Park and Kruger are the only members of Parkruger CC. They have an equal interest in the corporation and distribute profits accordingly.

The following information is extracted from the accounting records of the CC as at 31 March 2022, the financial year-end of the corporation.

EXTRACT OF BALANCES AS AT 31 MARCH 2022:
	R
Buildings	420,135
Bank (Dr)	42,800
Sales	3,213,700
Investment in Mgalelo Ltd at fair value	201,000
Income received in advance	4,900
Prepaid expenses	12,700
Rental income	45,200
Purchases	774,200
Other general expenses	46,000
Salaries and wages	997,300
Carriage of purchases	60,900
Carriage on sales	50,200
Sales returns	37,300
Settlement discount granted	9,200
Settlement discount received	11,200
Allowance for credit losses	5,000
Purchases returns	19,700
SARS (Income tax) (Dr)	58,400
Member’s contribution: Park	92,500
Member’s contribution: Kruger	80,000
Retained earnings (1 April 2021)	242,400
Loan from member: Park	58,700
Loan to member: Kruger	44,400
Inventory (1 April 2021)	41,300
Petty cash	16,400
Trade receivables control	70,185
Trade payables control	315,100

Additional information:

1. An invoice relating to carriage on purchases amounting to R2 500 was received on 30 March 2022 and must still be taken into account.

2. The closing inventory amounted to R76 400.

3. The investment in Mgalelo Ltd consist of 80 000 shares bought for R201 000 and was acquired in March 2021. The investment was acquired for trade purposes. At the end of the current financial year, the fair value of the investment amounted to R212 345.

4. Each member received a monthly salary of R18 000 paid in cash. Kruger the managing member of Parkruger CC is entitled to a bonus of R25 000 payable on 1 April 2022. These amounts were debited to the salaries and wages account.

5. The current income tax for the financial year amounted to R67 800 and must still be recorded.

6. Profit distribution of R80 000 to members during the year is to be paid at the end of April 2022.

7. Interest must be recorded on the loan accounts to members at 10% per annum on the opening balance of any existing loans as well as on any additional loans granted. On 1 October 2021, an additional loan of R10 000 was granted to Kruger and was correctly accounted for in the books of the close corporation. Interest on the loans to members is still to be accounted for and must be capitalised. All loans are unsecured and immediately callable.

8. Interest on loans from members is calculated at 15% per annum and is not yet accounted for. The loan amount is repayable in full on 16 June 2022.

QUESTION 17

Which one of the following alternatives represents the correct amount that must be disclosed as trade and other receivables under current assets in the statement of financial position of Parkruger CC as at 31 March 2022?

QUESTION 18

Which one of the following alternatives represents the correct amount that must be disclosed as cash and cash equivalents under current assets in the statement of financial position of Parkruger CC as at 31 March 2022?

QUESTION 19

Which one of the following alternatives represents the correct amount that must be disclosed as member’s contributions under current assets in the statement of financial position of Parkruger CC as at 31 March 2022?

QUESTION 20

Assume the correct profit for the year is R80 000. Which one of the following alternatives represents the correct amount that must be disclosed as retained earnings under current assets in the statement of financial position of Parkruger CC as at 31 March 2022?

QUESTION 21

Which one of the following alternatives represents the correct amount that must be disclosed as loans from members under non-current liabilities in the statement of financial position of Parkruger CC as at 31 March 2022?

QUESTION 22

Which one of the following alternatives represents the correct amount that must be disclosed as trade and other payables under non-current liabilities in the statement of financial position of Parkruger CC as at 31 March 2022?

Answer rating: 100% (QA)

QUESTION 17 The correct answer is R70 185 The trade receivables control account shows a balance of R... View the full answer