Urgent :

Question 21 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) The insurance amount for Kumkani Traderss factory building for the month of October and November 20.20 has already been paid by the end of the current financial year. The insurance premium amount has remained constant for the last 2 years.

What is the element grouping; description and the amount of the October and November 20.20 insurance expenses that has already been paid for in the current financial year?

• A. Income; Insurance; R1 950.
• B. Liability; Accrued expenses; R23 400.
• C. Asset; Prepaid expenses; R3 900.
• D. Expenses; Insurance; R23 400.

E. Expenses; Insurance; R25 350.

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.