Reference no: EM132642968

Question - This question consists of three short questions:

1. J Small decided to buy and sell goods from his garage after he lost his job at the end of April 2019. During May 2019 Small purchased goods to the value of R54 000, one third of which was sold for R38 000 during May 2019. Distribution and administration expenses amounted to R3 000 and electricity amounted to R800. Show workings to calculate the profit for the month of May 2019.

2. Quick Deliveries began business to deliver fast food to customers on 1 March 2017. Two delivery motor bikes were purchased for R30 000 each. The financial year end of the entity is 28 February of every year and depreciation on the motor bikes is calculated at 30% per year according to the diminishing balance method. On 30 April 2018 one of the motor bikes was involved in an accident and was completely written off. Miraculously no one was hurt. R9 500 was received from the insurance company. Show workings to calculate the profit or loss on scrapping the motor bike.

3. Fed Ltd has the following authorised share capital: Authorised: 900 000 Ordinary shares 500 000 12% Preference shares

The issued share capital at 31 December 2019 is as follows: 400 000 Ordinary shares at R1,00 each, and 200 000 12% Preference shares at R2, 00 each

Of the issued share capital, the following shares were issued on 30 June 2019 and have been correctly recorded: 100 000 Ordinary shares at R1,00 each, and 50 000 12% Preference shares of R2,00 each

On 30 November 2019 directors declared an ordinary dividend of 50 cents per share payable to all shareholders registered on 31 December 2019

Required -

Show general journal entries to record the declaration of dividends on 30 November 2019 and the subsequent payment of dividends on 31 December 2019.

Show dates on which the journal entries will be recorded. Include a brief narration.