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FAC1601 ASSESMENT 5 SEMESETER 2 QUESTIONS 2024
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FAC1601ASSESMENT
5
2024 SEMESTER 2
QUESTIONS
,Greenfields Fertilizers CC is a fertilizer manufacturing company operating
around Broederstroom in the Northwest Province (in the Witwatersrand, the
southern foothills of the Magaliesberg). Raynard and Dikeledi are the two
founders and members of this registered close corporation, and they obtained
municipal approval to expand the business into producing and distributing
fertilizers for maize and other crops.
The following EXTRACT of balances as at 31 December 2023 from the
accounting records of Greenfields Fertilizers CC is presented to you for
assistance:
R
Loan to Raynard 23,800
Member’s contribution: Raynard 232,600
Member’s contribution: Dikeledi 195,200
Retained earnings (1 January 2023) (Dr) 505,200
Trade receivables control 202,700
Trade payables control 224,800
Loan from Raynard 150,600
Bank (favourable) 3,803,800
Long-term loan (Broederstroom Fund) 6,029,900
SARS (income tax) 157,700
Vehicles at cost 2,794,200
Accumulated depreciation: Vehicles (1 January 2023) 380,500
Machinery at cost 66,600
Accumulated depreciation: Machinery (1 January 2023) 23,800
Equipment at cost 1,862,900
Accumulated depreciation: Equipment (1 January 2023) 650,500
Inventory 1,273,200
Profit before tax (before taking into account the additional
3,766,700
information)
Additional information
1. Depreciation for the year ended 31 December 2023 was correctly calculated
as R93,000, R6,800, and R210,000 for vehicles, machinery, and equipment,
respectively.
, 2. The income tax assessment, received from SARS on 4 January 2024,
indicated that the normal income tax for the 2023 financial year amounted to
R433,000.
3. The loan from Raynard was advanced to the CC in December 2022 and is
repayable on 31 May 2024.
4. Dikeledi experienced personal financial problems during the year and
borrowed R31,100 from the close corporation. The loan was granted
to Dikeledi on 1 November 2023 at an interest rate of 21% per annum. The
interest on this loan is capitalised. This transaction is still to be recorded.
5. On 1 January 2023, an experienced agricultural scientist by the name of Peter
was admitted to the CC in July 2023 to assist in developing new fertilizer
formulations for maize and other crops. In addition to the R39,100 cash
contribution, Peter further contributed laboratory equipment and an old delivery
vehicle to the value of R122,000 and R46,000, respectively.
6. On 1 September 2023, a profit distribution of R47,100 was made to each
member of the close corporation. These amounts should be regarded as loans
from members with interest charged and capitalised at 18% per annum. This
transaction is yet to be accounted for.
7. On 30 June 2023, one of the fertilizer mixing machines (production equipment)
got damaged by an inexperienced technician from a local service company
and was not repairable. This machine was acquired at a cost of R102,000 on 1
May 2019 and had accumulated depreciation of R60,400 on 30 June 2023
(R42,000 at 1 January 2023). The equipment was insured, and an insurance
pay-out at R41 600 more than the carrying amount of the equipment was paid
to the close corporation. The accountant credited the insurance pay-out to the
SARS (income tax) account.
REQUIRED:
Complete the amounts in the EXTRACT of the statement of changes in net
investments of members for Greenfields Fertilizers CC for the year ended 31
December 2023.
Instructions:
1. Round off all your answers to the nearest rand (eg: 50.56 = 51)
2. Don’t use any special characters (&) and don’t use bold in your answer. It will
be marked incorrect.
3. Do not use any abbreviations.
4. Please remember the brackets around the amounts must be indicated by a
negative amount [eg: (50) will be -50].
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