b Prepare the partners capital accounts for the year ended 31 March 2003

B prepare the partners capital accounts for the year

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(b) Prepare the partners’ capital accounts for the year ended 31 March 2003 (current accounts should be closed off to the capital accounts as early as possible) (8 marks) (c) Prepare the opening Balance Sheet of Pango Limited. (4 marks) (Total: 20 marks) NUMBER THREE Karuma Limited is an insurance company with a head office in Nairobi and branches in all the major towns in Kenya. Each branch maintains a separate set of books. Download more at
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However, for control purposes, all the property, plant and equipment I the branches are carried in the head office books, as are depreciation accounts for all these items. The current accounts between the head office and the Mombasa branch do not agree at the company’s year-end, 31 March 2003. the accounts had been agreed at the previous year end 31 March 2002. The difference in the current accounts is due for the following items: 1. Port Beach Hotel has a number of policies with Karuma Limited. Since it is a large client, these policies are dealt with by the head office in Nairobi. The hotel had paid Sh.846,000 by cheque to the Mombasa branch on 1 January 2003 for the year to 31 December 2003. The Mombasa branch credited the Fire Premium Account with this amount. At 31 March 2003, the head office showed Port Beach Hotel as a debtor in this amount, the income aspect of the transaction having been accounted for correctly. 2 Lamu Ferries Limited sold one of its ferries on 30 September 2002. It informed the branch in Mombasa of this fact, and requested a credit note for the return premium in the amount of Sh.228,000. The Mombasa branch had never issued the credit note as required, but a credit note had been issued by the head office on 19 March 2003 for the sum involved, being recorded in the premium account as a return premium in the head office books. Lamu Ferries Limited has no account in the head office books. The other side of the return premium has been accounted for correctly. The head office Chief Accountant wants every aspect of the return premium accounted for correctly. 3. A cheque for Sh.650,000 was sent by the Mombasa branch to the head office in Nairobi on 15 August 2002. This cheque has never been received in the head office. The Mombasa branch issued a stop order to its bank on 18 March 2003, after the cheque had already gone stale. No entry has been made in the head office books in relation to this cheque, but it is still included in the Bank Reconciliation Statement prepared by Mombasa branch as at 31 March 2003. 4. The General Manager and the Chief Accountant of the head office Download more at
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