QUESTION 2 (12 marks) (20 Marks)

MotoFix is a vehicle parts supplier based in Durban that specialising in the sale of parts for older motor vehicles. It is solely by owned by Mr. Nkosi who also manages the business at all times. The business started operating on 1 March 2019 during which the following transactions occurred:

Date	Description
1	Mr. Nkosi deposits R100 000 into the business bank account
3	Various parts bought from suppliers for R40 000 and paid for in cash
4	Sales made to customer for R5 000 cash with a cost price of R4 000
10	Stationary bought on credit for R3 000
14	Sales made to customer for R10 000 credit with a cost price of R9 000
16	Rental paid for building cash R3 000
25	Salary paid for assistant R8 000
30	Payment of R3 000 for stationary bought on credit

REQUIRED:

Prepare the general journal entries for the month of March 2019.

QUESTION 3 (20 Marks)

Mr Smith is the owner of a wholesale store (Conquer Wholesalers) that sells merchandise to other business. At the end of November 2019 you were presented with the following balances from the general ledger:

Dr Cr

Vehicles 200 000

Accumulated depreciation on vehicles 75 000

Trade receivables 70 000

Inventory Bank 145 000

Capital 400 000

Trade payables 400 000

Bank 40 000

515 000 515 000

The following transactions were recorded during December 2019:

1 Inventory with a cost price of R75 000 were sold for R100 000 to XYZ stores on credit.

9 Mr Smith withdraws R50 000 from the business account for personal use.

11 Printer cartridges worth R4 000 is bought on credit from Mega Print.

20 Rent is paid R5 000 cash.

22 Inventory worth R60 000 is sold for R100 000 cash to Mr King, their biggest customer.

REQUIRED:

1.1 Prepare the statement of comprehensive income for the month ended December 2019. Ignore depreciation.

3.2 Prepare the statement of financial position for the month ended December 2019.

QUESTION 4 (20 Marks)

4.1 Peter is currently a sole trader doing consultation in the financial services sector. However, although things are going well for Peter he could with more expertise and capital to expand his business. Sandy has shown an interest in joining as part of a partnership. How will this affect Peter and what would his expectation be from Sandy? (10 marks)

4.2 Jane and Peter has decided to start a partnership. Capital contributions of R100 000 (Jane) and R200 000 (Peter) were made towards the new business. It was agreed that available profits will be shares 40% (Jane) and 60% (Peter). In addition, a salary of R20 000 will be paid to each partner. Furthermore, 10% will be earned on capital each month. During the first of month of business sales of R300 000 were realised and operating expenses of R150 000 were incurred (before partner salaries).

REQUIRED:

Record the above information in the following accounts Profit and loss

Appropriation account

Current accounts for each partner