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1) Defined contribution plans are post employment benefit under which any entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
Defined benefit plans are post employment plans other than defined contributions plans.
2)The employee is guaranteed a fixed sum of benefit on retirement under the defined benefit plans. An entity is therefore required to make arrangements to ensure the fund created for purpose of meeting future liabilities is solvent. Under the defined contribution plan a contribution gets paid based on the amount contributed by him and the employment inclusive of interest earned or less any losses incurred by the fund.
In this regard when an economy is booming an employee would benefit most under the defined contribution plan. However, exit benefits may be much lower in situations where an economy is not performing well, in which case a defined benefit plan may be more attractive
Wilfykil answered the question on February 11, 2019 at 06:33
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Date posted: February 11, 2019. Answers (1)
- Explain the disclosure requirements for contracts in progress at the end of the reporting period in accordance with International Accounting Standard (IAS) 11, Construction Contracts.(Solved)
Explain the disclosure requirements for contracts in progress at the end of the reporting period in accordance with International Accounting Standard (IAS) 11, Construction Contracts.
Date posted: February 11, 2019. Answers (1)
- Explain two methods of accounting for construction contracts.(Solved)
Explain two methods of accounting for construction contracts.
Date posted: February 11, 2019. Answers (1)
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Date posted: February 11, 2019. Answers (1)
- Three firms of accounts decided to amalgamate into a new firm Cheloti Gusera Kandie & Co. with effect from 1 April 1999. Until 31 March...(Solved)
Three firms of accounts decided to amalgamate into a new firm Cheloti Gusera Kandie & Co. with effect from 1 April 1999. Until 31 March 1999 Apopo. Cheloti and Chuma were partners in Apopo Cheloti & Co. sharing capital and profits equally. Guserwa. Kurgat and
Ochieng were partners in Guserwa & Co. sharing capital and profits in the ratio 4:4:1. Kandie was a sole practitioner.
The balance sheets of the firms as at 31 March 1999 were as follows:
Date posted: February 11, 2019. Answers (1)
- Maina and Ojara have been in partnership for a number of years sharing profits in the ratio 3:2. Because of the present difficult economic situation...(Solved)
Maina and Ojara have been in partnership for a number of years sharing profits in the ratio 3:2. Because of the present difficult economic situation in the country, it has been agreed that in the period ended 30 April 2000, no salaries will be paid to the partners and no drawings will be made either. Interest has been credited to the partners in respect of their capital accounts. They decided to turn the partnership into a company on 30 April 2000, with its accounts being made up to 30 April each year. They decided that they would not open a separate set of accounts on 30 April 2000, but would continue to record the transactions of the business in the partnership books.
The trial balance extracted by the accountant, after he had computed the profit for the period ended 30 April 2000 and the year ended 30 April 20001, was as follows:
Required:
(a). Prepare the Realisation and Capital Accounts of Maina and Ojaro to record the dissolution of the partnership.
(b). Prepare for Maoja Limited the income statement for the year ended 30 April 2001 and the balance sheet at that date in conformity with Kenya Companies Act and the International Accounting Standards. Do not prepare the statement of changes in equity – deal with dividends proposed and paid in the income statement. Ignore deferred tax.
Date posted: February 11, 2019. Answers (1)
- Emojong, Barmoi and Kimani have been partners sharing profits and losses in the ratios 2:2:1. Accounts have been prepared on an annual basis to 31...(Solved)
Emojong, Barmoi and Kimani have been partners sharing profits and losses in the ratios 2:2:1. Accounts have been prepared on an annual basis to 31 December of each year Emojong the only active partner, died on 31 May 2002 and the remaining partners decided to cease business from that date. The assets are to be realized, outstanding debts paid and the remainder to be shared by the partners (including the executors of Emojong’s estate) in an equitable manner, distributions of cash being made as soon as possible.
A balance sheet prepared as at 31 May 2002 revealed the following position
Date posted: February 11, 2019. Answers (1)
- Ali and Bali are in partnership trading as A and B Retailers. Similarly, Cheche and Dunga are in partnership trading as C and D Traders....(Solved)
Ali and Bali are in partnership trading as A and B Retailers. Similarly, Cheche and Dunga are in partnership trading as C and D Traders. It was mutually agreed that as at 1 January 2004, the partnership businesses be amalgamated into one firm, ABC and D Enterprises. The profit and loss sharing ratios of the partners both in the old and new partnership were as follows:
Date posted: February 11, 2019. Answers (1)
- Jembe and Panga were sole traders manufacturing farm implements. On 31 March 2004, they amalgamated and traded as partners sharing profits and losses in the...(Solved)
Jembe and Panga were sole traders manufacturing farm implements. On 31 March 2004, they amalgamated and traded as partners sharing profits and losses in the ratio of 3:2. One year later on 31 March 2005, they converted the partnership into a limited liability company called Shamba Ltd.
