- The following trial balance was extracted from the books of Mali Ltd, a manufacturing company, as at 31
December 2010
...(Solved)
The following trial balance was extracted from the books of Mali Ltd, a manufacturing company, as at 31
December 2010
Sh. "000" Sh. "000"
Inventories as at 1 January 2010:
Raw materials 21,000
Finished goods 38,900
Work in progress 13,500
Wages:
Direct 180,000
Factory 145,000
Sale of scrap raw materials 35,000
Royalties 7,000
Carriage inwards 3,500
Purchases of raw materials 370,000
Machinery (Cost sh. 280,000,000) 230,000
Computers (Cost sh. 20,000,000) 12,000
General factory expenses 31,000
Lighting 7,500
Factory power 13,700
Sales 1,000,000
Administrative salaries 44,000
Sales representative salaries 30,000
Commission on sales 11,500
Rent 12,000
Insurance 4,200
General administrative expenses 13,400
Bank charges 2,300
Discount allowed 4,800
Carriage outwards 5,900
Accounts payables 64,000
Ordinary share capital (sh. 10 each) 360,000
10% Debentures 60,000
Buildings 111,000
Accounts receivables 142,300
Balance at bank 76,800
Cash in hand 1,500
Allowance for doubtful debts 6,500
Retained profits (1 January 2010) 10,300
Debenture interest 3,000
1,535,800 1,535,800
Additional information
1. Rent, insurance and light expenses are to be apportioned between factory, office and distribution as follows:
Factory Office Distribution
% % %
Rent 70 30 -
Insurance 60 10 30
Lighting 80 20 -
2. Allowance for doubtful debts is to be maintained at 5% and bad debts of sh. 3,500,000 are to be written off.
3. Inventories as at 31st December 2010 were valued as follows:
Sh.
Raw materials 14,000,000
Finished goods 42,000,000
Work-in-progress 15,500,000
4. Accrued rent and general administrative expenses as at 31 December 2010 amounted to sh. 1,200,000 and sh. 1,500,000 respectively.
5. Prepaid insurance as ta 31 December 2010 amounted to sh. 360,000
6. A provision for corporation tax amounting to sh. 25,340,000 is to be made.
7. Depreciation is to be provided as follows
Asset Rate per annum
Machinery 12.5% on reducing balance basis
Computers 15% on straight line basis
Ignore depreciation on buildings
8. The directors propose to pay a dividend of sh. 0.50 per share
Required:
(a) Manufacturing, trading and income statement for the year ended 31 December 2010.
(b) Statement of financial position as at 31 December 2010
Date posted: October 3, 2022. Answers (1)
- The following assets and liabilities were extracted from the books of Jipemoyo Sport Club as at 31 March:
...(Solved)
The following assets and liabilities were extracted from the books of Jipemoyo Sport Club as at 31 March:
2010 2011
Sh. Sh.
Investment at cost 500,000 400,000
Sports Equipment 60,000 68,000
Furniture 40,000 36,000
Subscription in arrears 18,000 12,000
Subscription in advance 15,000 30,000
Bar Inventory 12,000 22,000
Bar payables 3,000 13,000
Stock of stationary 2,000 1,000
Accrued rates 1,500 2,500
Prepaid insurance 1,400 3,400
The summary of receipts and payments account for the year ended 31 March 2011 was as follows:
Receipts Sh.
Bank balance (1 April 2010) 25,000
Bar takings 360,000
Donations 80,000
Subscriptions 280,000
Income from investment 40,500
Annual dinner sales 140,000
Entry fees 75,000
Proceeds from sale of investment 125,000
1,125,500
Payments
Ground maintenance 40,500
Staff salaries 239,000
Bar payables 120,000
New Equipment 20,000
Subscriptions refunded to members 2,000
Bar man's wages 120,000
Stationary 30,000
Annual dinner costs 80,000
Rates 8,000
Insurance 24,000
Bank balance (31 March 2011) 442,000
1,125,500
1. Included in the subscriptions received during the year of sh. 280,000 is sh. 15,000 being arrears for the year ended 31 March 2010. It is the policy of the club to write off subscriptions arrears owing for more than twelve months.
