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- Maxwell is a sole proprietor operating business in Juja and the following trial balance relates to his business for the year ended 31st December, 2013.
Additional...(Solved)
Maxwell is a sole proprietor operating business in Juja and the following trial balance relates to his business for the year ended 31st December, 2013.
Additional information
1. Stock at 31/12/2013 amount to Kshs 3,000,000
2. Motor vehicle expenses unpaid amount to Kshs 300,000.
3. A quarter of telephone bills relate to the year 2014.
4. Un paid electricity and water amount to Ksh 100,000
5. Depreciation on motor vehicles and fixtures is at 20% and 10% respectively on cost.
6. Salary and rent prepaid were Kshs 200,000 and Kshs 100,000 respectively.
7. Interest on loan was outstanding as at 31st December 2013.
Required
i. Income Statement for the year ended 31/12/2013.
ii. Balance sheet as at 31/12/2013.
Date posted: August 17, 2021. Answers (1)
- The following trial balance was extracted from books of Simpson, a sole trader as at 31st Dec 2013.
Additional information
1) Stock as at 31st Dec 2013...(Solved)
The following trial balance was extracted from books of Simpson, a sole trader as at 31st Dec 2013.
Additional information
1) Stock as at 31st Dec 2013 was valued at Sh. 1,760,000
2) Depreciation on fixtures and fittings and motor vehicle is provided at 5% and 10% p.a. on cost respectively.
3) Included in sales are goods for Sh. 13,000 ordered by Mr. Patel in the month of April. He has never communicated though the goods have been included in the closing stock.
4) Rates prepaid as at 31st Dec 2013 amounted to Sh. 25,600.
5) Unexpired insurance as at 31st Dec 2013 was Sh. 4,000.
6) Provision for bad debts as at 31st Dec 2013 is to be made at 2.5 % of net trade debtors.
Required
a) Trading and profit and loss account for year ended 31st Dec 2013
b) Balance sheet as at 31st Dec 2013.
Date posted: August 17, 2021. Answers (1)
- Describe an Income Statement.(Solved)
Describe an Income Statement.
Date posted: August 17, 2021. Answers (1)
- A company depreciates its plant at the rate of 20% p.a. straight line method for each month of ownership.
On 1st January 1999 bought plant costing...(Solved)
A company depreciates its plant at the rate of 20% p.a. straight line method for each month of ownership.
On 1st January 1999 bought plant costing Sh. 9,000. On 1st October 1999 also bought plant costing Sh. 6,000. On 1st July 2001 bought plant costing Sh. 5,500.
On 30th September 2002, the plant that had been bought for Sh. 9,000 on 1st January 1999 was sold for Sh. 2,750.
Required:
(a) Plant A/c
(b) Provision for depreciation A/c
(c) Disposal A/c
Date posted: August 17, 2021. Answers (1)
- XYZ Ltd has three machines in operation. Machine A was bought on 1st January 2013 at Ksh 250,000 and the other two machines; machine B...(Solved)
XYZ Ltd has three machines in operation. Machine A was bought on 1st January 2013 at Ksh 250,000 and the other two machines; machine B and machine C were bought on 1st January 2014 at Ksh 350,000 and Ksh 300,000 respectively. The business has a policy to depreciate all non current assets at 15% using straight line basis of depreciation. On 1st July 2014, XYZ Ltd disposed off the machine bought on 1st January 2013 for Ksh 188,000. Assuming that the financial year of XYZ Ltd ends on 31st December.
Prepare the following accounts relating to financial year ending 31st December 2014 only.
i. Machine Account
ii. Provision for depreciation Account
iii. Disposal Account
Date posted: August 17, 2021. Answers (1)
- A business firm started trading on 1st January in year 2013. On 1st April, it bought a new motor vehicle costing Ksh 400,000 and later...(Solved)
A business firm started trading on 1st January in year 2013. On 1st April, it bought a new motor vehicle costing Ksh 400,000 and later on 1st July it bought another motor vehicle costing Ksh 550,000. The financial year for the business ends on 31st December and it has a policy of depreciating motor vehicles at 20% p.a. using straight line basis.
