Case Study

Consider the case study below and answer the questions that follow.

Springboks

The Springboks have invested significantly in securing the talents of Siya Kolisi, a distinguished double World Cup winner and exceptional player, committing a substantial amount of R$19,9$ million for his participation in the upcoming Rugby World Cup. The payment took place on $31$ January $2024.$

Renowned as the third$-$largest sporting event globally, the Rugby World Cup captivates millions of enthusiasts who unite in stadiums and in front of television screens to witness the thrilling spectacle.

Having Siya Kolisi as the Springbok team captain is expected to provide a valuable advantage, contributing to their efforts to maintain their title. His presence adds a layer of anticipation and optimism, highlighting the significance of his role in enhancing the team's chances in this highly anticipated sporting event.

Below is an extract of the summary of all transactions the Springboks made. After working through all the source documents for January $2025,$ all the transactions below must still be captured in the books of the business.

Transactions during January $2025$:

$1$ The owner contributed a vehicle to the business worth R$950000\mathrm{.}00$

$5$ Purchased inventory from Material World for R$50000\mathrm{.}00$ via EFT to make rugby jerseys.

$7,$ Purchase pencils and paper from Waltons on credit R$250\mathrm{.}00$

$25$ The owner took jerseys home for his wife and children valued at R$7500\mathrm{.}00$

$28$ The Springboks made a donation of R$400000$ towards Westen Cape Firefighters via EFT.

$31$ Ticket sales of Rugby games amounted to R$9850000\mathrm{.}00$ for January $2025.$

Question $1$

$(14$ marks$)$

Refer to the transactions listed in the case study.

$1\mathrm{.}1$ Is the payment made to Siya Kolisi classified as an asset, equity or liability?

$1\mathrm{.}2$ Substantiate your answer in $1\mathrm{.}1,$ with adequate reasons, by referring to the definition and applying the knowledge you have acquired in this course to the case study.