FAC1601 ASSIGNMENT 1
FOR SEMESTER 1 2025
Kindly note that questions may differ and therefore the
document can be used as a guideline!!
FEND TUTORIALS
,Question 1
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When a sole proprietor withdraws money from the business for personal use, it is recorded as an
increase in equity.
True
False
Question 2
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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
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 finance costs in the statement of profit or loss
and other comprehensive income of Ride4Yours for the year ended 28 February 2025?
, 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.
3. Do not use any abbreviations.
4. Do not use brackets () to indicate a negative amount, instead use the minus sign “–“, e.g. (50)
will be indicated as -50.
88777
Answer:
Interest on the long-term loan (Mbombela Bank):
The loan amount is R1338600, with an interest rate of 11.4% per annum, and interest is paid
semi-annually in December and May.
Since the loan was secured on June 1, 2024, the interest for the period June 1, 2024 to
February 28, 2025 needs to be calculated for the 8 months between June and February.
The annual interest amount is calculated as follows:
1338600×11.4%=152004.40
To find the interest for 8 months:
Interest for 8 months=812×152004.40=101336.27
We will round this to R101336.
Interest on capital accounts:
An annual interest rate of 12% is applied to both Khanyisile and Tinyiko’s capital balances.
Khanyisile's capital = R361700 361700×12%=43404
Tinyiko's capital = R368400 368400×12%=44208
The total interest on capital accounts:
43404+44208=87612 + 44,208 = 87612+44208=87612
Total finance costs:
To calculate the total finance costs, we add the interest on the long-term loan and the interest on
the capital accounts:
FOR SEMESTER 1 2025
Kindly note that questions may differ and therefore the
document can be used as a guideline!!
FEND TUTORIALS
,Question 1
Answer saved
Marked out of 1.00
Flag question
Question text
When a sole proprietor withdraws money from the business for personal use, it is recorded as an
increase in equity.
True
False
Question 2
Answer saved
Marked out of 3.00
Flag question
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
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 finance costs in the statement of profit or loss
and other comprehensive income of Ride4Yours for the year ended 28 February 2025?
, 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.
3. Do not use any abbreviations.
4. Do not use brackets () to indicate a negative amount, instead use the minus sign “–“, e.g. (50)
will be indicated as -50.
88777
Answer:
Interest on the long-term loan (Mbombela Bank):
The loan amount is R1338600, with an interest rate of 11.4% per annum, and interest is paid
semi-annually in December and May.
Since the loan was secured on June 1, 2024, the interest for the period June 1, 2024 to
February 28, 2025 needs to be calculated for the 8 months between June and February.
The annual interest amount is calculated as follows:
1338600×11.4%=152004.40
To find the interest for 8 months:
Interest for 8 months=812×152004.40=101336.27
We will round this to R101336.
Interest on capital accounts:
An annual interest rate of 12% is applied to both Khanyisile and Tinyiko’s capital balances.
Khanyisile's capital = R361700 361700×12%=43404
Tinyiko's capital = R368400 368400×12%=44208
The total interest on capital accounts:
43404+44208=87612 + 44,208 = 87612+44208=87612
Total finance costs:
To calculate the total finance costs, we add the interest on the long-term loan and the interest on
the capital accounts:
