Question 1
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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
OSCAR THE TUTOR members of this registered close corporation, and they obtained municipal approval to
expand the business into producing and distributing fertilizers for maize and other
oscardiura@gmail.com crops.
+27737560989
for FAC MAC ECS DSC TAX QMI FIN INV BNU STA The following EXTRACT of balances as at 31 December 2023 from the
tutorials accounting records of Greenfields Fertilizers CC is presented to you for
assistance:
R
Loan to Raynard 23,100
Member’s contribution: Raynard 232,100
Member’s contribution: Dikeledi 195,200
Retained earnings (1 January 2023) (Dr) 505,400
Trade receivables control 202,700
Trade payables control 224,800
Loan from Raynard 150,100
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
3,766,100
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
R31,300 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 R39,300 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 R47,300 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 28 February
2024.
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].
GREENFIELDS FERTILIZERS CC
STATEMENT OF CHANGES IN NET INVESTMENTS OF MEMBERS FOR THE
YEAR ENDED 28 FEBRUARY 2024
M e m be r's Loans from
Re taine d Earnings Loans to m e m be rs Total
contributions m e m be rs
Balances at 1 January 2023 427300 505400 -23100 150100 1059700
Additional member’s contribution 207300 0 0 0 207300
Total comprehensive income for the year 0 3046100 0 0 3046100
Loans to members advanced during the year 0 0 -31300 0 -31300
Distribution to members 0 -141900 0 0 -141900
Loans to received members during the year 0 0 0 141900 141900
Interest on loans from/to members capitalised 0 0 -2191 12771 10580
, Balance s at 31 De ce m be r 2023 634600 3409600 -56591 304771 4292380
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OSCAR THE TUTOR
oscardiura@gmail.com
+27737560989
for FAC MAC ECS DSC TAX QMI FIN INV BNU STA
tutorials
, Question 8
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GreenFields Fertilizer Ltd is a company specialising in the production and distribution of high-quality fertilizers for
maize and other crops. The company operates a large manufacturing plant located in Broederstroom, North West
Province, where it produces a variety of fertilizers tailored to optimise soil nutrients and increase crop yields.
GreenFields Fertilizer Ltd has gained a significant presence in the agricultural sector and serves clients across
Southern Africa.
The company's financial year-end is 28 February, and it has consistently maintained strong financial performance
since its incorporation.
GREENFIELDS FERTILIZER LTD
EXTRACT OF BALANCES AS AT 28 FEBRUARY 2024:
R
Investments 376,925
Land and buildings at revaluation (1 March 2023) 1,119,400
Equipment at cost 658,300 OSCAR THE TUTOR
Accumulated depreciation: Equipment 87,900
oscardiura@gmail.com
Revaluation surplus (1 March 2023) 120,200
Inventory (1 March 2023) 46,200 +27737560989
Bank 137,300 for FAC MAC ECS DSC TAX QMI FIN INV BNU
Trade receivables control 283,500 STA tutorials
Petty cash 8,000
Share capital: Ordinary shares (1 March 2023) 755,300
Retained earnings (1 March 2023) 280,700
Loan: Broederstroom Bank 125,500
SARS (income tax) (Dr) 35,300
Sales 3,205,100
Allowance for settlement discount granted 7,400
Carriage on purchases 22,600
Trade payables control 265,900
Income received in advance 8,200
Allowance for credit losses 7,200
Settlement discount granted 5,700
Auditor's remuneration 141,800
Carriage on sales 28,300
Settlement discount received 2,400
Purchases 305,000
Salaries and wages 379,200
Directors’ remuneration 200,100
Stationery 11,400
Telephone 16,600
Additional information:
1. The income tax for the financial year ended 28 February 2024 amounted to R137,800 and must still be
recorded.
2. The revaluation of land for the current year resulted in a revaluation surplus amounting to R118,000.
3. A provision of R59,000 must still be made for depreciation on equipment.
4. Directors made the following resolutions at year-end, which are yet to be recorded:
· Dividends declared at R1.4 per share and will be paid at the end of April 2024.
· A total bonus amounting to R163,000 must be paid to directors on 30 April 2024.
5. The loan from Broederstroom Bank was acquired on 1 March 2023 at an interest rate of 10% per annum.
Interest on all loans for the current financial year has not yet been accounted for. The loan is repayable in five
(5) annual equal instalments with effect from 1 March 2024.
6. Authorised share capital consists of 1000,000 NPV ordinary shares. Share capital stated above consists of
ordinary shares issued at R4.00 per share. On 01 December 2023, the directors issued 50,000 shares at R5.4
per share. The shares were taken up by the public on 27 February 2024, and this transaction has not been
recorded.
7. Inventory on 28 February 2024 consisted of the following:
· Inventory (stock) on hand: R54,400
· Stationery on hand: R5,100
8. The allowance for credit losses must be adjusted to R8,400. A debtor who owes the business R12,200 was
declared insolvent and must be written off as irrecoverable.
9. Investments consist of
· Investment in Mkhaya Institute (Pty) Ltd at a cost of R140,000 – this investment is measured at cost.