2. During the year, an investment with cost of sh. 100,000 was sold for sh. 125,000. The clubs accountant recorded only the receipt of proceeds from sale of investment in the books of accounts.
Required:
(i) Bar income statement for the year ended 31 March 2011
(ii) Subscriptions accounts
(iii) Income and expenditure for the year ended 31 March 2011
Date posted: October 3, 2022. Answers (1)
- Enock Safari is a photographer and does not keep a complete set of accounting records. An extract of his receipts and payments for the year...(Solved)
Enock Safari is a photographer and does not keep a complete set of accounting records. An extract of his receipts and payments for the year ended 31 December 2010 was as follows
Sh. 000 Sh. 000
Receipts
Cash in hand (1 January 2010) 3,000
Balance at bank ( 1 January 2010) 420,600
Cash sales 658,000
Credit sales 592,000
rent received from sub-letting 10,400
Sale of Equipment (Book value sh. 6,000) 2,000
Additional capital introduced 30,000
Income tax refund (personal) 5,000
Cash from bank 243,600
259,000 1,705,600
Payments
Purchases for resale 844,000
General expenses 12,000 40,000
rent and rates 59,000
Wages 112,000
personal drawings 130,000
Income tax (personal) 60,000
Cost of new equipment 32,000
Cash withdrawn 243,600
Balance at Bank ( 31 December 2010) 427,000
Cash in hand (31 December 2010) 5,000
259,000 1,705,600
Additional information
1. Inspection of the credit sales invoice books showed that customers owed sh.250,000 on 1 January 2010 and sh.323,600 0n 31 December 2010. The amounts did not include goods withdrawn by Enock Safari for
personal use.
2. Examination of the paid invoices for purchases disclosed trade payables of sh.190,000 as at 1 January 2010 and sh.212,000 as at 31 December 2010.
3. Enock Safari estimated that he had withdrawn goods for his own domestic use which cost sh.5,200 during the year and had not paid for them.
4. As at 1 January 2010, equipment on which depreciation is charged at 5% per annum stood at sh.114,000.
5. Inventory as at 1 January 2010 was valued at sh.190,000 and sh.180,000 as at 31 December 2010.
Required:
(a) Income statement for the year ended 31 December 2010.
(b) Statement of financial position as at 31 December 2010
Date posted: October 3, 2022. Answers (1)
- Alice, Bibianne and Christine have been in partnership for several years sharing profits and losses in the ratio of 2:2:1 respectively after charging interest on...(Solved)
Alice, Bibianne and Christine have been in partnership for several years sharing profits and losses in the ratio of 2:2:1 respectively after charging interest on capital at the rate of 10%
On 1st April 2010, Christine retired from the partnership. Alice and Bibianne agreed to continue with the partnership and to share profits and losses equally after charging interest on capital at the rate of 10% per annum.
For the purpose of retirement of Christine from the partnership, Land and Buildings were revalued at sh. 2,000,000 and furniture and fittings at sh. 3,000,000. Goodwill of the partnership was valued at sh. 1,200,000 on 1st April 2010
The partners agreed that goodwill was to be written off immediately.
The relevant adjustments relating to the above transactions had not been made when the following trial balance as at 30 September 2010 was extracted from the books of the partnership.