No. adjustments have been made to record the amalgamation and conversion but the balance sheets for the sole traders as at 31 March 2004 and the partnership as at 31 March 2005 were as follows:
Date posted: February 8, 2019. Answers (1)
- Kuni and Moto were partners in a business of logging and saw milling sharing profits and
losses equally. The partnership balance sheet as at 31 December...(Solved)
Date posted: February 8, 2019. Answers (1)
- A and B Advocates and M and N Advocates were practicing firms of advocates. On 1 January 2006, they agreed to amalgamate the partnerships into...(Solved)
A and B Advocates and M and N Advocates were practicing firms of advocates. On 1 January 2006, they agreed to amalgamate the partnerships into one firm Able and Mine Advocates. The accounts of the separate partnerships have been prepared annually to 31
December.
The agreed profit and loss sharing ratios in the old and new firms were as follows
Date posted: February 8, 2019. Answers (1)
- List and briefly explain five attributes of reliable financial statements as promulgated in the IFRSs(International Financial Reporting Standards) framework.(Solved)
List and briefly explain five attributes of reliable financial statements as promulgated in the IFRSs(International Financial Reporting Standards) framework.
Date posted: February 8, 2019. Answers (1)
- Distinguish between relevance and reliability in the context of IFRSs(International Financial Reporting Standards) Framework.
(Solved)
Distinguish between relevance and reliability in the context of IFRSs(International Financial Reporting Standards) Framework.
Date posted: February 8, 2019. Answers (1)
- Ali, Baba and Cheche were in partnership sharing profits and losses in the ratio 2:2:1 respectively. Following serious disagreement, the partners decided to dissolve the...(Solved)
Ali, Baba and Cheche were in partnership sharing profits and losses in the ratio 2:2:1 respectively. Following serious disagreement, the partners decided to dissolve the partnership. The proceeds from sale of assets were to be paid to the individual partners after all expenses and liabilities had been paid.
The balance sheet as at 30 September 2007 when the partners made the decision to dissolve the partnership was as follows:
Required:
a) Briefly explain the rule in Garner Vs Murray.
b) A statement showing how cash realized would be distributed to the partners.
c) Realization account, cash at bank account and capital accounts to close off the books of the
partnership.
Date posted: February 8, 2019. Answers (1)
- Meme, Noni and Zenah are partners sharing profits and losses in the ratio 3:2:1 respectively, after allowing for interest on fixed capitals t the rate...(Solved)
Meme, Noni and Zenah are partners sharing profits and losses in the ratio 3:2:1 respectively, after allowing for interest on fixed capitals t the rate of 5% per annum. The partners prepare their partnership accounts annually to 30 September.
The balance sheet of the partnership as at 31 March 2008 was as follows:
Date posted: February 8, 2019. Answers (1)
- X and Y are partners with equal capital contributions in a wholesale business and sharing profits and losses among X,Y and Z in the ratio...(Solved)
X and Y are partners with equal capital contributions in a wholesale business and sharing profits and losses among X,Y and Z in the ratio of 2:2:1respectively. The partners however disagreed after six months of operation and dissolved the partnership on 30th November 2009. No adjustment has been made to record the amalgamation. The following statements of financial position as at 31st May 2009 and 30th November 2009 are provided.
Date posted: February 8, 2019. Answers (1)
- Michael and Stella were in partnership sharing profits and losses equally until 30 April 2011 when they decided to convert the partnership into a limited...(Solved)
Michael and Stella were in partnership sharing profits and losses equally until 30 April 2011 when they decided to convert the partnership into a limited company, Michelle Ltd. The company was registered immediately
The following trial balance was extracted on 30 April 2012; one year after the conversion
Date posted: February 8, 2019. Answers (1)
- Able, Patient and Hastine were in partnership sharing profits and losses in the ratio of 5:3:2 respectively. Due to irreconcilable differences they agreed to dissolve...(Solved)
Able, Patient and Hastine were in partnership sharing profits and losses in the ratio of 5:3:2 respectively. Due to irreconcilable differences they agreed to dissolve the partnership. Any realisation of assets was distributed to the partners on realization after all expenses and liabilities were paid.
The following is the statement of financial position as at 31 August 2012 when the resolution to dissolve the partnership was effected
Required;-
(i) Statement of cash distribution to the partners.
(ii) Realization account,
(iii) Bank account.
(iv) Partners' capital accounts.
Date posted: February 8, 2019. Answers (1)
- Alice and Benard Advocates and Maneno and Neno Advocates were practicing firms of Advocates. On 1 July 2012, they agreed to amalgamate their partnership businesses...(Solved)
Alice and Benard Advocates and Maneno and Neno Advocates were practicing firms of Advocates. On 1 July 2012, they agreed to amalgamate their partnership businesses into one firm and called it Abliman advocates. The accounts of the separate partnerships have been prepared annually to 30 June 2012.
The agreed profit and loss sharing ratios in the old and new firms are as follows:
Date posted: February 8, 2019. Answers (1)
- Kamili Ltd leased a machine from Super Machines Ltd. The terms of the lease were as follows:
(Solved)
Kamili Ltd leased a machine from Super Machines Ltd. The terms of the lease were as follows:
Date posted: February 8, 2019. Answers (1)