4a 12 13 14 1s QUESTION ONE DISPOSAL OF FIXED ASSETS (20 marks) REQUIRED ‘Answer the following questions from the information given below. All workings must be shown, Calculate the depreciation far the current financial year on the vehicle that was sold. (2 Marks) Prepare the Fixed Acset Realisation account in the general ledger to reflect the disposal of the vehicle on 34 August 2019. (4 Marks) Calculate the depreciation for the current financial year on the new vehicle acquired. (2 Marks) Prepare the Accumulated Depreciation on Vehicles account in the general ledger to reflect all the entries up to the end of the financial year. (5 Marks) Prepare the following note to the financial statements (amount column for Vehicles only) as at 28 February 2020: (5 Marks) INFORMATION Island Enterprises owns a fleet of motor vehicles. The following balances appeared in the general ledger on 01 March 2019, the beginning of the financial year: Vehicles at cost 1000 000 Accumulated depreciation on vehicles | R400 000 Additional information On 31 August 2019, a vehicle that cost R200 000 was sold for R32000 cash. The accumulated depreciation on this vehicle was R165 000 on 01 March 2019, On 01 December 2019 a new vehicle was purchased for R250 000 cash. Deprecation is provided for on vehicles at 20% per annum on the diminishing balance.QUESTION 2 PARTNERSHIPS (20 marks) The information given below was extracted from the accounting records of Magnate Traders, @ partnership business with Magnum and Nathan as partners. REQUIRED Prepare the Statement of Changes in Equity for the year ended 28 February 2020. INFORMATION Extract from the ledger of Magnate Traders on 28 February 2020: Debit Credit R R Capital: Magnum 600 000 Capital: Nathan “400 000 ‘Current account: Magnum (01 March 2019) 40 000 ‘Current account: Nathan (01 March 2019) 30.000 Drawings: Magnum +300 000 Drawings: Nathan 250 000 (a) (b) ( id) fe) ‘The following must be taken into account: The net profit according to the Profit and loss account amounted to R800 000. The partners are entitled to the following monthly salaries: Magnum R200 Nathan R18 000 The partners are entitled to interest on their capitals at a rate of 15% per year. ‘Magnum is entitled to a special bonus equal to 10% of the net profit before any of the above appropriations are taken into account. The remaining profit or shortfall must be shared between Magnum and Nathan in the ratio 3:2 respectively.QUESTION 3 FINANCIAL STATEMENTS (20 MARKS) The trial balance, adjustments and additional information given below were extracted from the accounting records of Art Traders on 28 February 2020, the end of the financial year. REQUIRED, Prepare the Statement of Comprehensive Income for the year ended 28 February 2021. 'PRE-ADJUSTIMENT TRIAL BALANCE AS AT 28 FEBRUARY 2020 Debit (A) _[_ Credit R] Balance sheet accounts section Capital $84.00 Drawings 264000 Land and buildings 664000 Equipment at cost 136000 ‘Accumulated depreciation on equipment 61.000 Fbied Gepost: Harvey Bank (10% p.2.) 30000 Trading inventory 162000 Trade Debtors 47000 Bank 290000 Cash float "2000 Trade Creditors 45.000 ‘loan: Harvey Bank 87,000 ‘Nominal accounts section Sales 1760 000 Cost of sales 395000 Sales returns: 28000 Selaries and wages 180000 Rent income: 33,000 ‘Commission income “4.000 Stationery 7000 ‘Advertising 50000 Telephone 17000 Electricity and water 724000 ‘Bank charges 3000 Insurance 15.000 Interest on oan 17000 ‘Sundry expenses 43000 2874000[ 2.874.00010. 1. Adjustments and additional information ‘According to physical stocktaking, the value of trading inventory on hand on 28 February 2021. amounted to R158 000. ‘Stationery unused during the accounting period, according to a physical count, amounted to 1.000. Rent has been received for the period 01 March 2020 to 31 January 2021. ‘The telephone account for February 2021, R1 500, has not yet been paid. ‘An invoice for advertising has been received from a local newspaper but no entry has been ‘made for this, R5 000. ‘The insurance total includes an insurance premium of R3 000 that was paid for the period (01 July 2029 to 30 June 2021. Interest on loan unpaid for February 2020 amounted to R1 500. Interest is owing to Art Traders on the fixed deposit. The investment was made on (01 March 2020. Provide for depreciation on equipment at 20% per year on cost. . Donna, a debtor, who owed R1 000 was declared insolvent. Her account must now be written off. ‘A payment of R2 000 forwater and electricity was erroneously entered in the sundry expenses account. Correct the error.