Solved by Expert Tutors
QUESTION TWO Masaba Company Ltd. is a retail provider with an authorised share capital of 800,000 Sh.20 ordinary shares and 250,000 8% Sh.20...
Solved by Expert Tutors
Question

QUESTION TWOMasaba Company Ltd. is a retail provider with an authorised share capital of

 

     800,000 Sh.20 ordinary shares and 250,000 8% Sh.20 redeemable preference shares.

 

The following financial information reflects the position of the company as at 31 December 2018 after preparing the Trading, profit and loss account:

 

 

Sh.

 

`000'

Provision for depreciation   Fittings

1,500,

                               Motor vehicles

3,740

Goodwill

1,200

Issued share capital: 600,000 Sh.20 Ordinary shares

12,000

                               250,000 Sh.20 Redeemable preference shares

5,000

Share premium account

400

Trade debtors and prepayments

1,708

Land and buildings at valuation (Cost Sh.4, 400,000)

18,400

Capital redemption reserve fund

3,000

Fittings at cost

3,000

Motor vehicles at cost

7,940

10`% Debentures

1,600

Trade creditors and accruals

960

Short-term investments (Market value Sh.860,000)

7 8 0

Stock at 31 December 2018

2,960

Bank overdraft

540

Revaluation reserve

1,000

Net profit for the year

1,440

Retained profit at 1 January 2018

4,460

General Reserve

1,100

Provision for doubtful debts

48

Interim dividend paid - Ordinary

600

                               - Preference

200

 

The following resolutions relating to year ended 31 December 2018 have been passed by the board of directors of the company

1.   Transfer Sh.500,000 to General Reserve.

2.    Provide for 5% final dividend and final preference dividend on shares issued and

      outstanding on 31 December 2018.

3.     Make a bonus issue of 100,000 fully paid ordinary shares from the retained profits 

      account.

 

Required:

(i)    The appropriations account of Masaba Company Ltd. for the year ended 31 December 2018.                                                                                                        (4 marks)

(ii) Statement of financial position of Masaba Company Ltd. as at 31 December 2018.         (8 marks)

 

Step-by-step answer

ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit a

risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolo

acinia pulvi

nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultr


Appropriation Account.JPG


Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet,


Balance sheet.JPG

Balance sheet....JPG

Appropriation Account.JPG
r

Subscribe to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Let our 24/7 Financial Accounting tutors help you get unstuck! Ask your first question.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes