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Fac1503 Assignment 2.

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  • Course
  • FAC1503
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  • University Of South Africa

FAC1503 Assignment 2 Calculations/Explanations 1. 4 A trust bank account should never be in overdraft. A debit on a trust creditor account would mean the account is overdrawn which is not permitted In terms of the Rules for the Attorneys’ Profession (the Rules) with reg...

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  • September 5, 2022
  • 4
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

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  • fac1503 assignment 2

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  • University of South Africa
  • FAC1503
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FAC1503 Assignment 2

Calculations/Explanations

1. 4 A trust bank account should never be in overdraft. A debit on a trust creditor account would
mean the account is overdrawn which is not permitted
In terms of the Rules for the Attorneys’ Profession (the Rules) with regard to the transfer of
trust funds from the trust bank account to the business bank account, a legal practice shall
ensure that the balance on its trust bank account shall at any date be equal to or exceed the
total credit balances of the trust creditors in its accounting records.


2. 4 Page 110 in Study guide

3. 4 Trust creditor account balance 7 600
Less: amount earmarked for other matters (2 800)
Amount avaliable 4 800
The transfer is limited to the amount available in the trust
account

4. 1 Page 126 & 129 in study guide

5. 1
100% of section 78(2)(A) interest must be paid to the
Legal practitioner's Fidelity Fund (page 126 in study guide)

6. 2
It should bear the Trust creditor's name, The relevant section and the name of the bank

7. 4 Investments made in accordance with section 78 are the only trust creditors’ accounts
thatmay reflect debit balances (Page 137 in study guide)


8. 3 95% of 86(4) interest must be paid to trust creditor and 5% to the Fidelity Fund
Trust creditor (2 700 x 95%) 2 565
Legal Practitioners Fidelity Fund 135

9. 1 S Monte – section 86(4) trust investment – Unit Bank
1 June 2018 Trust bank 50 000 31 Aug 2018 Trust Bank
31 Aug 2018 Interest 2 700

52 700

The question asked for the August transactions

10. 3 The 10% is limited to R1 000 per collection

11. 3 Sheriffs fees are exempt (Page 31 in study guide)

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