Accounting Paper 1, November 2024, question 1.2(c)

Protea Ridge Ltd, financial year ended 29 February 2024. Balances in the books: Audit fees: R62 000 Sundry expenses: R98 500 Bad debts: R18 400 Packing material used: R49 300 Depreciation: R254 800 Insurance: R105 000 Salaries and wages (including the employer’s contributions): R1 480 000 Directors’ fees (two directors only): R860 000 Adjustments: 1. The monthly insurance premium stayed the same all year. The amount in the books covers insurance paid up to 30 April 2024. 2. One employee was left out of the salaries journal for February 2024. His net salary of R14 450 was paid after deductions of 40% of his gross salary for pension and personal tax. A further R1 750 for medical aid was also deducted. The employer must also pay 8% of his gross salary into the pension fund. 3. The R860 000 is the combined fee of two directors after each one’s monthly fee was increased by R4 000 on 1 August 2023. A third director joined on 1 October 2023 at the same monthly fee as the other two had before their increase.