Sh. "000" Sh. "000"
Capital
Alice 800
Bibianne 700
Christine 600
Current Accounts
Alice 200
Bibianne 200
Christine 100
Drawings
Alice 180
Bibianne 140
Christine 180
Inventory (30 September 2010) 500
Land and Buildings 1,500
Furniture and fittings 400
Motor vehicles 800
Accounts receivables 470
Accounts payables 200
Prepaid insurance 50
Accrued electricity 20
Bank balance 1,000
Net profit for the year 2,400
5,220 5,220
Additional information
1. Assume the net profit accrued evenly throughout the year
2. Christine agreed to take on her retirement one of the motor vehicles at book value of sh. 400,000 and the balance due to her to be paid in cash
Required:
(a) Income statement for the year ended 30 September 2010
(b) Partner’s current accounts
(c) Partner’s capital accounts
(d) Statement of financial position as at 30th September 2010
Date posted: October 3, 2022. Answers (1)
- Highlight six types of report that could be generated by an accounting package (Solved)
Highlight six types of report that could be generated by an accounting package
Date posted: October 3, 2022. Answers (1)
- Mashariki Enterprises provided the following details of assets and liabilities as at 1st June 2010. The cost details were obtained from the invoice files while...(Solved)
Mashariki Enterprises provided the following details of assets and liabilities as at 1st June 2010. The cost details were obtained from the invoice files while others were obtained verbally from the managing director who was the proprietor
Asset Cost/Valuation Date of acquisition Depreciation
Sh. "000"
Equipment and furniture 2,300 1-Sep-2008 10 % per annum
Buildings 26,000 1-Jan-2005 5 % per annum
Land 3,400 1-Jan-2005 nil
Motor Vehicles 1,600 1-May-2010 20 % per annum
Bank balances 1,000
Trade receivables 1,380
Opening inventory 1,800
Prepaid insurance 450
Cash 120
Trade payables 1,100
Bank Loan 2,400
Accrued sundry expenses 2,600
The policy of the firm is to provide full depreciation in the year of purchase and non in the year of disposal, using the straight-line method
The following is a summary of receipts and payment for the year ended 31st May 2011
Bank Cash Bank Cash
Sh. "000" Sh. "000" Sh. "000" Sh. "000"
Sale of Equipment 200 Rent 2,000
Receipts from debtors 13,000 Donations 250
Sales 4,150 Supplier of goods 5,000
Furniture 900
Salaries and wages 1,400
Stationary 300
Motor vehicles 400
Bank loan 600
Drawings 200
Sales commission 150
Insurance 1,200
Bank charges 120
Sundry expenses 2,800
Interest on loan 240
Additional information
1. The following balances were available as at 31 May 2011
• Prepaid insurance sh. 250,000
• Accrued salaries Sh. 150,000
2. Equipment with a cost of Sh. 300,000 was disposed of during the year
3. Closing inventory was valued at sh. 1,200,000
4. Trade receivables as at 31st May 2011 were sh. 1,150,000 while trade payables were sh. 1,250,000
Required:
(a) Income statement for the year ended 31 May 2011
(b) Statement of financial position as at 31 May 2011
Date posted: October 3, 2022. Answers (1)
- (a) The following information relates to the property, plant and Equipment of Annex construction Limited as at
1
st October 2010:
Asset Cost Accumulated Depreciation Estimated useful life...(Solved)
(a) The following information relates to the property, plant and Equipment of Annex construction Limited as at
1
st October 2010:
Asset Cost Accumulated Depreciation Estimated useful life (years)
Sh. "000" Sh. "000" Sh. "000"
Freehold Land 60,000 - -
Buildings: Factory 150,000 30,000 50
:Office premises 180,000 30,000 45
Plant and Machinery 475,000 365,000 10
Computers 295,000 85,000 4
Motor Vehicles 50,000 35,000 4
Furniture and Fittings 100,000 40,000 5
Additional information
1. None of the assets was fully depreciated as at the end of the year
2. The following assets were acquired on 1st April 2011
Sh. “million”
Plant and Machinery 100
Computers 8
Motor Vehicles 28
3. On 1st April 2011, Motor vehicles with a cost of sh. 6,000,000 were disposed of for sh. 2 million. The cumulative depreciation on the Motor vehicles as at 1st October 2010 was sh. 5 million.
