FAC1601

ASSIGNMENT 1

FIRST SEMESTER
2025

BY: MTHOMBENI: 0767297208

1
INSTRUCTIONS

1. Please make sure to go through this memo before attempting your assignment. It contains step-
by-step workings and clear solutions.
2. The amounts in the information may differ. Students should look for details that correspond to
those in their assignment.
3. The accounts/amounts highlighted in yellow are different for each student.
4. For theory questions, simply copy the question text, paste it into the search bar, and click Enter.
It will take you directly to the question and its answer.
5. Kindly double-check the amounts and apply the formulas provided.
6. Feel free to contact me if you encounter any challenges.

2
Question 1
Not yet answered
Marked out of 1.00

Question text
Decreases in a liability or income account is recorded on the debit side of the account.
True
False
Question 2
Not yet answered
Marked out of 3.00

Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:
R
Land and buildings at cost 1,276,300
Machinery at cost 941,400
Accumulated depreciation: Machinery 354,900
Vehicles at cost 716,700
Accumulated depreciation: Vehicles 354,900
Inventory (1 March 2024) 214,400
Bank (positive balance) 994,900
Trade receivables control 548,000
Trade payables control 430,400
Long-term loan (Mbombela Bank) 1,338,600
Capital: Khanyisile 361,700
Capital: Tinyiko 368,400
Drawings: Khanyisile 95,700
Drawings: Tinyiko 94,300
Interest on loan ?
Depreciation 129,300
Delivery cost on sales 61,200
Water and electricity 103,200
Purchases 2,027,100
Security expenses 32,500
Salaries and wages 474,600
Delivery cost on purchases 27,900
Bank charges 16,800
3
Sales 3,126,800
Stationery consumed 27,200
Settlement discount received 41,700
Settlement discount granted 27,400

Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

REQUIRED:
What is the correct amount of half-yearly interest payment made by Ride4Yours on 30 November 2024?
Long-term loan X 6/12 X 11.4%
1 338 600 X 6/12 X 11.4% = 76300

Answer:76300
Question 3
Not yet answered
Marked out of 5.00
Question text
Ride4Yours Enterprise is based in Malelane and manufactures specialised helmets for motorcycle riders.
The business prides itself on using eco-friendly materials, making their helmets not only durable but also
safe and sustainable for the environment. Ride4Yours Enterprise is owned by Ms. Mkhwanazi, an
entrepreneur who is both an enthusiastic motorcycle rider and a passionate environmental advocate.

4
These specialised helmets are sold at a price of R3 800 each to riders and motorcycle shops around the
country and also to the export market. On 16 November 2024, Ride4Yours Enterprise had an order to
supply 34 helmets to CrazyRiders Society in Malawi. The order and invoicing was completed and the sale
was concluded on 18 January 2025.

This transaction was concluded on the following terms:

· Credit sale
· A trade discount of 10% on the bulk sale. (100 – 10 = 90)
· An early payment discount of 6% on the amount paid within 30 days from invoice date.

REQUIRED:
What is the correct amount received by Ride4Yours Enterprise if CrazyRiders Society only paid 82% of the
amount owing by 18 February 2025?

R3 800 X 34 = R129 200

R129 200 X 90% = R116 280
R116 280 X 82% = R95 350

Answer: 95350

Question 4
Not yet answered
Marked out of 6.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,200
Bank (positive) 293,600
Trade receivables control 199,200
Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,300
Allowance for credit losses 3,000
Trade payables control 119,800
5
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,600
Current account: Tinyiko (Dr: 1 July 2023) 9,600
2. Supplementary information:
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.
2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 600 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:
Assuming that the profit available for distribution to partners amounted to R560 000. What is the correct
balance of current account for Khanyisile as at 30 June 2024?
Balance b/d 13 600
Salary (15 000 X 12) 180 000
Interest on capital (431 500 X 6%) 25 890
Interest on current account (13 600 X 6%) 816
Profit share (560 000/2) 280 000
Drawings (15 000 X 10) (150 000)
350 306

Answer:350306
Question 5
Not yet answered
Marked out of 5.00

Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
6
industry.
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:
R
Land and buildings at cost 1,276,300
Machinery at cost 941,400
Accumulated depreciation: Machinery 354,900
Vehicles at cost 716,700
Accumulated depreciation: Vehicles 354,900
Inventory (1 March 2024) 214,400
Bank (positive balance) 994,900
Trade receivables control 548,000
Trade payables control 430,400
Long-term loan (Mbombela Bank) 1,338,500
Capital: Khanyisile 361,700
Capital: Tinyiko 368,400
Drawings: Khanyisile 95,600
Drawings: Tinyiko 94,300
Interest on loan ?
Depreciation 129,300
Delivery cost on sales 61,200
Water and electricity 103,200
Purchases 2,027,100
Security expenses 32,400
Salaries and wages 474,600
Delivery cost on purchases 27,900
Bank charges 16,800
Sales 3,126,800
Stationery consumed 27,200
Settlement discount received 41,600
Settlement discount granted 27,300

Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
7
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

REQUIRED:
What is the correct amount of total drawings for Ride4Yours for the year ended 28 February 2025?
Drawings: Khanyisile 95 600
Drawings: Tinyiko 94 300
Security expense (700X12) 8 400
Salary: Khanyisile (12 000 X 10) 120 000
Salary: Tinyiko (12 000 X 8) 96 000
Helmet (R5 500 X 2) 11 000
425 300

Answer:425300
Question 6
Not yet answered
Marked out of 1.00
Question text
A statement of profit or loss and other comprehensive income consists of assets, liabilities, and equity
sections.
True
False

Question 7
Not yet answered
Marked out of 2.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.

8
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:
R
Land and buildings at cost R1,276,300
Machinery at cost R941,400
Accumulated depreciation: Machinery R354,900
Vehicles at cost R716,700
Accumulated depreciation: Vehicles R354,900
Inventory (1 March 2024) R214,400
Bank (positive balance) R994,900
Trade receivables control R548,000
Trade payables control R430,400
Long-term loan (Mbombela Bank) R1,338,400
Capital: Khanyisile R361,700
Capital: Tinyiko R368,400
Drawings: Khanyisile R95,500
Drawings: Tinyiko R94,300
Interest on loan ?
Depreciation R129,300
Delivery cost on sales R61,200
Water and electricity R103,200
Purchases R2,027,100
Security expenses R32,300
Salaries and wages R474,600
Delivery cost on purchases R27,900
Bank charges R16,800
Sales R3,126,800
Stationery consumed R27,200
Settlement discount received R41,500
Settlement discount granted R27,200

Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:

9
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

REQUIRED:
What is the correct amount that must be disclosed as revenue in the statement of profit or loss and other
comprehensive income of Ride4Yours for the year ended 28 February 2025?
Sales – Settlement discount granted
3 126 800 – 27 200 = 3 099 600
Answer:3099600
Question 8
Not yet answered
Marked out of 1.00

Question text
The legal position of a partner means that they have limited liability for the debts of the partnership.
True
False
Question 9
Not yet answered
Marked out of 3.00

Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:
R
Land and buildings at cost 1,276,300
Machinery at cost 941,400
Accumulated depreciation: Machinery 354,900
Vehicles at cost 716,700
10
Accumulated depreciation: Vehicles 354,900
Inventory (1 March 2024) 214,400
Bank (positive balance) 994,900
Trade receivables control 548,000
Trade payables control 430,400
Long-term loan (Mbombela Bank) 1,338,400
Capital: Khanyisile 361,700
Capital: Tinyiko 368,400
Drawings: Khanyisile 95,500
Drawings: Tinyiko 94,300
Interest on loan ?
Depreciation 129,300
Delivery cost on sales 61,200
Water and electricity 103,200
Purchases 2,027,100
Security expenses 32,300
Salaries and wages 474,600
Delivery cost on purchases 27,900
Bank charges 16,800
Sales 3,126,800
Stationery consumed 27,200
Settlement discount received 41,500
Settlement discount granted 27,200

Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

11
REQUIRED:
What is the correct amount that must be disclosed as finance costs in the statement of profit or loss and
other comprehensive income of Ride4Yours for the year ended 28 February 2025?

