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Question 4 ( Marks: 3 5 ) Erin Carter and Associates is a firm of attorneys that specialises in property transactions. On 0 1 October
Question Marks: Erin Carter and Associates is a firm of attorneys that specialises in property transactions. On October the following balances appeared in the Trust and Business General Ledgers: Debit Balance R Credit Balance R Trust Bank Mathebula Section Trust Investment: Crest Bank Business Bank R The following transactions took place during October : nd Received a deposit of R from Ayesha Fredericks for future work to be performed. d Erin Carter Partner purchased a brandnew cell phone for her daughter who just turned She used the firm's debit card to make the payment of R thThe attorneys invested R of the trust funds that were not required immediately. The funds are deposited in a special savings account at Greengrass Bank for a period of three months, bearing interest at per annum. th The attorneys were appointed as the transferring attorney in terms of the sale of an immovable property by client Kim Davies, to the purchaser Eric Ngubane. The agreement of sale contains, inter alia, the following provisions: The purchase price of R will be settled by means of a deposit, amounting to R The balance will be financed with a mortgage loan in the purchaser's name at Bluesky Bank. costs of transfer, including conveyancing costs and transfer duty is payable by EricNgubane. The estate agent commission as well as municipality clearance costs is for the accountof Kim Davies. th Eric Ngubane pays the deposit of R by EFT. A guarantee is received from Bluesky Bank for the balance of the purchase price. th The purchaser paid the proforma statement of account in respect of the transfer costs as follows: Transfer fees R Transfer duty R Total R th An invoice of R is received from the estate agent, Sunrise Properties Limited. th Kim Davies transfers R via EFT to cover the costs of the electricity compliance and the rates clearance certificates. th An amount of R is paid to the eThekwini Municipality on behalf of Kim Davies. The Clearance Certificate is obtained. R is paid to Powerpro Electricians on instructions of the seller. The Electricity Compliance Certificate is acquired soon after. Transfer duty is paid to SARS. The transfer is lodged at the Deeds Office. th The investment on behalf of Zoe Mathebula at Crest Bank is redeemed, together with the interest accrued since its inception of R The transfer is registered. All interest earned is duly paid to the beneficiaries. The estate agent fees are settled. Erin Carter and Associates account to both the seller and the purchaser. Required: Record ALL necessary transactions for the month of October in the following ledger accounts of Erin Carter and Associates: Q Trust Bank Account Balance the account Q Business Bank Account Q Seller Trust Account Q Mathebula Section Trust Investment: Crest Bank Show all calculations and Ignore VAT for the purpose of this question.
Question
Marks:
Erin Carter and Associates is a firm of attorneys that specialises in property transactions. On
October the following balances appeared in the Trust and Business General Ledgers:
Debit Balance R
Credit Balance R
Trust Bank
Mathebula Section Trust Investment:
Crest Bank
Business Bank
R
The following transactions took place during October :
nd Received a deposit of R from Ayesha Fredericks for future work to be performed.
d Erin Carter Partner purchased a brandnew cell phone for her daughter who just turned
She used the firm's debit card to make the payment of R
thThe attorneys invested R of the trust funds that were not required immediately.
The funds are deposited in a special savings account at Greengrass Bank for a period of three
months, bearing interest at per annum.
th The attorneys were appointed as the transferring attorney in terms of the sale of an
immovable property by client Kim Davies, to the purchaser Eric Ngubane. The agreement of
sale contains, inter alia, the following provisions:
The purchase price of R will be settled by means of a deposit, amounting
to R The balance will be financed with a mortgage loan in the purchaser's name
at Bluesky Bank.
costs of transfer, including conveyancing costs and transfer duty is payable by EricNgubane.
The estate agent commission as well as municipality clearance costs is for the accountof Kim Davies.
th Eric Ngubane pays the deposit of R by EFT. A guarantee is received from Bluesky
Bank for the balance of the purchase price.
th The purchaser paid the proforma statement of account in respect of the transfer costs as
follows:
Transfer fees
R
Transfer duty
R
Total
R
th An invoice of R is received from the estate agent, Sunrise Properties Limited.
th Kim Davies transfers R via EFT to cover the costs of the electricity compliance and the
rates clearance certificates.
th
An amount of R is paid to the eThekwini Municipality on behalf of Kim Davies. The
Clearance Certificate is obtained.
R is paid to Powerpro Electricians on instructions of the seller. The Electricity
Compliance Certificate is acquired soon after.
Transfer duty is paid to SARS. The transfer is lodged at the Deeds Office.
th
The investment on behalf of Zoe Mathebula at Crest Bank is redeemed, together with the
interest accrued since its inception of R
The transfer is registered.
All interest earned is duly paid to the beneficiaries.
The estate agent fees are settled.
Erin Carter and Associates account to both the seller and the purchaser.
Required:
Record ALL necessary transactions for the month of October in the following ledger accounts
of Erin Carter and Associates:
Q Trust Bank Account Balance the account
Q Business Bank Account
Q Seller Trust Account
Q Mathebula Section Trust Investment: Crest Bank
Show all calculations and Ignore VAT for the purpose of this question.
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