QUESTION $1(20$ marks$)($ minutes$)$

Greenfields Fertilizers CC is a fertilizer manufacturing company operating around Broederstroom in the Northwest Province $($in the Witwatersrand, the southern foothills of the Magaliesberg$).$ Raynard and Dikeledi are the two founders and members of this registered close corporation, and they obtained municipal approval to expand the business into producing and distributing fertilizers for maize and other crops.

The following EXTRACT of balances as at $31$ December $2023$ from the accounting records of Greenfields Fertilizers CC is presented to you for assistance:

R

Loan to Raynard

$23,900$

Member$$s contribution: Raynard

$232,700$

Member$$s contribution: Dikeledi

$195,200$

Retained earnings $(1$ January $2023)($Dr$)$

$505,300$

Trade receivables control

$202,700$

Trade payables control

$224,800$

Loan from Raynard

$150,700$

Bank $($favourable$)$

$3,803,800$

Long$-$term loan $($Broederstroom Fund$)$

$6,029,900$

SARS $($income tax$)$

$157,700$

Vehicles at cost

$2,794,200$

Accumulated depreciation: Vehicles $(1$ January $2023)$

$380,500$

Machinery at cost

$66,600$

Accumulated depreciation: Machinery $(1$ January $2023)$

$23,800$

Equipment at cost

$1,862,900$

Accumulated depreciation: Equipment $(1$ January $2023)$

$650,500$

Inventory

$1,273,200$

Profit before tax $($before taking into account the additional information$)$

$3,766,800$

Additional information

$1.$ Depreciation for the year ended $31$ December $2023$ was correctly calculated as R$93,000,$ R$6,800,$ and R$210,000$ for vehicles, machinery, and equipment, respectively.

$2.$ The income tax assessment, received from SARS on $4$ January $2024,$ indicated that the normal income tax for the $2023$ financial year amounted to R$433,000.$

$3.$ The loan from Raynard was advanced to the CC in December $2022$ and is repayable on $31$ May $2024.$

$4.$ Dikeledi experienced personal financial problems during the year and borrowed R$31,200$ from the close corporation. The loan was granted to Dikeledi on $1$ November $2023$ at an interest rate of $21\%$ per annum. The interest on this loan is capitalised. This transaction is still to be recorded.

$5.$ On $1$ January $2023,$ an experienced agricultural scientist by the name of Peter was admitted to the CC in July $2023$ to assist in developing new fertilizer formulations for maize and other crops. In addition to the R$39,200$ cash contribution, Peter further contributed laboratory equipment and an old delivery vehicle to the value of R$122,000$ and R$46,000,$ respectively.

$6.$ On $1$ September $2023,$ a profit distribution of R$47,200$ was made to each member of the close corporation. These amounts should be regarded as loans from members with interest charged and capitalised at $18\%$ per annum. This transaction is yet to be accounted for.

$7.$ On $30$ June $2023,$ one of the fertilizer mixing machines $($production equipment$)$ got damaged by an inexperienced technician from a local service company and was not repairable. This machine was acquired at a cost of R$102,000$ on $1$ May $2019$ and had accumulated depreciation of R$60,400$ on $30$ June $2023($R$42,000$ at $1$ January $2023).$ The equipment was insured, and an insurance pay$-$out at R$41600$ more than the carrying amount of the equipment was paid to the close corporation. The accountant credited the insurance pay$-$out to the SARS $($income tax$)$ account.

REQUIRED:

Complete the amounts in the EXTRACT of the statement of changes in net investments of members for Greenfields Fertilizers CC for the year ended $28$ February $2024.$