QUESTION TWO [25]

Alice Angle is an architect who set up her own on 1 March 2021. She supplied the

following information about transactions for the first month ended 31 March 2021:

2021

March

Transaction

1 eg. Alice deposited capital R70 000 into the business bank account.

1 Paid R5 000 as rent for March 2021.

2. Alice contributed equipment valued at R75 000 that she was using at home. The

equipment was fully paid for personally by Alice.

3 Additional equipment was purchased for R35 000 and paid through Alice's personal

bank account.

6

The business obtained a loan of R150 000 from Kind Bank and deposited into the

business bank account. The loan is repayable in 3 equal annual instalments. The

first instalment is payable on 31 March 2023. Interest is payable monthly at 7% per

year beginning on 1 April 2021.

10 Purchased a vehicle for business purposes from Fast Cars Ltd for R220 000. Paid a

deposit equal to 20% of the purchases price by making an electronic finds payment

(EFT). The balance will be paid in 36 monthly instalments of R6 320 beginning 4

June 2021.

11 Purchased consumable material for R3 150 and paid by EFT.

25 Provided services to clients on credit for a total of R96 600.

31 Issued receipts to clients for total of R76 600 in payment of the client's accounts

Paid salaries of R15 000 by making direct deposits into the employee's bank

accounts.

BACHELOR OF COMMERCE YEAR 1 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE

REGENT BUSINESS SCHOOL (RBS) - JANUARY 2021 23

Required:

2.1 Process the above transactions through a table such as the one below. The

transaction of 1March 2021above is used as an example. Record amounts

without brackets to indicate an increase; amounts in brackets to indicate a

decrease; and 0 (a zero) for no effect.

Example of the table required:

Date

Mar.

Assets

R

Equity

R

Liabilities

R

Account

Debited

Account

Credited

1eg 70 000 70 000 0 Bank Capital- Angle

(20)

2.2 Calculate the amount owing by clients at 31 March 2021. (1)

2.3 Will the amount owing by the clients be shown as a current or non-current asset.

Motivate your answer. (1)

2.4 Calculate the amount of interest payable on 1 April to Kind Bank. (2)

2.5 Name the source document that we would use to record the services rendered

to Alice Angle's clients on credit. (1)