PART A Patrick Cherry owns a furniture business, Atlanta Here We Come, operating in Cala. The business only purchases and sells top quality furniture made from rare wood harvested from plantations in Mthatha. The business has a year-end of 30 September. Patrick has managed to source high quality furniture from a business, Tsomo Green, operating in Mqanduli. As his business is growing rapidly, he currently places a new order on almost a monthly basis. On 30 June 2011, Atlanta Here We Come placed an order for 120 beds (at R2 000 each) and 120 table and chair combos (at R1 000 per set). This order was placed at the request of one of Atlanta Here We Come's major clients namely UNITRA. These items were requested by UNITRA in order to rehabilitate one of their residences. Tsomo Green requires that a 60% deposit is paid on order; no production or shipping of the furniture will start if the deposit is not paid. Atlanta Here We Come paid the deposit (on the day of the order) via the Internet and emailed a confirmation to Tsomo Green on the same day. Tsomo Green also received a SMS notification directly from their bank. Tsomo Green supplies furni- ture FOB destination point. The furniture is always loaded on to a truck in Mqanduli and leaves as soon as all the items have been manufactured. The cost of the items to Tsomo Green amounted to R150 000. On 2 August 2011, the order placed on 30 June 2011 was completed and loaded onto the truck in Mqanduli and left on the same day. The goods arrived in Cala the following day (3 August 2011). Atlanta Here We Come has negotiated that they only pay 7 days after delivery, as this allows the business to check the furniture for any defects before final payment. As there were no defects, Atlanta Here We Come paid the outstanding amount via the Internet on 10 August 2011 and emailed a confirmation of the payment on the same day. YOU ARE REQUIRED TO: 1. Prepare any general journal entries that Atlanta Here We Come would process on the following dates. If no journal entry is required on a particular date, clearly indicate "no entry required" and give a very short explanation. Dates AND narrations are required. 1.1 30 June 2011 1.2 1.3 3 August 2011 1.4 10 August 2011. 2 August 2011 (10 marks) 2. Prepare any general journal entries that Tsomo Green would process on the following dates. If no journal entry is required, clearly indicate "no entry required" and give a short explanation. Dates AND narrations are required. 2.1 3 August 2011. (3 marks) 3. Indicate the date on which Atlanta Here We Come will recognise the tables and chairs as an asset. Explain, with reference to definition and recognition criteria in thech the IFRS framework, why the tables and chairs would be recognised as an asset on this date. (7 marks) 4. Indicate the date on which Tsomo Green will recognise sales income with respect to the tables and chairs. Explain in full, with reference to the IFRS framework, why they income is recognised on this date. You are not expected to provide full asset/liability definitions in your answer. DADT D (2 marks) E madenl