Long-term loan X 9/12 X 11.4%

1 338 400 X 9/12 X11.4% = 114 433

Answer:114433

Question 10
Not yet answered
Marked out of 5.00
Question text
Ride4Yours Enterprise is based in Malelane and manufactures specialised helmets for motorcycle riders.
The business prides itself on using eco-friendly materials, making their helmets not only durable but also
safe and sustainable for the environment. Ride4Yours Enterprise is owned by Ms. Mkhwanazi, an
entrepreneur who is both an enthusiastic motorcycle rider and a passionate environmental advocate.

The following is presented for Ride4Yours Enterprise at 31 March 2025:

Sales R 361 800
Cost of sales R 152 600
Operating expenses R 89 700
Credit losses recovered R 9 700
Capital R 328 900

On February 13, 2025, the owner, withdrew an amount of R19 700 to pay for a friend’s medical expenses
after she had a terrible bike accident in Mbombela. She further withdrew R55 300 on 25 February 2025 to
pay for a bike trip with friends to the Okavango Delta in Botswana. A stocktake of the helmets was
conducted on February 28, 2025. During this assessment, it was discovered that 5 helmets, all valued at
R15 500, were damaged when they were transported to the shop. These damaged helmets were offered
to the local bikers club at a reduced price of R2 500 each. This offer was accepted by the club and the
helmets were collected on 15 March 2025.

REQUIRED:
What is the correct capital balance in the statement of financial position of Ride4Yours Enterprise as at
31 March 2025?

Balance b/d 328 900

Net profit 126 200
Sales 361 800

12
 Cost of sales (152 600)
Operating expenses (89 700)
Credit losses recovered 9 700
Trading stock deficit (15 500 – (2 500 X 5) (3 000)
Drawings (19 700 + 55 300) (75 000)
Balance c/d 380 100

Answer: 380100

Question 11
Not yet answered
Marked out of 1.00
Question text
Which of the following statements is correct?
a. The accounting equation is: Liabilities + Assets = equity
b. The value of a reporting entity lies in the net asset value under its control.
c. Equity is the residual interest in the assets of the entity after deducting all the expenses.
d. A liability is a future obligation of a reporting entity to transfer an economic resource as a result of a
past event.

Question 12
Not yet answered
Marked out of 3.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,300
Bank (positive) 293,600
13
Trade receivables control 199,200
Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,400
Allowance for credit losses 3,000
Trade payables control 119,800
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,500
Current account: Tinyiko (Dr: 1 July 2023) 9,500

2. Supplementary information:
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.
2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 700 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:
What is the correct amount that must be disclosed as property, plant and equipment in the statement of
financial position of Ride4Yours as at 30 June 2024?
Vehicles at cost 708 200
Equipment at cost 209 300
Warehouse building at cost 575 100
Accumulated depreciation : Vehicles (41 700)
Accumulated depreciation : Equipment (64 400)
1 386 500

Answer: 1386500

14
Question 13
Not yet answered
Marked out of 2.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,300
Bank (positive) 293,600
Trade receivables control 199,200
Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,400
Allowance for credit losses 3,000
Trade payables control 119,800
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,500
Current account: Tinyiko (Dr: 1 July 2023) 9,500

2. Supplementary information:

15
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.
2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 700 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:
What is the correct amount that must be disclosed as trade and other receivables in the statement of
financial position of Ride4Yours as at 30 June 2024?
Trade receivables control 199 200
Allowance for credit losses (3 000)
Credit losses 21 700
174 500

Answer: 174500

Question 14
Not yet answered
Marked out of 4.00

Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:

