QUESTION $(50$ marks$)(100$ minutes$)$

Zukofurn $($Pty$)$ Ltd $($Zukofurn$)$ is a company that manufactures and supplies custom made furniture in

South Africa. The company was established in $2018$ by Ms Nana and has been growing steadily. The

company$$s furniture is manufactured from its warehouse in Silverton, Pretoria. The furniture is sold to

customers nationwide. Recently, Zukofurn opened five furniture retail stores in major shopping centres

around Gauteng. The financial year of Zukofurn ends on $31$ December.

The following information has been provided to you for the financial year ended $31$ December $2024.$

$1.$ Revenue transactions

Zukofurn sells its products in cash and on credit. For the year ended $31$ December $2024,$ Zukofurn made

total sales of R$23600150.$ The financial accountant of Zukofurn is uncertain how to account for certain

transactions and has written the following email to you, requesting assistance:

From: accountant@zukofurn.co$.$za

To: FAC$3764$ Student

Date: $03$ January $2025$

Subject: Assistance on year end revenue transactions

Dear FAC$3764$ Student

I am writing to request your guidance on the appropriate accounting treatment for a few transactions

that occurred towards the end of the $2024$ financial year. These transactions are giving me a headache,

so I would appreciate your input to ensure accurate reporting.a$)$ With reference to revenue transaction $($a$)$:

Write an email to the accountant of Zukofurn, wherein you provide guidance, in terms of

the conceptual framework, on the financial statement element $($i$.$e$.$ asset, liability, equity,

income or expense$)$ that must be credited with the amount received from Ms Shabalala

in the financial statements of Zukofurn for the year ended $31$ December $2024.$

Please note:

$$ You must not provide any journal entries.

$$ You may assume that the recognition criteria for the relevant financial statement

have been met and thus you do not need to discuss them.

Communication skills: Presentation

$7$

$1$