Question

The following information relates to Ramatla CC for the year ended 30 September 2017:
1. R80 000 loan was granted to Liseho, a member of the CC on 1 May 2017. Interest is calculated at 10% per annum and is capitalised at the end of the financial period. The loan is unsecured and immediately callable.
2. Investments consist of:
• 30 000 ordinary shares in Naleli Ltd, purchased on 1 April 2015 for R50 000. On 30 September 2017, the fair value of shares held in Naleli Ltd was determined at R90 000. These shares were purchased for speculative purposes.
• 25 000 ordinary shares in Sizwe-Sethu (Pty) Ltd purchased at a cost of R55 000. On 30 September 2017, these shares were valued at R40 000.
• Fixed deposit of R50 000 at BASA Bank made on 31 December 2013 for 60 months at 12% interest per annum.

Which of the following alternatives represents the correct amount to be disclosed as other financial assets in the current assets section of the statement of financial position of Ramatla CC as at 30 September 2017?

1. R173 333
2. R220 000
3. R222 667
4. R223 333

Answer 1

Answer:

Option (4). R223,333 is the correct answer.

Explaination:

Other current assets are the once which are assets but not easily available.

Like the shares current value, loan maturity value and not the loan amount as it is cash and current.

So, R90000 + R40000 + R93333 (loan maturity at 45 months)

= R223,333