16
 R
Land and buildings at cost R1,276,300
Machinery at cost R941,400
Accumulated depreciation: Machinery R354,900
Vehicles at cost R716,700
Accumulated depreciation: Vehicles R354,900
Inventory (1 March 2024) R214,400
Bank (positive balance) R994,900
Trade receivables control R548,000
Trade payables control R430,400
Long-term loan (Mbombela Bank) R1,338,600
Capital: Khanyisile R361,700
Capital: Tinyiko R368,400
Drawings: Khanyisile R95,700
Drawings: Tinyiko R94,300
Interest on loan ?
Depreciation R129,300
Delivery cost on sales R61,200
Water and electricity R103,200
Purchases R2,027,100
Security expenses R32,500
Salaries and wages R474,600
Delivery cost on purchases R27,900
Bank charges R16,800
Sales R3,126,800
Stationery consumed R27,200
Settlement discount received R41,700
Settlement discount granted R27,400

Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
17
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

REQUIRED:
What is the correct amount that must be disclosed as cost of sales in the statement of profit or loss and
other comprehensive income of Ride4Yours for the year ended 28 February 2025?

Opening inventory 214 400

Purchases 2 027 100
Delivery on purchases 27 900
Settlement discount received (41 700)
Drawings (5 500 X 2 ) (11 000)
Closing inventory (209 000)
2 007 700

Answer:2007700

Question 15
Not yet answered
Marked out of 1.00
Question text
Telephone expense in arrears (unpaid) at the end of an entity’s financial year will be recorded in the
general journal of the entity by:
a. Debiting accrued expense and crediting bank
b. Debiting telephone expense and crediting bank
c. Debiting telephone expense and crediting accrued expense
d. Debiting bank and crediting telephone expense

Question 16
Not yet answered
Marked out of 1.00

Question text
The term ‘current liabilities’ refers to…
a. equity invested by the owner
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b. long-term debts due in more than one year
c. assets that will be converted to cash within a year
d. debts that must be settled within one year

Question 17
Not yet answered
Marked out of 1.00
Question text
The termination of a partnerships occurs when a partner is declared insolvent.
True
False
Question 18
Not yet answered
Marked out of 1.00

Question text
If a partner contributes additional capital during the year, how is it reflected in the financial statements?
a. As income in the Profit or Loss Account
b. As a reduction in liabilities
c. As an increase in equity in the Statement of Financial Position
d. As an expense in the Profit or Loss Account

Question 19
Not yet answered
Marked out of 1.00

Question text
The ‘appropriation account’ in a partnership’s financial statements is used to…
a. record the initial capital contributions of partners.
b. allocate partnership expenses.
c. document withdrawals made by partners.
d. allocate net profit among partners.

Question 20
Not yet answered
Marked out of 6.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,500
Bank (positive) 293,600
Trade receivables control 199,200

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Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,600
Allowance for credit losses 3,000
Trade payables control 119,800
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,300
Current account: Tinyiko (Dr: 1 July 2023) 9,300

2. Supplementary information:
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.
2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 900 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:
Assuming that the profit available for distribution to partners amounted to R560 000. What is the correct
balance of current account for Tinyiko as at 30 June 2024?

Balance b/d (9300)

Salary (20 000 X 12) 240 000
Interest on capital (246 700 X 6%) 14 802
Interest on current account (9 300X6%) (558)
Profit share (560 000/2) 280 000
Drawings (20 000 X 10) (200 000)
324 944

Answer:324 944
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Question 21
Not yet answered
Marked out of 3.00

Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
The following information pertains to the business activities as of February 28, 2025:
Extract of given amounts as at 28 February 2025:
R
Land and buildings at cost 1,276,300
Machinery at cost 941,400
Accumulated depreciation: Machinery 354,900
Vehicles at cost 716,700
Accumulated depreciation: Vehicles 354,900
Inventory (1 March 2024) 214,400
Bank (positive balance) 994,900
Trade receivables control 548,000
Trade payables control 430,400
Long-term loan (Mbombela Bank) 1,338,600
Capital: Khanyisile 361,700
Capital: Tinyiko 368,400
Drawings: Khanyisile 95,700
Drawings: Tinyiko 94,300
Interest on loan ?
Depreciation 129,300
Delivery cost on sales 61,200
Water and electricity 103,200
Purchases 2,027,100
Security expenses 32,500
Salaries and wages 474,600
Delivery cost on purchases 27,900
Bank charges 16,800
Sales 3,126,800
Stationery consumed 27,200
Settlement discount received 41,700
Settlement discount granted 27,400