4. Freehold Land and Buildings were revalued on 2nd October 2010 as follows
Sh. “million”
Freehold Land 400
Buildings: Factory 240
: Office Premises 150
5. Depreciation is provided on a prorate basis from the date of acquisition using the straight-line method
6. Assume nil residue value for the assets
Required:
(a) The company’s property, Plant and Equipment movement schedule for the year ended 30th September 2011
(b) Define an intangible asset
(c) Outline four ethical issues that guide accountants while executing their duties
Date posted: October 3, 2022. Answers (1)
- Chungala limited is a public company incorporated to trade on recycled products. The accountant presented the finance manager the following financial statements for the years...(Solved)
Chungala limited is a public company incorporated to trade on recycled products. The accountant presented the finance manager the following financial statements for the years 2010 and 2011
Sh. "millions"
Sales 9,348
Cost of sales (5,688)
Gross profits 3,660
Distribution costs (1,128)
Administrative expenses (1,200)
Operating profit 1,332
Gain on disposal 20
interests paid (60)
Profit before tax 1,292
Income tax expense (304)
Profit after tax 988
Dividends (300)
Retained profits for the year 688
Retained profits brought forward 1616
Retained profits carried forward 2,304
Chungana Ltd
Statement of financial position as at 30 September
2011 2010
Sh. "million" Sh. "million"
Non-Current Assets
Plant and Equipment 6,400 5,200
Motor Vehicles 2,400 1,600
8,800 6,800
Current Assets
Inventory 300 240
Accounts receivables 124 100
Bank balances 216 140
640 480
Total assets 9,440 7,280
Equity and Liabilities
Ordinary Share Capital (sh. 10 each) 5,200 4,800
Share premium 880 320
Retained profits 2,304 1,616
8,384 6,736
Non-Current Liabilities
Long term loan 320 80
Current Liabilities
Accounts payables 96 56
Taxation 480 320
proposed dividends 160 88
736 464
Total capital and Liabilities 9,440 7,280
Additional Information
1. During the year, plant worth sh. 2,200,000 was acquired and Motor vehicles which had cost sh. 200,000,000 were disposed of.
2. The book values of the plant and Equipment and Motor Vehicles comprise
Plant and Equipment Motor Vehicles
2010 2012 2010 2012
Sh. Million Sh. Million Sh. Million Sh. Million
Cost 6,120 7,700 1,920 2,880
Accumulated depreciation (920) (1,300) (320) (480)
Net Book Value 5,200 6,400 1,600 2,400
3. Administration expenses comprise
Sh. Million
Depreciation Plant and equipment 840
Motor Vehicles 300
Others 60
1,200
4. Gain on disposal comprises
Sh. Million
Gain on disposal of Plant and equipment 40
Loss on disposal of Motor Vehicles (20)
20
Required:
Statement of cash flows for the year ended 30th September 2011 in conformity with the requirements of
International Accounting Standard (IAS 7), “Statement of Cash flows”
Date posted: October 3, 2022. Answers (1)
- The following trial balance was extracted from the books of Malezi Ltd as at 31st October 2011:
...(Solved)
The following trial balance was extracted from the books of Malezi Ltd as at 31st October 2011:
Sh. "000" Sh. "000"
Buildings (Cost) 10,000
Plant and Equipment (Cost) 1,400
Motor Vehicles (Cost) 320
Accumulated Depreciation (1 November 2010)
Buildings 4,000
Plant and Equipment 480
Motor vehicles 120
Cash at Bank 100
Inventory (1 November 2010) 2,200
Administrative expenses 2,206
Distribution costs 650
Suspense 1,500
Retained earnings 360
Trade receivables 876
Purchases 4,200
Dividends paid 200
Sales revenue 11,752
Value added Tax (VAT) Payable 1,390
Trade payables 1,050
Share premium 500
Ordinary Shares of sh. 100 each 1,000
22,152 22,152
Additional information
1. Inventory as at 31st October 2011 was valued at sh. 1,600,000
2. Depreciation is to be provided as follows
Assets Rate per annum
Buildings 5 % on straight line
Plant and Equipment 20 % on reducing balance
Motor vehicles 25 % on reducing balance
Depreciation is to be charged to administration expenses
3. The directors do not propose payment of dividends
4. An allowance for bad debts of sh. 76,000 is to be made relating to a customer who was declared bankrupt. A further allowance for doubtful debts of 5 % is to be made with respect to the trade receivables as at 31st October 2011
5. The suspense account of sh. 1,500,000 relates to 10,000 new ordinary shares which were issued at par value of sh. 150 each on 1st October 2011
Required:
(a) Statement of comprehensive income for year ended 31st October 2011
(b) Statement of financial position as at 31st October 2011
Date posted: October 3, 2022. Answers (1)
