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Qabaqongo Oils is a sunflower oil production and distribution business, supplying various retailers and wholesalers throughout Mpumalanga. The company is a partnership between Khanyisa and
Qabaqongo Oils is a sunflower oil production and distribution business, supplying various retailers and wholesalers throughout Mpumalanga. The company is a partnership between Khanyisa and Zinhle. Below is the relevant information regarding the partnership's financial activities for the year ending June
Extract of balances as at June :
tableRinventoryRBank positiveRTrade receivables control,RVehicles at costREquipment at costRFactory building at costRAccumulated depreciation: Vehicles,RAccumulated depreciation: Equipment,RAllowance for credit losses,RTrade payables control,RCapital: Khanyisa,RCapita: Zinhle,RCurrent account: Khanyisa Cr: July RCurrent account: Zinhle Dr July R
Supplementary information:
Details of the partnership agreement between the partners:
An annual interest rate of is applied to the opening balances of the partners' capital and current accounts.
Profits and losses are shared equally between Khanyisa and Zinhle.
The monthly salaries to which the partners are entitled are R and R for Khanyisa and Zinhle respectively. As of June the salaries paid to the partners were only up to April
Adjustments at the end of the year:
The business aimed to expand its operations by acquiring additional land for sunflower cultivation. On June KEN Corp provided a loan of R to facilitate the purchase of a farm. The farmland was acquired on July at the cost of R This loan is classified as longterm, with an annual interest rate, to be repaid over years with equal instalments starting from June This transaction has not yet been recorded.
On June it was decided that an outstanding debt of R owed to the business was unlikely to be recovered and should be written off as bad debt.
Which one of the following alternatives represents the correct amount that must be disclosed as property, plant and equipment in the statement of financial position of Qabaqongo Oils as at June
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