Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cima Official Exam Practice Kit Financial Accounting And Tax Principles 2008 Edition

Authors: Mike Rogers, John Dunn

4th Edition

0750686901, 978-0750686907

More Books

Students also viewed these Accounting questions

Question

=+country competitive advantages? Why? Support your point of view.

Answered: 1 week ago

Question

=+from: a) a MNEs perspective? and b) the HRM managers perspective?

Answered: 1 week ago