The statement of financial position……

Harry and Barry are in partnership. Their not profit for the year was ksh.462,000. Harry started with a balance of ksh.160,000 on 1st January 2011. In his capital account and invested a further ksh.20,000 on 1st January. Barry’s capital account balance on 1st January 2011 was ksh.40,000 with no further investment during the year.

Partnership salaries: Harry ksh.24,000
Barry ksh.30,000

Profits and losses are shared by the partners in the ratio of their capital balances at the end of the year.

Required:

Prepare the profit and loss appropriation account for the partnership for the year ended 31 December 2011. [4 marks]

f) State the two documents which must be lodged with the registar of companies when a public limited company is formed. [3 marks]

g) State and explain the components of a cashflow statement. [2 marks]

Question Two

The following balances were taken from the books of Mumias Unga Ltd for the year ended 31 December 2010 after the trading account had been prepared.

Ksh “000” Ksh. “000”
Dr Cr
Gross profit 706
Insurance 73
Wages and salaries 200
Provision for doubtful debts 8
(at 1 April 2009)
Premises (at cost) 1,120
Fixtures and fittings (at cost) 120
Provision for dep. On fixtures (as at April 2009) 40
Stock at 31 March 2010 164
Debtors 100
Creditors 66
Profit and loss account (at 1 April 2009) 32
Bank 75
10% Debentures (2020) 400
500,000 ordinary shares of ksh. 1 each 500
100,000 8% preference shares of ksh.1 each 100
1,852 1,852

Additional information:

1. Insurance includes a prepayment of 5000 for next year.
2. Wages and salaries due but unpaid amount to ksh.20,000.
3. Depreciation is to be provided on fixtures and fittings at 10% on cost.
4. The provision for doubtful debts is to be increased to ksh.10,000.
5. Corporation Tax of ksh.91,000 is to be provided on Net profit.
6. Debentures interest to be paid in full.
7. The Directors propose:

i. Preference share dividend should be paid in full.
ii. Ordinary share dividend of 12% should be paid.

Required:

i. Prepare the profit and loss and appropriation of available profits for the year ended 31 March 2010. [10 marks]

ii. The statement of financial position. [10 marks]

 

 

 

 

 

 

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