QUESTION B6(34 marks / 41 minutes)

The following information relates to Game CC.

1.	Balances at 30 September 2004
		R
	Members contributions R Reid	60 000
	G Gomes	40 000
	Land and buildings at cost	682 000
	Equipment at cost 1 October 2003	270 000
	Accumulated profits 1 October 2003	245 045
	20% Long-term (Secured by a mortgage over land and buildings.
	Capital amount repayable on 1 November 2004 R10 000)	90 000
	Loan from member R Reid (Unsecured, at 10% interest per
	annum)	93 800
	Loan to member G Gomes	70 500
	Bank (Dr)	50 000
	Inventory	109 752
	Accounts Receivable	500 600
	Provision for bad debts 1 October 2003	25 030
	Accounts Payable	368 700
	Accumulated depreciation on equipment 1 October 2003	97 200
	Prepaid expenses	11 000
	Interim profit distribution paid to members: R Reid	30 000
	G Gomes	15 000
	Net profit for the year (before any of the additional information has
	been accounted for)	719 077

2. Additional information with regard to transactions not yet taken into account

2.1 An additional amount of R3 000 must be written off as bad debts. The provision for bad debts account must be adjusted to 5% of the outstanding accounts receivable.

2.2 Maintenance expenses in respect of land and buildings to the value of R10 800 were debited to the land and buildings at cost account

2.3 Equipment to the value of R15 000 was purchased on credit at 1 August 2000. This transaction must still be taken into account. No further purchases or disposals in respect of property, plant and equipment were made during the year.

2.4 Depreciation on equipment must be calculated at 20% per annum according to the straight-line method. The estimated scrap values of the equipment are:

On the balance of R270 000, R8 000

On the equipment purchased on 1 August 2004, R450.

2.5A further profit distribution must be made to G Gomes, R5 000

2.6On 30 September 2004 an investment was made in Glad Ltd. 25 000 Ordinary shares with a par value of R2 each were purchased for R25 000, cash. On 30 September 2004 the market value of the shares was R25 000. This transaction must still be taken into account.

Required:

(a) Calculate the accumulated profits of Game CC for the year ended 30 September 2004.

(b) The statement of changes in equity for the year ended 30 September 2004 of Game CC.

(c) Prepare the balance sheet of Game CC at 30 September 2004 according to generally accepted accounting practice. Notes with regard to the property, plant and equipment, investment and the non-current liabilities must be shown.