Question
Pogacar and Carapaz are the only members of PogacarCarapaz CC. They have an equal interest in the corporation and distribute profits accordingly. The following information
Pogacar and Carapaz are the only members of PogacarCarapaz CC. They have an equal interest in the corporation and distribute profits accordingly. The following information is extracted from the accounting records of the CC as at 31 March 2020, the financial year-end of the corporation
Additional information:
An invoice relating to carriage on purchases amounting to R8 800 was received on 30 March 2020 and must still be taken into account.
The closing inventory amounted to R79 800.
The investment in Nibali Ltd consist of 85 000 shares bought for R177 000 and was acquired in March 2019. The investment was acquired for trade purposes. At the end of the current financial year, the fair value of the investment amounted to R201 000. On 15 March 2020, Nibali Ltd declared a dividend of 50 cents per share payable on 30 April 2020.
Each member received a monthly salary of R15 000 paid in cash. Carapaz the managing member of PogacarCarapaz CC is entitled to a bonus of R18 000 payable on 1 April 2020. These amounts were debited to the salaries and wages account.
The current income tax for the financial year amounted to R65 600 and must still be recorded.
Profit distribution of R80 000 to members during the year is to be paid at the end of April 2020.
Interest must be recorded on the loan accounts to members at 10% per annum on the opening balance of any existing loans as well as on any additional loans granted. On 1 July 2019, an additional loan of R31 400 was granted to Carapaz and was correctly accounted for in the books of the close corporation. Interest on the loans to members is still to be accounted for and must be capitalised. All loans are unsecured and immediately callable.
Interest on loans from members is calculated at 15% per annum and is not yet accounted for. The loan amount is repayable in full on 16 June 2021.
QUESTION 11
Assume the correct profit before amount is R240 000. Which one of the following alternatives represents the correct amount for profit for the year in the statement of profit or loss and other comprehensive income of PogacarCarapaz CC for the year ended 31 March 2020?
A. 240 000
B. 3 445 795
C. 174 400
D. 3 444 000
QUESTION 9
Which alternative represents the correct accounting treatment of carriage on sales in the statement of profit or loss and other comprehensive income of PogacarCarapaz CC for the year ended 28 February 2021?
A. Deducted from cost of sales amount
B. Added to the settlement discount granted
C. Disclosed a an expense under distribution, administrative and other expenses
D. Deducted from revenue amount
EXTRACT OF BALANCES AS AT 31 MARCH 2020: Bank (Dr) Sales Investment in Nibali Ltd at fair value Income received in advance Prepaid expenses Rental income Purchases Other general expenses Salaries and wages Carriage of purchases Carriage on sales Sales returns Settlement discount granted Settlement discount received Allowance for credit losses Purchases returns SARS (Income tax) (Dr) Member's contribution: Pogacar Member's contribution: Carapaz Retained earnings (1 April 2019) Loan from member: Pogacar Loan to member: Carapaz Inventory (1 April 2019) Petty cash Trade receivables control Trade payables control R 42 800 4 123 700 177 000 9900 7 700 55 200 649 200 46 000 1 047 300 50 800 40 200 28 300 7 200 11 200 7 000 11 900 58 400 112 500 100 000 482 400 58 700 44 400 41 300 16 400 69 900 315 100Step by Step Solution
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