- The estimates and expenditure details relating to the ministry of Youth and social services for the year
2010/2012 were as follows
Code Details
...(Solved)
The estimates and expenditure details relating to the ministry of Youth and social services for the year
2010/2012 were as follows
Code Details
Original estimates Actual expenditure
Sh. "millions" Sh. "millions"
010 Personal emoluments 288 324
050 House allowances 54 46.8
080 Passage and leave 18 16.2
115 Travelling expenses 79.2 82.8
140 Electricity and water 21.6 23.4
221 Purchase of Equipment 180 144
640 Appropriation-in-Aid 54 43.2
Supplementary estimates authorized during the year were as follows
010 Personal emoluments Sh. 28.8 million (increased)
115 Travelling expenses Sh. 7.2 million (reduced)
Required:
Appropriation account for the year ended 30June 2011, showing the net surplus to be surrendered to the exchequer
Date posted: October 3, 2022. Answers (1)
- In the context of public sector accounting, explain the following terms:
(i) Vote book
(ii) Trust fund
(iii)Capital project fund(Solved)
In the context of public sector accounting, explain the following terms:
(i) Vote book
(ii) Trust fund
(iii)Capital project fund
Date posted: October 3, 2022. Answers (1)
- Outline five components of a computerized accounting system.(Solved)
Outline five components of a computerized accounting system.
Date posted: October 3, 2022. Answers (1)
- Explain three reasons why the amount of cash flows of a business entity might differ from the profits
generated by the business entity during the same...(Solved)
Explain three reasons why the amount of cash flows of a business entity might differ from the profits
generated by the business entity during the same period
Date posted: October 3, 2022. Answers (1)
- Ababu and Babu are partners in a bookshop business sharing profits and losses in proportion of 2/5 and 3/5 respectively. The trial balance extracted from...(Solved)
Ababu and Babu are partners in a bookshop business sharing profits and losses in proportion of 2/5 and 3/5 respectively. The trial balance extracted from the books of the partnership as at 30th April 2012 was as follows:
Sh. Sh.
Capital accounts
Ababu 4,225,000
Babu 2,600,000
Drawings
Ababu 585,000
Babu 520,000
Trade payables 832,000
Office furniture (Net Book Value) 325,000
Accounts receivables 2,632,500
Rent 243,750
Postage and telephone 276,250
Gross profit 4,628,000
Bank 910,000
Salaries and wages 1,706,250
Printing and stationary 80,600
Commission paid 325,000
Insurance 130,000
Motor Vehicles (Net Book Value) 1,680,900
Plant and machinery (net Book Value) 2,275,000
Capital (Chango) 585,000
Current Accounts
Ababu 130,000
Babu 104,000
Cost of sales 5,674,500
Cash 341,250
Inventories (30th April 2012) 812,500
5,674,500
18,648,500 18,648,500
Additional information
1. The partners agreed to admit Chango as a partner on 1 February 2012. Prior to admission, Chango was a
manager in the firm earning a salary of sh. 228,930 per annum which has been accounted for proportionately
2. Chango brought in capital of sh. 585,000 in cash and was thereafter entitled to 1/5th of the firm’s profits. The balance to be shared in the old profit sharing ratio. Chango was to stop receiving salary but was granted a minimum share of profit equal to his salary
3. Chango was also to bring his personal vehicle valued at sh. 325,000 for use in the business
4. Insurance paid in advance and rent outstanding as at 30th April 2012 were sh. 32,500 and sh. 24,050
respectively
5. Bad debts of sh. 32,500 arising before Chango’s admission was to be written off
6. A provision of 1% of outstanding debtors was to be maintained from the date of changes admission
7. Depreciation was to be provided as follows
Asset Rate
Office Equipment 15% on reducing balance
Motor vehicles 20% on book value
Plant and machinery 10% on Book value
8. Partner’s goodwill on admission of Chango’s admission was agreed at sh. 650,000 and is not to be retained in the books
9. No interest was to be allowed on capital or charged on drawings
Required:
(i) Income statement for the year ended 30th April 2012
(ii) Partner’s current accounts
(iii) Partner’s capital accounts
Date posted: October 3, 2022. Answers (1)
- Jitahidi limited was incorporated in the year 2010 and specializes in the manufacturing of electric cables branded “Nyaya”. The following trial balance was extracted from...(Solved)
Jitahidi limited was incorporated in the year 2010 and specializes in the manufacturing of electric cables branded “Nyaya”. The following trial balance was extracted from the books of the company as at 30th April 2012.
