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for cash and cash equivalents in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R41 800 B. R49 465 C. R46 735 D. R44 560 Question 20 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for Members contribution in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R286 000 B. R422 500 C. R420 000 D. R708 500 Question 21 Not yet answered Marked out of 1.00 Flag question Question text Assume the correct profit for the year amount is R137 300. Which alternative represents the correct amount for retained earnings in the statement of financial position of Lehlabile CC as at 28 February 2023 A. R325 000 B. R262 244 C. R251 144 D. R281 144 Question 22 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for other components of equity in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R159 900 B. R25 000 C. R184 900 D. R134 900 Question 23 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for long-term loan to be disclosed under non-current liabilities in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R301 600 B. R403 975 C. R136 500 D. R438 100 Question 24 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for trade and other payables in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R68 114 B. R61 412 C. R68 276 D. R61 250 Question 25 Not yet answered Marked out of 1.00 Flag question Question text Assume income tax expense of R140 000.Which alternative represents the correct amount for current tax payable in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R140 000 B. R84 391 C. R195 600 D. R55 600 Question 26 Not yet answered Marked out of 1.00 Flag question Question text Which alternative represents the correct amount for long-term borrowings to be disclosed under current liabilities in the statement of financial position of Lehlabile CC as at 28 February 2023? A. R50 267 B. R34 125 C. R84 392 D. R301 600 Question 27 Not yet answered Marked out of 1.00 Flag question Question text Given information for questions 27 29: On 01 April 2020, Khwezi Beauty was incorporated. The authorised share structure is as follows: 750 000 Ordinary Shares 300 000 10% Preference Shares Khwezi Beauty Ltd has a financial year end of 31 March. The following information relates to the year ended 31 March 2023: Issued share capital 350 000 ordinary shares valued at R350 000 were issued to the incorporators on the 01 April 2020. The whole offering was taken up and paid for by the incorporators. The shares had a fair value of R2,50 on the 31 March 2023. On the 15 August 2022 150 000 ordinary shares were issued at R2 per share. The shares issued were underwritten at a commission of 2,5% which was paid on the date of issue. A total of 150 000 applications were received for these shares. Application and allotment of the 150 000 was received for the shares was done. The commission was paid on the 25 August. On 30 November 2022 the company offered 50 000 shares at a consideration of R110 000 and 150 000 10% preference shares to the public at R5 per share for subscription to the public. Application for 60 000 ordinary shares and 150 000 preference shares were received by the 5 December 2022.On the same date the shares were allotted, and unsuccessful applicants were repaid. The board of Khwezi Ltd decided on 28 February 2023, to issue capitalisation shares to ordinary shareholders at a ratio of 1 share for every 5 ordinary shares held at a fair value consideration of R3,20 per share. The preference shareholders were paid a cash dividend at the end of the year. The company had sufficient cash and retained earnings to pay the dividends to ordinary and preference shareholders. Question 27 Which one of the following alternatives represents the correct number of ordinary shares issued by Kwezi Beauty Ltd during the current financial year ended 31 March 2023? A. 350 000 B. 550 000 C. 400 000 D. 210 000 E. 450 000 Question 28 Not yet answered Marked out of 1.00 Flag question Question text Which one of the following alternatives represents the correct amount of commission paid to the underwriter for the issue of ordinary shares on 15 August 2023? A. R 2 250 B. R 6 000 C. R 7 500 D. R 3 000 E. R 5 250 Question 29 Not yet answered Marked out of 1.00 Flag question Question text Assume that the correct number of capitalisation shares is 125 000. Which one of the following alternatives represents the correct value of the capitalisation share issue to ordinary shareholders of Khwezi Beauty Ltd? A. R 39 062 B. R 192 500 C. R 192 000 D. R 400 000 E. R 125 000 Question 30 Not yet answered Marked out of 1.00 Flag question Question text Use the following information to answer question 30 On 1 June 2022 Relebogile Limited issued 12 000 15% debentures of R150 each at R175. The debentures are repayable at nominal value on or before 31 May 2026 and interest is payable annually on 31 May of every year. A mortgage on land and buildings serve as security for the debentures. Relebogile Ltd amortises the premium on debentures over the term of the debenture issue according to the straight-line method. Relebogile Limiteds year-end is 31 December. Question 30 Which one of the following alternatives represents the correct amount to be recognised as premium/discount in the financial statements of Relebogile Ltd for the year ended 31 December 2022? A. R300 000 Discount B. R300 000 Premium C. R270 000 Premium D. R270 000 Discount E. R315 000 Premium