QUESTION $3$

Joline has always been very good at baking beautiful cakes. She has recently decided

to take her hobby to the next level and started a new company that she named Joline's

Cakes $($Pty$)$ Ltd $("$Joline$\text{'}$s Cakes"$).$ Joline's Cakes specialises in baking and selling

cakes. The company has a December year$-$end.

Joline is new to accounting and has therefore asked you, as an accountant, to assist

her.

The following transactions occurred during the year ending $31$ December $2024$

and have not been recorded yet:

To start the company, Joline's Cakes, Joline deposited R$100000$ into the bank

account of Joline's Cakes on $1$ January $2024.$

On $1$ February $2024,$ Joline's Cakes bought an industrial cake mixer from

Wholesaler Galore Ltd that she will use to make the cakes. The original price of

the cake mixer was R$25000.$ Wholesaler Galore Ltd gave a $10\%$ discount on the

original price of the cake mixer because Joline's Cakes paid in cash. The cake

mixer was ready for use on $1$ February $2024$ and has a useful life of $3$ years with

no residual value.

During the year, Joline's Cakes had the following cash sales:

On $31$ December $2024,$ Joline's Cakes got a last$-$minute order to supply a New

Year's cake. Joline sold the cake for R$350$ on $31$ December $2024$; however, the

client only paid the amount on $2$ January $2025.$ This sale has not been included as

part of the sales indicated in point $3$ above.Joline's Cakes bought R$25500$ worth of ingredients during the year. All of these

were bought from CakeFlour $($Pty$)$ Ltd$.$ At year end R$2500$ worth of flour was still

on hand.

On $1$ September $2024,$ Joline decided to run the business from a shop in the local

town. She signed a yearly rental contract on that day. An amount of R$500000$ was

paid upfront in cash for the period $1$ September $2024-31$ August $2025.$

Joline's Cakes grew fast, so they decided to get a R$540000$ loan from ABC Bank

Ltd on $31$ July $2024$ to fund the growth. The loan is repayable in $6$ yearly payments

starting on $31$ July $2025.$ The loan bears interest at $6\%$ per annum.

REQUIRED:

Prepare the general journal entries to document transactions $1-7$ for Joline's Cakes

$($Pty$)$ Ltd for the financial year ending $31$ December $2024.$

Please note that specific dates and detailed narrations are not necessary.

Show all calculations.

Ignore Value Added Tax $($VAT$).$

Please use the following format to present your answer:

$(25$ marks$)$

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