Question 18 of 20 3 Point The pre-adjustment trial balance of JAM Traders as at 28 February 2019, reflected an allowance for credit losses that amounts to R990 and credit losses amounting to R345 (credit losses were written off using method 1 although they were not aware of these two methods as explained below). The financial manager of JAM Traders determined that the allowance for credit losses for the current financial year ended 28 February 20.19 must be R1 435 and credit losses that must still be written off amounts to R780 The financial manager, after having a discussion with the bookkeeper of JAM Traders, learned that there are two methods that can be used to write off the above credit losses of R780. Under method 1. credit losses are written off against the allowance for credit losses account by debiting the allowance for credit losses and crediting the trade receivables control account and the debtor's personal account. Under method 2. credit losses are written off by debiting the credit losses and crediting the trade receivables control account and the debtor's personal account (while the allowance for credit losses remain unchanged). Which of the following statement/s is/are true regarding the balance on the allowance for credit losses and the amount for credit losses that needs to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 28 February 20.19. if one of the methods is followed by JAM Traders. a. The balance on the allowance for credit losses account will be R1 435 under both methods. However, credit losses to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 28 February 20.19, will be R1 225 under method 1 and R1 125 under method 2. b. The balance on the allowance for credit losses account will be R1 435 under method 1 and will remain unchanged at R990 under method 2. c. Irrespective of which method is used the balance on the allowance for credit losses will be R1 435, and the amount for credit losses to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 28 February 20.19 will amount to R1 570. d. The amount for credit losses to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 28 February 20.19, will be R1 225 under method 1 and R1 570 under method 2 since the allowance for credit losses has remained unchanged e. The amount for credit losses to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 28 February 20.19. will be R1 125 under both methods A. B. bande C. band d DC E.a Question 17 of 20 3 Point The following information was extracted from the accounting records of Kumkani Traders: Balances at 1 November 20.9 R 280 000 Equipment: Cost.... Accumulated depreciation: Equipment.. (164 800) Additional information (a) At the beginning of the financial year, 1 November 20.9, Kumkani Traders decided to upgrade some of its processes by selling old printing equipment for R31 000 cash. The machine was bought on 1 November 20.4 for R180 000. Depreciation was provided for at 15% p.a. on the straight-line method. (6) On 1 December 20.9 Kumkani Traders bought 3D printing equipment for R145 600 on credit from Fourth Dimension. Depreciation on the new machine must be provided for at 25% per annum on the diminishing balance method. Which one of the following alternatives represents the current amount to be disclosed as depreciation on the 3D printing equipment for the year ended 31 October 20.10? (The amounts must be rounded off to the nearest Rand). A. Depreciation amount will be R 30 333. B. Depreciation amount will be R 36 400. C. Depreciation amount will be R133 467. D. Depreciation amount will be R 33 367. E. Depreciation amount will be R 48 367. Reset Selection Question 16 of 20 3 Point Extract of the post adjustment trial balance of THC Traders as at 30 September 20.20 Debit Credit R R Plant and machinery (cost) 120 000 Accumulated depreciation: plant and machinery 41 750 Equipment (cost) 90 000 Accumulated depreciation equipment 17 100 Land and buildings (cost) 180 000 Fixed deposit (@7.5% p.a.) 100 000 Depreciation 38 367 Loss on sale of equipment 1 500 Interest on fixed deposit 7 500 How will the property, plant and equipment be disclosed in the statement of financial position of THC Traders as at 30 September 20.20? A THC TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2020 (extract) ASSETS Non-current assets Property, plant and equipment Note R 151 150 8. THC TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2020 (extract) ASSETS Non-current assets Property, plant and equipment Note R 390 000 C. THC TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 20.20 (extract) ASSETS Non-current assets Property, plant and equipment Note R 292 783 D. THC TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 20.20 (extract) ASSETS Non-current assets Property, plant and equipment Note R 431 150 E. THC TRADERS STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 20.20 (extract) ASSETS Non-current assets Property, plant and equipment Note 20 331 150