Exam (elaborations)
FAC1602 ASSESSMENT 3 SEMESTER 2 2024 (+A SOLUTIONS)
- Institution
- University Of South Africa (Unisa)
FAC1602 ASSESSMENT 3 SEMESTER 2 2024
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Education is the most powerful weapon which you can use to change the world
,10/2/24, 12:00 PM Assessment 3 (page 1 of 2)
FAC1602-24-S2 Welcome Message Assessment 3
QUIZ
Time left 0:59:17
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, 10/2/24, 12:00 PM Assessment 3 (page 1 of 2)
Question 1
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Marked out of 30.00
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 23,100
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
https://mymodules.dtls.unisa.ac.za/mod/quiz/attempt.php?attempt=22883273&cmid=1008893 2/3
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