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Khanyisile and Tinyiko are business partners in Ride4Yours, a partnership busin...
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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.
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:
What is the correct amount which must be disclosed as in the statement of changes in equity of Ride4Yours for the year ended 30 June 2023?
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.