Law Business Finance-Assign LBF103-3RD Intake
Law Business Finance-Assign LBF103-3RD Intake
Law Business Finance-Assign LBF103-3RD Intake
2024 ASSIGNMENT
Take note:
This assignment consists of five (5) questions.
All questions are compulsory and have to be answered in full.
Compile your answers neatly, preferable making use of spreadsheet software (such as
Microsoft Excel) to set up account columns in which you type your answers.
The assignment counts out of 100 marks
In order to obtain a mark for a transaction entry, all of the following should be in place:
• the accounting entry has to appear under the correct account name;
• the accounting entry has to be correctly allocated to the debit or credit side;
• the date has to be correct; and
• the Rand amount of the entry should be correct.
If any of these aspects is incorrect, no mark will be awarded for the specific answer
provided.
Where specifically indicated that Value Added Tax (VAT) is applicable, a VAT rate of 15%
should be used for calculations.
A comparison of the cashbook and the bank statement for February 2023 reveals the
following:
1. A payment of R11 490.00 received from a client has been incorrectly entered into
the cashbook as R11 940.00.
2. Bank charges in the amount of R580.00 has been debited to your bank
account.
3. A stop order payment of R69 200.00 received earlier from a client has been
reversed by the bank.
4. A trust deposit of R19 112.00 has erroneously been credited to the business
account.
5. Interest of R81.00 on the favourable bank balance has not been entered in the
cashbook.
6. A payment made by the firm in the amount of R1 120.00 has been incorrectly
entered in the cashbook as R1 210.00.
7. A payment received from a client on 29 February 2024 in the cash amount of R19
200.00 is not reflected on the bank statement.
8. A payment in the amount of R2 500.00 made by the firm from the trust account
appears on the business bank statement.
9. An EFT payment in the amount of R99 069.00 received from a client in respect of
your account has not been entered in the cashbook.
(15)
On 2 April 2024, a correspondence firm Joubert Inc has instructed you to collect
R100 000 owed to his client Turkey Investments by Mr Naidoo. The following is the statement
of account:
You are consulted by Mr Combrink who is selling his property to Ms Mona for R4.2 million. He
instructs you to prepare a Sale Agreement. The essential terms of the sale are:
a) Ms Mona will pay a deposit of R1 million on signature.
b) Ms Mona will pay the transfer costs of R340 972.50 of which R278 000 is transfer duty and
R3 805 is for disbursements paid on 25 November 2023 and R59 167.50 is fees incl VAT
c) You will invest the R1 million deposit in an interest-bearing account for Mona benefit.
e) Ms Mona has arranged a bond with First Bank for R3.2 million.
The agreement is signed on the 15th of November 2023.
On 16 November 2023, you receive two payments by EFT from Ms Mona: R1 million deposit
and R340 972.50 for the pro forma costs of transfer. You invest R1 million with ABSA Bank.
On 17 November 2023, you pay the transfer duty to SARS.
On 17 November 2023, you received the rates and taxes figures and Mr Combrink pays R28
200 into the trust account which you immediately pay to the Municipality.
On 19 November 2023, you receive a Bank Guarantee from First Bank for R3.2million.
On 25 November 2023, you receive the Transfer Duty receipt from SARS.
On 26 November 2023 the documents are lodged in the Deeds Office.
On 30 November 2023, the transfer and bonds are registered.
You close the investment account and Absa Bank credits the investment account with R2 365
of which immediately R118.25 is paid to the Fidelity Fund and your firm receives R1 002
246.75 from ABSA Bank.
You receive R3.2 million from First Bank
You account and pay the seller and the buyer. You also transfer the fees to the business
account.
Income
Expenses