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Assignment Task:

Question One

Chella and Shadreck are in partnership sharing profits and losses in the ratio 5:3 respectively.

The following information has been taken from the partnership records for the financial year ended 31 May 2019.

Partners’ capital account balances:

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Interest is to be charged on withdrawals at the rate of 8.5% per annum. Interest is allowed on capital accounts and credit balances on current accounts at the rate of 11% per annum.

Shadreck is to be allowed a salary of K53,000 per annum.

The net profit of the partnership for the year ended 31 May 2019 is K108,377.

Required:

(a) A computation of the amount of interest chargeable on each partner’s withdrawals for the year ended 31 May 2019. (6 Marks)

(b) The partnership appropriation account for the year ended 31 May 2019. (8 Marks)

(c) The partners’ current accounts showing the balances carried down as at 31 May 2019. (7Marks)

 

Question Two

Sam’s Lodge operates three sections, accommodation, restaurant and bar.

The Assistant Accountant has been tasked to prepare accounts for the year ended 30 September, 2019. The following information was provided:

Expenses are to be apportioned on the following bases:

Floor area – rates, cleaning, depreciation of building, water & electricity, repairs and maintenance

Sales value – salary of supervisor, advertising

No. of employees – telephone, general office expenses

Cost of sales – insurance, motor vehicle depreciation and running costs

The cost of Buildings is K189,500 and Van is K56,000. The van is used mainly to purchase goods for the Lodge. Depreciation is as follows:

Buildings 5% on cost

Fixtures and fittings 10% straight line

Motor vehicle 20% straight line

 

Electricity bill outstanding at the year-end was K2,300 and rates paid for six months up to 31 December 2019 were K1,350.

Required:

Prepare Sam’s Departmental Statement of profit and loss for the year ended 30 September, 2019, showing clearly, the contribution of each department.

Question Three

The following information relates to Julie Limited for the year ended 31 December, 2019.

Profit before tax for the year ended 31 December 2019

K20,550

Debentures issued by the company in 2017 with an interest of 12% p.a.

K26,000

Interim dividend paid on ordinary shares in 2019

K 1,300

Cost of motor vehicle IST purchased in 2019

K48,000

Trade-in value of vehicle given in part-exchange against IST

K 7,000

Ordinary shares of K100 each in Julie Limited issued at par and fully paid during 2019

K32,000

Ordinary share dividend proposed in 2018 paid in 2019

K 3,000

Ordinary dividend proposed in 2019

K 2,250

Corporation tax paid

K10,500

Cash and bank balance 1 January 2019

K 7,100

Cash and bank balance 31 December 2019

K13,250

 

During the year ended 31 December 2019,

(i) Receivables decreased by               K4,250

(ii) Payables increased by                    K2,650

(iii) Inventory increased by                 K5,150

(iv) Depreciation charged was            K7,900.

    

     Debenture interest is not in arrears.

Required:

  1. Prepare a Statement of Cash Flow for Julie Limited for the year ended 31 December, 2019.

(b) Explain the term ‘cash equivalents’. (2 Marks)

(c) Name THREE headings which would be used when calculating Net Cash Inflow from Operating Activities using the direct method.

(d) Give THREE advantages of cash flow accounting

 

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  • Posted on : June 27th, 2019

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