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Question: 1. The business purchased a building for R121 400. 2. The total trade and salary payable accounts are R134 100 and R24 600, respectively. 3. The business’s cash at the end of the year was R12 950 4. The mortgage note payable for the property that the business owns is R101 100 5. The trade receivable for the business were R20 100 6. The store has merchandise inventory of R20 150 7. Mr. Brown originally invested R68 600 capital in the business 8. The business paid R56 800 for advertising in advance and classified the account as prepaid advertising 9. The business owns land that is worth R97 000 Required a) Identify and classify the assets the business has as of the end of the month, if any, as either current or non-current assets. (12 marks)
To identify and classify the assets of the business as of the end of the month, we need to differentiate between current and non-current assets. **Current Assets:** 1. **Cash** - R12 950 2. **Trade Receivables** (Accounts Receivable) - R20 100 3. **Merchandise Inventory** - R20 150 4. **Prepaid Advertising** - R56 800 **Total Current Assets:** R12 950 + R20 100 + R20 150 + R56 800 = R110 000 **Non-Current Assets:** 1. **Building** - R121 400 2. **Land** - R97 000 **Total Non-Current Assets:** R121 400 + R97 000 = R218 400 **Summary:** - **Current Assets:** - Cash: R12 950 - Trade Receivables: R20 100 - Merchandise Inventory: R20 150 - Prepaid Advertising: R56 800 - **Non-Current Assets:** - Building: R121 400 - Land: R97 000 This gives a total of 7 assets identified and classified into current and non-current categories.
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