The following transactions have been extracted from the books of a parthership ZT Traders (partners Zel an Tees) at the financial year end 28 February 20.9. The business applies a mark-up on cost on all goodi The bank account has a credit balance at all times.

REQUIRED:
Analyse the following transactions under the headings in your Answer Book. The first one has been done a an example for you.

TRANSACTIONS:
E.g.: Paid the electricty account of R2 500.

1. Received a direct deposit from a tenant for rent of .
2. Provision for bad debts of R3 200 must be reduced to R2 900.
3. Bought packing materials on credit for R1 600 less tade discount.
4. Paid the creditor (see No. 3) by EFT the amount owing less discount.
5. Debtor, J. Mkhize, deposited an amount of R4 248 after a discount of had been deducted.
6. Partner Zel took goods with a selling price of R5 000 for his own use.
7. Parther Tees withdrew his monthly salary of R12 000.
8. Partner Zel tuansferred a Gr balance of R 45000 on his current account to his capital account.
9. Trading stock with a selling price of R90 000 must be written down to below the cost price as the stock is now old.
10. Dehtor, J. Mshala, claimed an allowance of on goods with a cost price of R3 600 as they were damaged. Alowed her this claim.
11. A creditor with a debit balance of R500 must be transferred to her debtors account.
12. Depreciation must be written off equipment of R4 200.
13. A credit sale of R950 to F. Fly was recorded in the account of B. Bea in error.
14. Transfer the gross profit of R120 000 .
15. Allocate the interest on capital to partner Zel of R15 000.
16. The final division of profit to partreer Tees was R65 000.
17. The Pre-Adjustment Trial Balance showed insurance of R 33800 . This included an annual premium of R13 200 paid on 1 November 20.8.
18. The consumable stores on hand on 1 March 20.8 for 2920 was not reversed. Make the correction.
19. Partner Zel’s personal insurance of was debited to the insurance account.

Paid the rates deposit of R7 800 to the municipality.

Transaction Analysis

1. Received a direct deposit from a tenant for rent of R5,500.
   • Income: Increase in cash (bank account) by R5,500.
2. Provision for bad debts of R3,200 must be reduced to R2,900.
   • Adjustment: Decrease in provision for bad debts by R300 (R3,200 - R2,900). This will increase profit.
3. Bought packing materials on credit for R1,600 less 8% trade discount.
   • Calculation:
     • Trade discount =
     • Net cost =
   • Expenses: Increase in packing materials (asset) by R1,472.
4. Paid the creditor (see No. 3) by EFT the amount owing less 5% discount.
   • Calculation:
     • Discount =
     • Amount paid =
   • Expenses: Decrease in cash (bank account) by R1,398.40.
5. Debtor, J. Mkhize, deposited an amount of R4,248 after a discount of 11.5% had been deducted.
   • Calculation:
     • Let the original amount be .
   • Income: Increase in cash (bank account) by R4,248.
6. Partner Zel took goods with a selling price of R5,000 for his own use.
   • Equity: Decrease in inventory (asset) by R5,000. This is a drawing by the partner.
7. Partner Tees withdrew his monthly salary of R12,000.
   • Equity: Decrease in cash (bank account) by R12,000. This is a drawing by the partner.
8. Partner Zel transferred a balance of R45,000 on his current account to his capital account.
   • Equity: Increase in capital by R45,000 and decrease in current account by R45,000.
9. Trading stock with a selling price of R90,000 must be written down to 10% below the cost price as the stock is now old.
   • Calculation:
     • Cost price =
     • 10% below cost =
   • Adjustment: Decrease in inventory (asset) by .
10. Debtor, J. Mshala, claimed an allowance of 15% on goods with a cost price of R3,600 as they were damaged. Allowed her this claim.
    • Calculation:
      • Allowance =
    • Adjustment: Decrease in debtors (asset) by R540.
11. A creditor with a debit balance of R500 must be transferred to her debtors account.
    • Adjustment: Decrease in creditors (liability) by R500 and increase in debtors (asset) by R500.
12. Depreciation must be written off equipment of R4,200.
    • Expenses: Decrease in equity by R4,200.
13. A credit sale of R950 to F. Fly was recorded in the account of B. Bea in error.
    • Adjustment: Decrease in sales (income) by R950 and increase in debtors (asset) by R950.
14. Transfer the gross profit of R120,000.
    • Income: Increase in equity by R120,000.
15. Allocate the interest on capital to partner Zel of R15,000.
    • Equity: Increase in equity by R15,000.
16. The final division of profit to partner Tees was R65,000.
    • Equity: Decrease in equity by R65,000.
17. The Pre-Adjustment Trial Balance showed insurance of R33,800. This included an annual premium of R13,200 paid on 1 November 20.8.
    • Adjustment: Decrease in prepaid insurance (asset) by R13,200.
18. The consumable stores on hand on 1 March 20.8 for R2,920 was not reversed. Make the correction.
    • Adjustment: Decrease in consumable stores (asset) by R2,920.
19. Partner Zel’s personal insurance of R750 was debited to the insurance account.
    • Adjustment: Decrease in equity by R750.
20. Paid the rates deposit of R7,800 to the municipality.
    • Expenses: Decrease in cash (bank account) by R7,800.

Summary of Adjustments

• Total Income: R5,500 + R4,248 + R120,000 - R950 + R15,000 - R65,000 = R78,798
• Total Expenses: R1,472 + R1,398.40 + R12,000 + R4,200 + R7,800 + R540 + R2,920 + R750 = R30,080.40
• Net Effect on Equity: Total Income - Total Expenses = R78,798 - R30,080.40 = R48,717.60