Question
The information below relates to 21 questions below Senza and Ngakhona came together to form a company specialising on collecting and selling special art work
The information below relates to 21 questions below
Senza and Ngakhona came together to form a company specialising on collecting and selling special art work from the local talent around Mnambithi. Senzangakhona Painting was formed as a close corporation with Senza and Ngakhona as members. The information below pertains to the business activities of the close corporation for the year ended 28 February 2022.
1. EXTRACT OF BALANCES AS AT 28 February 2022:
R | |
Member's contributions | 2 101 800 |
Retained earnings (1 March 2021) | -229 900 |
Fixed deposit | 131 900 |
Investments | 207 000 |
Vehicles (at cost) | 774 700 |
Accumulated depreciation: Vehicles (1 March 2021) | 117 700 |
Buildings | 2 896 100 |
Accumulated depreciation: Buildings (1 March 2021) | 196 800 |
Land | 1 002 700 |
Equipment (at cost) | 531 400 |
Accumulated depreciation: Equipment (1 March 2021) | 124 300 |
Trade receivables control | 396 200 |
Allowance for credit losses | 7 000 |
Prepaid expenses | 12 500 |
Allowance for settlement discount granted | 11 100 |
Long-term loan: Mnabmbithi Bank | 1 117 400 |
Loan to Ngakhona | 67 200 |
Loan from Senza | 418 900 |
Trade payables control | 669 600 |
Profit for the year (before year-end adjustments) | 1 276 300 |
2. Additional information
2.1. The fixed deposit in Mnambithi bank matures on 31 December 2024.
2.2. Due to investment commitments requiring cash injection, the CC decided on the following:
On 28 February 2022, admitted a new member Tiyani for a contribution of cash amount of R105 000 and equipment valued at R40 500. This transaction is yet to be recorded.
2.3. The long-term loan from Mnambithi Bank was granted on 1 December 2021. The loan is secured by a first mortgage over land and buildings and is repayable in four equal annual instalments together with interest, with the first instalment on 1 December 2022.
2.4. All loans to members are immediately callable whilst the loan from Senza is repayable in full on 30 November 2023.
2.5. Investments consist of
Investment in Makhathini (Pty) Ltd valued R110 000
2 000 shares in Njengabo Ltd at R97 000. These shares were trading at R50.5 at 28 February 2022.
2.6. The accountant of the CC neglected to record the sale of a vehicle with a cost price of R105 000. The vehicle was sold for R32 000 cash on 1 November 2021. The accumulated depreciation on the vehicle amounted to R78 000 on 1 November 2021.
2.7. A telephone statement from Telkom relating to February 2022 was received on 4 March 2022.
2.8. Depreciation for the year which must still be provided for was correctly calculated as follows:
Buildings R154 000
Equipment R 44 600
Vehicles R 51 100
Which one of the following statements represents the correct disclosure of loan to member: Ngakhona in the statement of financial position of Senzangakhona Painting as at 28 February 2022?
a.
the loan is disclosed as part of trade and other receivables
b.
the loan is disclosed separately under current assets
c.
the loan is disclosed as part of partners current accounts
d.
the loan is deducted from the loans from partners
e.
the loan is disclosed separately under non-current assets
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