Shareholders funds 688990 Non current liabilities 8 debentures 20000 Deferred

Shareholders funds 688990 non current liabilities 8

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Shareholders funds 688,990 Non current liabilities 8% debentures 20,000 Deferred tax 1,200 21,200 710190 Current liabilities Trade creditors 102,000 Tax payable (11,820 8,615) 3,205 Accrued directors‟ fee 150,000 255,205 TOTAL EQUITY AND LIABILITIES 965395 Workings 1. Turnover Sh.‟000‟ As per trial balance 1,191,864 Less proceeds and disposals (1,215) 1,190,649 2. Selling and distribution costs As per TB 78,840 Motor vehicle expenses 59,864 Wages 25,000 Depreciation: Motor vehicle 12,580 FINANCIAL REPORTING
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Past Papers Questions and Answers 155 176,104 3. Administrative expenses Wages and salaries 70,834 As per TB 11,492 Audit fees 1,400 Depreciation: fixtures 1,040 Compensation of director for loss of office 8,500 Provision for doubtful debts (16,822 14,400) 2,422 Director‟s fee 150,000 245,688 4. Profit on assets disposed Motor Fixtures & Total Cost vehicles Fittings 4,255 Acc. Dep. 2,800 1,455 3,055 NBV 2,150 905 1,200 Proceeds 650 550 1,215 Profit & Loss 715 500 6,500 DEFERRED TAX A/C Sh. ‟000‟ Sh.‟000‟ Profit U Loss 1,800 Bal c/d (30% x 4,000) 1,200 Bal b/d 3,000 3,000 3,000 Notes to the accounts Note 1 Accounting policies These financial statements have been prepared under the historical cost basis of accounting which is modified to accommodate the revaluation of certain properties and in accordance with the applicable IFRSs. Property plant and equipment is shown at cost or revalued amount less the total accumultaed depreciation, which is based on the estimated useful life of the assets. Inventory has been stated at the lower of cost and net relisable value. Note 2 Profit before tax The profit before tax has been arrived at after charging the following expenses Sh.‟000‟ Directors fee 205,000 Compensation to director for loss of office 8,500 Depreciation 13,650 Auditors fee 1,400 Staff costs 40,834 KASNEB PANEL ● R EVISION K IT
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156 Answers Past Papers Note 3 Taxation Corporation tax is based on the adjusted profits for tax purpose at a corporation tax rate of 30% Note 4 Propety plant and equipment Freehold land Motor Fixtures & COST/VALUATION & Buildings vehicles Fittings Total Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Bal as at 01.04.01 270,000 48,960 19,200 338,160 Additions - 2,240 1,600 3,840 Disposals - (2,800) (1,455) (4,255) Revaluations 30,000 - - 30,000 Bal as at 31.03.02 300,000 48,400 19,345 367,745 Accumulated Depreciation Bal as at 01.04.01 - 13,820 8,460 22,280 Eliminated on disposal - (2,150) (905) (3,055) Charge for the year - 12,580 1,040 13,650 Bal as at 31.03.02 - 24,250 8,595 32,845 NBV as at 31.03.02 300,000 24,150 10,750 315,880 NBV as at 01.04.01 270,000 35,140 10,740 315,880 Note 5 Dividends During the year the company paid a dividend of sh.1.30 on the preference shares outstanding. The directors are now proposing a dividend of sh.1.35 per s share on the number of ordinary shares outstanding at the end of the year. QUESTION TWO It is difficult to approach the question by preparing the profit and loss account for the last six months because this is what the examiner asked for. Therefore the results for the fisrt six months have been included for the purpose of illustration only. FINANCIAL REPORTING
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Past Papers Questions and Answers 157 Kamaro ltd Trading profit and loss account for the year ended 31 May 2002 Six months to Six months to 31.05.02 Total 30.1.01 Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Sh.‟000‟ Sales 24,000 36,000 60,000 Cost of sales 14,400 21,600 36,000 Gross profit 9,600 14,400 24,000 Less Expenses Administrative expenses 3,000 3,000 3,000
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