Sh. '000' sh. '000'
Inventories (1st May 2011)
Raw materials 6,000
Work in progress 7,000
Finished Goods 8,000
Purchases of raw materials 82,000
Sales 184,700
Trade receivables and payables 9,000 6,000
Bank balance 5,200
Carriage inwards 3,000
Direct Labor 16,000
Provision for unrealized profits 1,600
Electricity and water 9,600
Rates and insurance 5,200
Distribution costs 2,000
Administrative expenses 1,880
Land (cost) 45,000
Buildings (cost) 125,000
Plant and machinery (cost) 20,000
Motor vehicles (cost) 16,000
Equipment (cost) 10,000
Accumulated depreciation (1 May 2011)
Buildings 5,000
Plant and machinery 8,000
Motor vehicles 4,000
Equipment 6,000
15% debentures 8,000
Interest on debentures paid 1,200
Ordinary shares of sh. 20 each 100,000
Share premium 10,000
Retained earnings 38,780
372,080 372,080
Additional information
1. Inventories as at 30th April 2012 were as follows:
Sh.
‘000’
Raw materials 7,200
Work in progress 2,000
Finished goods 9,500
Raw materials included damaged items costing sh. 600,000 which could realize sh. 500,000 after incurring an additional cost of sh. 100,000
2. Sales included goods worth sh. 500,000 sent on sales or return basis to a customer. The customer has not confirmed. The cost price was sh. 300,000 and no record has been made.
3. It’s the policy of Jitahidi limited to transfer the finished goods to trading at cost plus a mark-up of 25%
4. Accrued electricity as at 30th April 2012 amounted to sh. 400,000 while prepaid insurance was sh. 200,000
5. Depreciation is charged on a straight-line basis as follows
Asset Rate per annum
Buildings 2%
Plant and machinery 20%
Motor vehicles 25%
Equipment 20%
6. Costs are allocated as follows
Factory (%) Distribution Costs (%) Administration expenses (%)
• Depreciation
Buildings 80 10 10
Plant and machinery 100 - -
Equipment - 50 50
Motor vehicles - 60 50
• Rates and insurance 60 20 20
• Electricity and water 60 20 20
7. A provision for corporation tax amounting to sh. 14,350,000 is to be made
Required:
Manufacturing account and income statement for the year ended 30th April 2012
Date posted: October 3, 2022. Answers (1)
- (a) Briefly explain why goodwill should be paid under the following circumstances:
(i) By a partner on admission to a partnership.
(ii) To a partner on retirement...(Solved)
(a) Briefly explain why goodwill should be paid under the following circumstances:
(i) By a partner on admission to a partnership.
(ii) To a partner on retirement from a partnership.
(b) Abdi, Bob and Caleb are in partnership sharing profits and losses equally after allowing for interest on capital at 5% per annum to the partners and a salary to Bob of sh.30,000 per month.