Required:
i. Motor vehicle account as at 31st December 2013
ii. Provision for depreciation account as at 31st December 2013
iii. Income statement extract for year ending 31st December 2013
iv. Cash/ bank account extract
Date posted: August 17, 2021. Answers (1)
- A machine is expected to produce 10,000 electrical gadgets in its useful life. It has a cost of Sh. 6,000 and has an expected salvage...(Solved)
A machine is expected to produce 10,000 electrical gadgets in its useful life. It has a cost of Sh. 6,000 and has an expected salvage value of Sh. 1,000. If in the first year a total of 1,500 gadgets are produced, what is the depreciation for the year?
Date posted: August 17, 2021. Answers (1)
- Describe the Unit of Output Method of calculating depreciation.(Solved)
Describe the Unit of Output Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- Describe the Depletion Unit Method of calculating depreciation.(Solved)
Describe the Depletion Unit Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- Describe the Machine Hour Method of calculating depreciation.(Solved)
Describe the Machine Hour Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- Describe the Sum of Years Digits Method of calculating depreciation.(Solved)
Describe the Sum of Years Digits Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- Describe the Revaluation Method of calculating depreciation.(Solved)
Describe the Revaluation Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- A company purchased a machine at a cost of Sh. 450,000. The estimated life of this machine is 5 years. Using the sum of years...(Solved)
A company purchased a machine at a cost of Sh. 450,000. The estimated life of this machine is 5 years. Using the sum of years digits determine its depreciation.
Date posted: August 17, 2021. Answers (1)
- Calculate the reducing balance depreciation charged at 20% for the first 3 years on a machine bought for Sh. 10,000.(Solved)
Calculate the reducing balance depreciation charged at 20% for the first 3 years on a machine bought for Sh. 10,000.
Date posted: August 17, 2021. Answers (1)
- Define the Reducing Balance Method of calculating depreciation.(Solved)
Define the Reducing Balance Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- Describe the Straight Line Method of calculating depreciation.(Solved)
Describe the Straight Line Method of calculating depreciation.
Date posted: August 17, 2021. Answers (1)
- A Machine was bought for Sh. 220,000 and it was estimated to be in operation for 4 years with a residue value of Sh. 20,000....(Solved)
A Machine was bought for Sh. 220,000 and it was estimated to be in operation for 4 years with a residue value of Sh. 20,000. Calculate the depreciation expense for each year.
Date posted: August 17, 2021. Answers (1)
- A business firm that had previously written of bad debts amounting to Ksh 34,000 now recovers the same amount that was paid by cheque. In...(Solved)
A business firm that had previously written of bad debts amounting to Ksh 34,000 now recovers the same amount that was paid by cheque. In the same financial year the debtor account amount to Ksh 270,000 and out of this the firm will write off bad debts amounting Ksh 20,000.
Required:
i. Debtors Account
ii. Bad debts (written off) Account
iii. Bad debts recovered Account
iv. Bank Account
Date posted: August 17, 2021. Answers (1)
- XYZ Ltd started trading on 1 January 2013. The following are some of the bad debts that were written off during two years that XYZ...(Solved)
XYZ Ltd started trading on 1 January 2013. The following are some of the bad debts that were written off during two years that XYZ Ltd has been trading.
On 31 December 20x3 debtors balance was Ksh 4,050,000. Provision for bad debts was maintained at 3%.
On 31 December 20x4 debtors balance increased to Ksh 4,730,000. Provision for bad debts was maintained at 5%.
Required:
i. Debtors Account for the two years
ii. Bad debts Account for the two years
iii. Provision for bad debts Accounts for the two years
iv. Income statement Extract for the two years
v. Balance sheet Extract for the two years
Date posted: August 17, 2021. Answers (1)
- The debtors account for ABC Ltd was Ksh 500,000 by end of the year 2013. Bad debts amounting to Ksh 50,000 were written off from...(Solved)
The debtors account for ABC Ltd was Ksh 500,000 by end of the year 2013. Bad debts amounting to Ksh 50,000 were written off from this balance. The specific provision stood at Ksh 10,000 while the general provision was maintained at 5% on the debtors balance.
Required:
i. Debtors Account
ii. Bad debts Account
iii. Provision for bad debts Accounts
iv. Income statement Extract
v. Balance sheet Extract
Date posted: August 17, 2021. Answers (1)