QUESTION 1

Which one of the following alternatives represents the correct total capital contribution: Junior disclosed in the statement of changes in equity of JO Suppliers for the year ended 30 September 20.4?

Junior and Owami are the partners of JO Suppliers and the following information is presented to assist in the preparation of the financial statements for the year ended 30 September 20.4. EXTRACT OF BALANCES AT 20 SEPTEMBER 20.4: Capital: Junior (1 August 20.3) Cr Capital: Owami (1 August 20.3) Cr Current account: Junior (1 August 20.3) Cr Current account: Owami (1 August 20.3) Dr Drawings: Junior Drawings: Owami Allowance for credit losses Equipment Profit for the year Accumulated depreciation Land and buildings Trade receivables control Long-term loan from Junior R 902 000 734 400 73 440 45 900 8 160 5 100 2 450 97 410 607 310 14 390 1 484 100 92 110 64 670 5% 8% 1. Terms of the partnership agreement: 1.1 Interest charged per annum on the opening balances of the partners' capital accounts. 1.2 Interest charged per annum on the opening balances of the partners' current accounts. 1.3. Partner's monthly salaries are as follows 1.3.1. Junior salary 1.3.2. Owami salary 1.4. Junior and Owami share profits in the ratio of 3.2 respectively. 15 400 12 240 2. Year-end adjustments: 2.1 The long-term loan from Junior was acquired at 1 August 20.2 and bears interest at a rate of 10% per annum payable on 1 September every year. The loan will be repaid in full on 30 September 20.4. 2.3 On 30 September 20.4, a bonus amounting to R20 000 was paid to each partners' personal bank account. On the same date lunior decided to transfer his hanus to the partnershin's canital account. This 2.1 The long-term loan from Junior was acquired at 1 August 20.2 and bears interest at a rate of 10% per annum payable on 1 September every year. The loan will be repaid in full on 30 September 20.4. 2.3 On 30 September 20.4, a bonus amounting to R20 000 was paid to each partners' personal bank account. On the same date, Junior decided to transfer his bonus to the partnership's capital account. This transaction is not recorded. 2.4. On 15 September 20.4, Junior paid R10 000 and R4 000 for entertaining clients and his family respectively using the partnership credit card. This transaction is not recorded. QUESTION 1 Which one of the following alternatives represents the correct total capital contribution: Junior disclosed in the statement of changes in equity of JO Suppliers for the year ended 30 September 20.4? A. 1 012 200 B. 992 200 C. 820 000 D. 902 000 . E. 922 000 F. 840 000 Reset Selection