The trial balance of the partnership as ta 31 September 2012 was as follows:
Sh. "000" Sh. "000"
Capital accounts: Abdi 3,500
Bob 3,000
Caleb 2,000
Current accounts: Abdi 300
Bob 400
Caleb 300
Drawings: Abdi 400
Bob 500
Caleb 300
Sales 30,000
Inventory (1 October 2011) 4,000
Purchases 20,300
Operating expenses 7,400
Loan: Bob (interest at 10% per annum) 2,000
Caleb (interest at 10% per annum) 3,000
Land 2,000
Buildings 6,000
Plant and Machinery (cost) 8,000
Accumulated depreciation (30 September 2012) 5,000
Accounts receivable/accounts payable 5,000 4,300
Cash at bank 100
53,900 53,900
Additional information:
1. Closing inventory as at 30th September 2012 was valued at sh.3,400,000
2. Interest on partner’s loan had not been paid.
3. Sales included credit sales of sh.700,000 in respect of two items sold on the basis of confirmation by the customer. The items had cost sh.200,000 each.
4. On 1 April 2012, the terms of the partnership agreement were changed. The new terms provided for:
• Profit sharing ratio of 5:3:2 for Abdi, Bob and Caleb respectively.
• Interest on capital at 5% per annum
• Salaries of sh.15,000 per month for Bob and Caleb.
5. For the purpose of the change, goodwill was valued at sh.1,200,000 and was to be written off
immediately while the land and buildings were valued at sh.3,000,000 and sh.7,400,000 respectively.
Required:
(i) Income statement and appropriation account for the year ended 30 September 2012.
(ii) Partner’s current accounts.
(iii) Statement of financial position as at 30 September 2012.
Date posted: September 30, 2022. Answers (1)
- (a) Explain the following terms as used in the context of public sector accounting:
(i) Public accounts committee (PAC).
(ii) Appropriation-In-Aid (AIA).
(iii) Public Investment committee (PIC).
(b) The...(Solved)
(a) Explain the following terms as used in the context of public sector accounting:
(i) Public accounts committee (PAC).
(ii) Appropriation-In-Aid (AIA).
(iii) Public Investment committee (PIC).
(b) The approved estimates and actual expenditure details for the ministry of Gender and Culture for the
financial year ended 30 June 2012 were as follows:
Vote no. Details Approved estimates Actual expenditure
Sh. "000" Sh. "000"
S001 Travelling and accommodation 32,100 31,200
S004 Commuter allowances 8,400 7,200
S010 Passage and leave expenses 80,120 75,600
S120 Communication expenses 6,110 5,880
S121 Staff development 10,120 8,440
S124 Vision 2030 flagship 7,150 7,850
S144 Purchase of computers 12,140 10,940
S300 Appropriation-In-Aid 6,000 14,500
S184 Personnel emoluments 241,800 212,300
S200 Miscellaneous expenses 34,480 32,150
S210 Transport expenses 8,300 7,900
S215 Housing allowance 41,300 37,200
The ministry made four equal withdrawals from the Exchequer of sh.110,000,000 each.
Required:
(i) Paymaster general account.
(ii) The Exchequer account.
(iii) General account of Vote
(iv) Statement of Assets and liabilities as at 30 June 2012
Date posted: September 30, 2022. Answers (1)
- The following is a receipt and payment account as reported by the treasurer of Mambula Sports Club for the year ended 31 December 2012.
Receipts ...(Solved)
The following is a receipt and payment account as reported by the treasurer of Mambula Sports Club for the year ended 31 December 2012.
Receipts Sh. "000"
Balance at 1 January 2012: Bank 3,000
Cash in hand 400
Subscription received 9,600
Canteen sales 2,700
Donation (for purchase of bus) 2,000
Dinner dance ticket sales 1,800
Bank interest 360
Investment income 600
20,460
Payments
Canteen purchases 2,010
Water and electricity 270
Sports Equipment 2,000
Canteen attendant wages 300
Canteen expenses 150
Secretary's honoraria 4,500
Training fee 1,500
Grounds man (field) wages 1,200
Field maintenance and repairs 540
Dinner dance expenses 900
Transport and travelling expenses 1,260
Closing balance (31 December 2012):
Bank 3,000
Cash in hand 2,830
20,460
The balances of assets and liabilities as at 31 December 2011 and 2012 were as follows:
2011 2012
Sh. "000" Sh. "000"
Sports equipment 2,400 ?
