Mbalis Catering received a statement from their landlord as at 31 December 2022, the financial year end, showing an overpayment of rent by 2 months. Mbalis Catering started renting these premises on 1 August 2022 and pays a rental amount of R4 500 every month. In addition to this, Mbalis Catering entered into a new insurance contract for its catering equipment on 1 December 2022 with an annual insurance amount of R14 000 payable in advance. What is the prepayment amount that must be shown in the statement of financial position of Mbalis Catering for the year ending 31 December 2022? 1. R12 833 2. R17 333 3. R21 833 4. R21 933

For the year ending 31 December 2022, Hilton Mathonzi Traders had a trade and other payables balance of R16 250. Mr Mathonzi, the owner, realized just before finalising his financial statements, that interest on the long-term loan of R120 000 obtained from Gaza Bank on 1 September 2022 had not been accounted for. Interest is payable biannually at a rate of 12.5%. The water and electricity account for December 2022 of R369 had also not been settled. What is the trade and other payables amount that must be shown in the statement of financial position of Hilton Mathonzi Traders for the year ending 31 December 2022?

1.

R21 619

2.

R22 000

3.

R19 250

4.

R19 790

Given information relates to questions 18 24:

The following information relates Techno Traders, a partnership established on 1 January 2022 by S Robert and Z Xaba:

1. Balances as at 31 December 2022:

TECHNO TRADERS
Extract OF BALANCES AS AT 31 December 2022
Trade receivables control	R18,250
Inventory (1 January 2022)	R8,000
Current Account: S Robert	R8,000
Current Account: Z Xaba	R12,000
Petty Cash	R300
Long-term loan (Ngabantu Bank)	R76,000
Trade payables control	R3,080
Purchases	R628
Capital: S Robert (1 January 2022)	R33,000
Capital: Z Xaba (1 January 2022)	R22,000
Equipment at cost	R73,450
Accumulated depreciation: Equipment	R9,018
Bank (Dr)	R220,000
Depreciation	R9,018
Water and electricity	R14,850
Salaries and wages	R204,250
Maintenance expense	R2,520
Entertainment expense	R6,000
Insurance expenses	R17,800
Commission expense	R2,800

2. Additional information:

2.1 Partnership agreement:

2.1.1 The partners share profit and losses in the ratio of their respective capital contributions.

2.1.2 Interest at 6% per annum is to be allowed on the opening balances of the capital account.

2.2 Year-end adjustments:

2.2.1 At 31 December 2022, the value of closing inventory amounted to R3 220.

2.2.2 S Robert and Z Xaba received R1 800 and R1 200 from Techno Traders respectively of which Z Xaba used R700 to entertain potential clients for the business.

2.2.3 In order for Techno Traders to finance the purchase of a drone, a long-term loan was acquired from Ngabantu Bank 01 October 2022. Interest is charged at a rate of 11.5% per annum. The drone was purchased on 01 November 2022 for R70 000 and is depreciated at 15% per annum using the straight-line method. The drone has a residual value of R25 000.

2.2.4 On 15 December 2022, a stock take was conducted and Inventory to the value of R1 500 was discovered as being damaged. The net realisable value for this damaged inventory was estimated at R700. In order to replace the damaged stock, Techno Traders purchased additional stock of R900, which was delivered to the premises on 29 December 2022, and made payment to the supplier on 31 December 2022. This transaction has not yet been recorded in the accounting records of Techno Traders as at 31 December 2022.

2.2.5 Both partners are entitled to a salary of R8 000 per month. Due to cash flow constraints affecting Techno Traders, S Robert agreed to accept a salary payment of R5 000 per month. The salaries paid to the partners were incorrectly included under salaries and wages.

Question 18

Which one of the following alternatives represents the correct amount that must be disclosed as finance costs in the statement of profit or loss and other comprehensive income of Techno Traders for the year ended 31 December 2022?

1.

R2 185

2.

R2 000

3.

R2 090

4.

R2 180

Which one of the following alternatives represents the correct amount that must be disclosed as cash and cash equivalents or bank overdraft in the statement of financial position of Techno Traders for the year ended 31 December 2022?

1.

R73 000

2.

R62 300 (Bank overdraft)

3.

R28 000

4.

R219 400

Which one of the following alternatives represents the correct amount that must be disclosed as cost of sales in the statement of profit or loss and other comprehensive income of Techno Traders for the year ended 31 December 2022?

1.

R4 608

2.

R7 928

3.

R9 328

4.

R7 200

The partners share of total comprehensive income of Techno Traders, after all required adjustments have been made, amounted to R320 000. Which one of the following alternatives represents the correct amount that must be disclosed as the total current account balance in the statement of changes in equity of Techno Traders for the year ended 31 December 2022?

1.

R214 300

2.

R181 600

3.

R217 100

4.

R381 600

Which one of the following alternatives represents the capital contribution ratio of S Robert and Z Xaba of Techno Traders respectively?

1.

1:5

2.

2:3

3.

3:2

4.

2:5

Which one of the following alternatives represents the entertainment expense that must be disclosed in the statement of profit or loss and other comprehensive income of Techno Traders for the year ended 31 December 2022?

1.

R7 000

2.

R6 000

3.

R6 700

4.

R8 000

Which one of the following alternatives represents the depreciation expense that must be disclosed in the statement of profit or loss and other comprehensive income of Techno Traders for the year ended 31 December 2022?

1.

R15 767.50

2.

R10 143

3.

R9 018

4.

R11 080