Ndiza Traders is a partnership with Ukhozi and Sparrow as partners. The following information pertains to the business activities of the partnership for the year ended 30 June 2021.

1. Balances as at 30 June 2021:

NDIZA TRADERS
BALANCES AS AT 30 JUNE 2021
Capital: Ukhozi	R90 000
Capital: Sparrow	R70 000
Current account: Ukhozi (Cr: 1 July 2020)	R2 500
Current account: Sparrow (Dr: 1 July 2020)	R1 200
Drawings: Ukhozi (30 June 2021)	R4 590
Drawings: Sparrow (30 June 2021)	R7 000
Trade payables control	R54 930
Bank (Dr)	R83 140
Inventory	R22 500
Trade receivables control	R38 500
Allowance for credit losses	R260
Vehicle at cost	R96 000
Accumulated depreciation: Vehicles	R11 500
Prepayment: Equipment hire	R38 800
Profit for the year	R62 500

2. Additional information:

2.1 Partnership agreement:

2.1.1 The partners Ukhozi and Sparrow share profits and losses in the ratio of 3:2 respectively.

2.1.2 Interest is calculated at 12% per annum on the opening balances of the partners’ capital and current accounts.

2.1.3 Both partners are entitled to a salary of R15 000 per month. On 30 June 2021, the partners were paid R10 000 each as monthly salaries. This information is yet to be recorded in the books of the partnership.

2.2 Year-end adjustments:

2.2.1 Ukhozi’s mother-in law decided to lend R100 000 to the partnership on 30 June 2021 to enable them to buy land for development. The R100 000 will be a long-term loan to the partnership, with interest calculated at 8% per annum and will be repayable in equal instalments over 10 years. The first instalment is due on 30 June 2022.

Question 1.1
Which one of the following alternatives represents the correct amount that must be disclosed as total equity in the statement of changes in equity of Ndiza Traders for the year ended 30 June 2020?

1. R161 250

2. R161 300

3. R149 760

4. R160 000

5. R163 750

Question 1.2
Which one of the following alternatives represents the correct amount that must be disclosed as drawings in the statement of changes in equity of Ndiza Traders for the year ended 30 June 2021?

1. R371 490

2. R360 000

3. R251 590

4. R251 490

5. R240 000

Question 1.3
Which one of the following alternatives represents the correct amount that must be disclosed as property, plant and equipment in the statement of financial position of Ndiza Traders as at 30 June 2021?

1. R134 800

2. R 84 500

3. R 84 400

4. R 96 000

5. R123 200

Question 1.4
Which one of the following alternatives represents the correct amount that must be disclosed as trade and other receivables in the statement of financial position of Ndiza Traders as at 30 June 2021?

1. R38 240

2. R77 050

3. R77 550

4. R38 250

5. R77 300

Question 1.5
Which one of the following alternatives represents the correct amount that must be disclosed as cash and cash equivalents or bank overdraft in the statement of financial position of Ndiza Traders as at 30 June 2021?

1. R 83 140

2. R 56 760 (Bank overdraft)

3. R183 240

4. R156 760 (Bank overdraft)

5. R 83 240

Question 1. 6
Assuming that the profit available for distribution to partners amounted to R20 000, which one of the following alternatives represents the correct balance in the current account of Sparrow on 30 June 2021?

1. R68 056

2. R68 000

3. R75 000

4. R67 000

5. R60 000

Answer rating: 100% (QA)

11 R149 760 12 R251 590 13 R84 400 14 R38 250 15 R83 140 16 R68 056 Explanation 11 The equity at the ... View the full answer