URGENT : Question 16 of 27 2.0 Points Extract of pre-adjustment trial balance of Kumkani Traders as at 30 September 20.20 Debit Credit R R Capital (1 October 20.19) 200 000 Drawings ? Inventory: Trading (1 October 20.19) 61 725 Allowance for credit losses. 4 450 Mortgage: Ginsberg Bank ........................................... 195 000 Fixed deposit (at 7.5% per annum) 50 000 Sales... 345 060 Carriage on purchases 9 500 Sales returns. 6 780 Rental income... 19 800 Purchases.. 197 800 Purchases returns 2 890 Depreciation.. 38 367 Salaries and wages.. 88 500 Insurance expenses. 27 300 Telephone expenses 14 280 Water and electricity. 23 450 Credit losses.. 1 600 After a year-end inventory count, the value of trading inventory on hand was R123 450. Additional information (a) On 1 April 20.20 Kumkani Traders bought a factory building by means of a mortgage, from Ginsberg Bank, that bears interest at a rate of 10.05% per annum compounded annually. The loan is redeemable in 20 annual instalments of R22 980. The instalments are in arrears. Interest for the current year must still be provided for. (b) The fixed deposit investment of R50 000 was made on 1 April 20.20. Interest on this investment is paid annually. Which one of the following alternatives represent the correct amount that must be disclosed as interest on mortgage for the year ended 30 September 20.20? A. The interest expense amount will be R Nil. B. The interest expense amount will be R8 644. C. The interest expense amount will be R17 288. D. The interest expense amount will be R19 598. E. The interest expense amount will be R9 799. Reset Selection Mark for Review What's This? Question 17 of 27 2.0 Points CK TRADERS AN EXTRACT OF THE PRE-ADJUSTMENT TRIAL BALANCE AS AT 31 OCTOBER 20.9 R Capital. Drawings. Trade receivables control. Trade payable control Land and building.. Machinery (at cost) Accumulated depreciation: Machinery (1 November 20.8). Vehicle (at cost). Accumulated depreciation: Vehicle (1 November 20.8).. Inventory: Trading (1 November 20.8) Bank (Favourable). Petty cash Cash float Loan from ATM Bank. Fixed deposit: TB Bank. Allowances for credit losses. Rent income Interest on fixed deposit Advertising.. Packaging material Stationery Credit losses... Salaries and wages Interest on loan from ATM Bank.. Water and electricity.. Telephone expenses. 350 000 2 500 180 560 129 875 73 722 1 075 308 ? 125 900 12 590 4 800 15 909 254 2 542 258 564 120 782 1 530 20 928 7 247 23 580 8 910 3 540 650 98 000 20 257 9 456 1 984 Additional information with regards to adjustments that you still need to take into account. (a) CK Traders sublets part of its building to B Silver. B Silver paid R20 928 on the 1 November 20.8 for 15 months. The rental agreement stipulated that CK Traders will increase the rental amount to R1 688 from 1 August 20.9. (b) CK Traders deposited R120 782 into a fixed deposit account with TB Bank on 1 February 20.9, at an interest rate of 12% per annum. The interest is receivable twice per annum in June and December. (c) On 1 November 20.8, CK Traders entered into an advertising contract with Kgomotso advertising agency for a period of 2 years for a total amount of R23 580. CK Traders paid R23 580 to Kgomotso advertising agency on 1 November 20.8 to cover the full contracted period. (d) A physical inventory count revealed that the following was on hand on 31 October 20.9: Inventory R7 775 Packaging material R1 990 Stationery R260 (e) On 1 December 20.8 CK Traders obtained a loan from ATM Bank. Interest is calculated at 11,5% per annum. The loan repayment schedule indicate that the capital repayment of the loan would be made in four equal instalments as follows: Instalments Amount Repayment date First instalment R64 641 30 April 20.10 Second instalment R64 641 31 October 20.10 Third instalment R64 641 30 April 20.11 Fourth instalment R64 641 31 October 20.11 (f) You may assume that the total comprehensive loss for the year, after all the above adjustments have been considered, amounted to R227 519. The total amount for non-current liabilities to be shown in the statement of financial position as at 31 October 20.9 will be A. R258 564 B. R288 299 C. R129 282 D. R285 821 E. R193 923 Reset Selection Mark for Review What's This? Question 18 of 27 2.0 Points Which one of the following would be classified as a current asset for a furniture retailer? A. Delivery vehicles. B. Shop fittings. C. Furniture held for resale. D. Bank overdraft. E. Property. Reset Selection Mark for Review What's This? Question 19 of 27 2.0 Points The financial year end for Blessing Traders is 30 June. The rental expenses of Blessing Traders are R7 000 per month. The financial records of Blessing Traders showed that rent was paid for nine months during the financial year ended 30 June 20.1. Which one of the following represents the correct adjustment journal entries in the general journal for 30 June 20.1? A. General journal Amount Account to be debited Account to be credited R Accrued expenses Rental expenses 21 000 B. General journal Amount Account to be debited Account to be credited R Rental expenses Accrued expenses 63 000 C. General journal Amount Account to be debited Account to be credited R Accrued income Rental expenses 21 000 D. General journal Amount Account to be debited Account to be credited R Rental expenses Accrued income 21 000 E. General journal Amount Account to be debited Account to be credited R Rental expenses Accrued expenses 21 000 Reset