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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 \( 60 \% \) 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 \( R 5500 \). 2. Provision for bad debts of R3 200 must be reduced to R2 900. 3. Bought packing materials on credit for R1 600 less \( 8 \% \) tade discount. 4. Paid the creditor (see No. 3) by EFT the amount owing less \( 5 \% \) discount. 5. Debtor, J. Mkhize, deposited an amount of R4 248 after a discount of \( 11,5 \% \) 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 \( 10 \% \) below the cost price as the stock is now old. 10. Dehtor, J. Mshala, claimed an allowance of \( 15 \% \) 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 \( R 750 \) was debited to the insurance account. Paid the rates deposit of R7 800 to the municipality.

Ask by Hills Alexander. in South Africa
Mar 15,2025

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**Transaction Analysis for ZT Traders** 1. **Received rent:** Increased cash by R5,500. 2. **Reduced bad debts:** Decreased provision by R300, increasing profit. 3. **Purchased packing materials:** Increased packing materials by R1,472. 4. **Paid creditor:** Decreased cash by R1,398.40. 5. **Received payment with discount:** Increased cash by R4,248. 6. **Partner Zel took goods:** Decreased inventory by R5,000. 7. **Partner Tees withdrew salary:** Decreased cash by R12,000. 8. **Transferred balance to capital:** Increased capital by R45,000. 9. **Wrote down trading stock:** Decreased inventory by R5,625. 10. **Allowed allowance to debtor:** Decreased debtors by R540. 11. **Transferred creditor to debtors:** Decreased creditors by R500. 12. **Wrote off equipment depreciation:** Decreased equity by R4,200. 13. **Corrected credit sale error:** Decreased sales by R950. 14. **Transferred gross profit:** Increased equity by R120,000. 15. **Allocated interest to Zel:** Increased equity by R15,000. 16. **Divided profit to Tees:** Decreased equity by R65,000. 17. **Adjusted insurance:** Decreased prepaid insurance by R13,200. 18. **Corrected consumable stores:** Decreased consumable stores by R2,920. 19. **Debited personal insurance:** Decreased equity by R750. 20. **Paid rates deposit:** Decreased cash by R7,800. **Summary:** - **Total Income:** R78,798 - **Total Expenses:** R30,080.40 - **Net Effect on Equity:** R48,717.60

Solution

To analyze the transactions for ZT Traders, we will categorize each transaction under the appropriate headings, such as "Income," "Expenses," "Assets," "Liabilities," and "Equity." We will also provide calculations where necessary. ### 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 = \( R1,600 \times 0.08 = R128 \) - Net cost = \( R1,600 - R128 = R1,472 \) - **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 = \( R1,472 \times 0.05 = R73.60 \) - Amount paid = \( R1,472 - R73.60 = R1,398.40 \) - **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 \( x \). - \( x - (x \times 0.115) = R4,248 \) - \( x \times 0.885 = R4,248 \) - \( x = \frac{R4,248}{0.885} \approx R4,800 \) - **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 = \( \frac{R90,000}{1.6} = R56,250 \) - 10% below cost = \( R56,250 - (R56,250 \times 0.10) = R50,625 \) - **Adjustment:** Decrease in inventory (asset) by \( R56,250 - R50,625 = R5,625 \). 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 = \( R3,600 \times 0.15 = R540 \) - **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 This analysis provides a comprehensive view of the transactions and their impact on the financial statements of ZT Traders.

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The Deep Dive

Did you know that partnerships like ZT Traders often face unique challenges when managing finances compared to sole proprietorships or corporations? Partnerships usually mean multiple stakeholders with different contributions and withdrawals. This can complicate financial records, but good accounting practices ensure transparency among partners and enable effective decision-making. Maintaining accurate records of each partner’s transactions helps prevent conflicts and keeps the partnership running smoothly! When dealing with transactions in a partnership, one common mistake is failing to properly document withdrawals and contributions by partners. This can result in inaccurate capital accounts or mismatched balances during financial reviews. Always ensure that any withdrawals, salaries, or transfers are clearly stated and recorded to maintain clarity and avoid future disputes! Keeping an up-to-date ledger can save a lot of head-scratching down the line. Happy accounting!

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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 \( 60 \% \) 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 \( R 5500 \). 2. Provision for bad debts of R3 200 must be reduced to R2 900. 3. Bought packing materials on credit for R1 600 less \( 8 \% \) tade discount. 4. Paid the creditor (see No. 3) by EFT the amount owing less \( 5 \% \) discount. 5. Debtor, J. Mkhize, deposited an amount of R4 248 after a discount of \( 11,5 \% \) 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 \( 10 \% \) below the cost price as the stock is now old. 10. Dehtor, J. Mshala, claimed an allowance of \( 15 \% \) 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 \( R 750 \) was debited to the insurance account. Paid the rates deposit of R7 800 to the municipality.
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