QUESTION B8(19 marks / 34 minutes)

The following information relates to Garden Close Corporation:

1.	Trial balance at 28 February 2004:
		R	R
	Members contribution S Smith		224 000
	P Pool		196 000
	Loan to member P Pool	119 000
	Loan from member S Smith		406 000
	Undrawn earnings 29 February 2003		91 000
	Net profit before taxation		1 176 000
	Distribution to members	140 000
	Land and buildings at cost	1 141 000
	Motor vehicles at cost	518 000
	Plant and machinery at cost	491 000
	Accumulated depreciation:
	Motor vehicles		189 000
	Plant and machinery		217 000
	Long-term loans		434 000
	Inventory 28 February 2004	105 000
	Bank	112 000
	Accounts Receivable	49 000
	Accounts Payable		126 000
	Receiver of Revenue	440 000
	Accrued expenses		56 000
		3 115 000	3 115 000

2. Additional information:

2.1 Interest of R59 500 payable on the loan from S Smith and interest of R16 500 receivable on the loan to P Pool was capitalised and credited and debited to the respective loan accounts.

2.2 During the year Smith and Pool drew salaries of R168 000 and R84 000 respectively.

2.3 Provision must be made for the following:

2.3.1Undrawn salaries Smith R84 000 Pool R42 000

2.3.2A further profit distribution: Smith R22 400

Pool R19 600

2.3.3SA Normal tax R450 000

2.4 The long-term loans were secured by a mortgage over land and buildings.

Required:

1. Draft the balance sheet of Garden Close Corporation at 28 February 2004, in

	terms of the requirements of the Close Corporations Act, 1984.	(14)
2.	Show the analysis of transactions with members.	(5)

NB: The calculation of the accumulated profits must be shown separately.