Club house at cost 9,200 9,200
Furniture and Fittings at cost 1,800 1,800
Canteen stock 600 750
Subscription in arrears 720 840
Subscription in advance 540 1,380
Water bills outstanding 90 220
Canteen creditors 270 360
Accumulated depreciation:
Sports equipment 840 ?
Furniture and Fittings 540 ?
Investment 2,400 2,400
Additional information:
1. Subscriptions money received related to the following periods:
Year Sh. "000"
2011 600
2012 7,620
2013 1,380
It is the policy of the club to write-off subscription in arrears after 12 months
2. Depreciation is to be charged on the cost of assets in existence at the end of the financial year as follows:
• Furniture and Fittings at 10% per annum
• Sports Equipment at 20% per annum
3. During the year, sports equipment was sold for sh.600,000 to club members on credit. These equipment had cost sh.1,200,000 and had been used for two years.
4. Cash sales for the canteen on the last day of the year amounting to sh.300,000 were omitted in the records as well as on the cash reported.
Required:
(a) Canteen income statement for the year ended 31 December 2012.
(b) The club’s income and expenditure account for the year ended 31 December 2012.
(c) Statement of financial position as at 31 December 2012.
Date posted: September 30, 2022. Answers (1)
- QUESTION TWO
Kate and John formed a partnership business to sell Chinese motorbikes in Mombasa city sharing profits and losses in the ration of 3:1 respectively....(Solved)
QUESTION TWO
Kate and John formed a partnership business to sell Chinese motorbikes in Mombasa city sharing profits and losses in the ration of 3:1 respectively. On 1 April 2012, Kate contributed sh.15,000,000 and John sh.5,000,000 which was immediately deposited in a newly opened bank account of the partnership.
Additional information:
1. Sales proceeds banked during the year amounted to sh.109 million.
2. The cashier had paid the following expenses from sales proceeds before banking the balance:
• Rent of go downs and offices at sh.100,000 per month.
• Office running expenses at sh.10,000 per week.
• Casual wages at sh.4,000 per week.
• Local transport at sh.7,000 per week.
• Partners were allowed to draw salaries per month as follows: Kate sh.30,000 per month.
John sh.36,000 per month.
The partners made all their drawings for the year.
Assume there are 52 weeks in the financial year ended 31 March 2013.
3. The partnership paid the following amounts through the bank:
In Shillings:
Purchase of furniture and fittings 128,000
Purchase of computers 900,000
Staff salaries and wages per month 100,000
Purchases 96,000,000
Drawings (per month):
Kate 100,000
John 80,000
Licenses and clearing charges 1,920,000
Bank charges (per month) 3,000
Telephone per month 8,000
Freight charges 576,000
Electricity bill 10,000
4. Analysis of transactions revealed that:
• Accounts receivable amounting to sh.900,000 were outstanding at the year end.
• Inventory of motorbikes at the year end at cost was sh.8,700,000.
• Included in the inventory of motorbikes above are motorbikes which cost sh.1,100,000 but which can
now be sold for sh.800,000 only, because of impairment in value in the go down.
• The telephone and electricity bills for the month of March 2012 were paid on 3 May 2012.
• Accounts payable for purchases amounting to sh.600,000 were unpaid at the year end.
5. The partners are entitled to 10% interest on their fixed capitals per annum.
6. Depreciation is to be provided on furniture and fittings and computers at the rate of 12.5% and 20% per annum on cost respectively.
Required:
(a) Income statement and profit and loss appropriation account for the year ending 31 March 2013.
(b) Statement of financial position as at 31 March 2013.
Date posted: September 30, 2022. Answers (1)
- Explain four considerations that management should take into account in choosing the basis of cost apportionment.(Solved)
Explain four considerations that management should take into account in choosing the basis of cost apportionment.
Date posted: May 16, 2019. Answers (1)