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Additional information:
1.1 Partnership agreement:
1.1.1 An annual interest rate of 12% is applied to the capital account balances.
1.1.2 Khanyisile and Tinyiko agreed to share profits and losses equally.
1.1.3 Each partner has a monthly salary entitlement of R12,000.

2 Year-end adjustments:
2.1. The security expenses billed to the business every month include a R700 monthly fee for security
at Tinyiko’s private house. The security bill amounting to R2 900 for February 2025 has not yet been
accounted for.
2.2. The long-term loan with Mbombela Bank secured by land and buildings, bearing a 11.4% annual
interest rate, was secured on June 1, 2024, with interest payments due semi-annually at the end of
December and May.
2.3. During the year, 3 helmets valued at R5 500 each were borrowed to Khanyisile’s friends for a
weekend ride as part of marketing campaign. After the weekend, Khanyisile decided to take two of the
helmets for her personal use for weekend rides. This adjustment is yet to be made.
2.4. The inventory's value was calculated to be R209 000 as of February 28, 2025.
2.5. Khanyisile withdrew his salary from March-2024 to December-2024, whilst Tinyiko withdrew her
salary for only 8 months of the financial year. The total amounts paid was debited to the salaries and
wages account.

REQUIRED:
What is the correct amount that must be disclosed as security expense in the statement of profit or loss
and other comprehensive income of Ride4Yours for the year ended 28 February 2025?

Balance b/d 32 500

Drawings (700X12) information 2.1 (8 400)
Accrued expense (information 2.1) 2 900
27 000

Answer:27000
Question 22
Not yet answered
Marked out of 1.00

Question text
In a partnership, the drawings account(if kept) is debited when a partner withdraws a salary.
True
False
Question 23
Not yet answered
Marked out of 2.00

Question text
22
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,300
Bank (positive) 293,600
Trade receivables control 199,200
Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,400
Allowance for credit losses 3,000
Trade payables control 119,800
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,500
Current account: Tinyiko (Dr: 1 July 2023) 9,600

2. Supplementary information:
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.
2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 700 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:

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What is the correct amount which must be disclosed as total equity in the statement of changes in equity
of Ride4Yours for the year ended 30 June 2023?

Capital: Khanyisile 431 500

Capital: Tinyiko 246 700
Current account: Khanyisile 13 500
Current account: Tinyiko (9 600)
682 100

Answer:682100

Question 24
Not yet answered
Marked out of 3.00
Question text
Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership business based in Malelane
that manufactures specialised helmets for motorcycle riders. The business prides itself on using eco-
friendly materials, making their helmets not only durable but also safe and sustainable for the
environment.
Khanyisile is passionate about motorcycle riding, while Tinyiko is an advocate for sustainability and green
business solutions. Together, they aim to position Ride4Yours as a leading brand in the motorcycle safety
industry.
Below is the relevant information regarding the partnership’s financial activities for the year ending 30
June 2024.
Balances as at 30 June 2024:
R
Inventory 108,200
Bank (positive) 293,600
Trade receivables control 199,200
Vehicles at cost 708,200
Equipment at cost 209,300
Warehouse building at cost 575,100
Accumulated depreciation: Vehicles 41,700
Accumulated depreciation: Equipment 64,300
Allowance for credit losses 3,000
Trade payables control 119,800
Capital: Khanyisile 431,500
Capital: Tinyiko 246,700
Current account: Khanyisile (Cr: 1 July 2023) 13,600
Current account: Tinyiko (Dr: 1 July 2023) 9,600
2. Supplementary information:
2.1 Details of the partnership agreement between the partners:
2.1.1 An annual interest rate of 6% is applied to the opening balances of the partners’ capital and
current accounts.
2.1.2 Profits and losses are shared equally between Khanyisile and Tinyiko.

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2.1.3 The monthly salaries to which the partners are entitled are R15 000 and R20 000 for Khanyisile
and Tinyiko respectively. As of 30 June 2024, the salaries paid to the partners were only up to 30 April
2024.
2.2 Adjustments at the end of the year:
2.2.1 The business aimed to expand its operations by acquiring additional warehouse for new range of
helmets. On 30 June 2024, Mbombela Bank provided a loan of R468 000 to facilitate the purchase of the
warehouse. The warehouse was acquired on 2 July 2024 at the cost of R468,000. This loan is classified
as long-term, with an 8% annual interest rate, to be repaid over 6 years with equal instalments starting
from 30 June 2025. This transaction has not yet been recorded.
2.2.1 On 30 June 2023, it was decided that an outstanding debt of R21 600 owed to the business was
unlikely to be recovered and should be written off as bad debt.

REQUIRED:
Assume the correct trade and other receivables amount is R60 000. What is the correct amount that must
be disclosed as total current assets in the statement of financial position of Ride4Yours as at 30 June
2024?

Inventory 108 200

Bank 293 600
Trade and other receivables 60 000
461 800

Answer:461800

Non-current liabilities are long-term debts and have to be settled after one year of the statement of
financial position date.
True
False

Which of the following items would NOT appear in the Statement of Profit or Loss and Other
Comprehensive Income for a partnership?
a. Revenue
b. Depreciation
c. Drawings
d. Cost of sales

When a partnership is dissolved, what happens to its assets?

a. The assets remain with the last standing partner.
b. The assets are distributed among the partners according to the profit-sharing ratio.
c. The assets are automatically transferred to a new partnership.
d. The assets are donated to charity.

The term ‘current liabilities’ refers to…

a. equity invested by the owner
b. debts that must be settled within one year
c. assets that will be converted to cash within a year

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d. long-term debts due in more than one year

When a sole proprietor withdraws money from the business for personal use, it is recorded as an increase
in equity.
True
False

Relevance and faithful representation are the…

a. enhancing qualitative characteristics of financial reporting as stipulated in the Conceptual Framework.
b. fundamental qualitative characteristics of financial reporting as stipulated in the Conceptual
Framework.
c. enhancing qualitative characteristics of the disclosure requirements as stipulated in IFRS.
d. fundamental qualitative characteristics of financial reporting as stipulated in IFRS.

Partners in a partnership are taxed individually on their share of the profits.

True
False

The statement of financial position consists of three elements namely…

a. assets, income and expenses
b. liabilities, income and expenses
c. assets, liabilities and equity
d. liabilities, equity and expenses

A liability is a future obligation of a reporting entity to transfer an economic resource as a result of a past
event.
True
False

Partners have unlimited liability for the debts of the partnership.

True
False

The definition of an asset is…

a.
A present economic resource controlled by a reporting entity as a result of a past event.
b.
A future economic resource controlled by a reporting entity as a result of a future event.
c.
A present economic resource controlled by a reporting entity as a result of a future event.
d.
A future economic resource controlled by a reporting entity as a result of a past event.

Partners cannot share both profit and losses in the same ratio as their capital contributions to the
partnership.
True
False

26
Which of the following measurement bases will often be encountered in a set of financial statements?
a.
All of the above
b.
Fair value
c.
Present value
d.
Historical cost

In a partnership, if the agreement does not specify the interest on capital, what is the usual practice?
a.
The partners negotiate the rate annually.
b.
Interest is paid at the bank's prime rate.
c.
Interest on capital is not paid.
d.
Interest is paid at a fixed statutory rate.

Partners have unlimited liability for the debts of the partnership.

True
False

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