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Is rent expense aт asset, liability, or equity ?
Q. The following information relates to Country Sports Club for the year ended 31.3.2020. You are
required to prepare the Receipts and Payment Account for the year ended 31.3.2020 and Balance Sheet
as on that date.
Expenditure Amount in
Rs.
Income Amount in
Rs.
To Salaries 3,36,000 By Subscriptions 8,40,000
To Repairs and Maintenance 88,000 By Receipts from Annual
Sports 3,25,000
Less Expenses for
Sports (2,75,000) 50,000
To Ground Upkeep 1,66,500
To Electricity charges 82,600
To Sports Materials used 1,48,000
To Printing and Stationery 42,200 By entrance fees 1,80,000
To Groundsman Wages 80,000 By interest on 10% Govt.
Bonds
12,000
To Depreciation 1,36,000 By Rent on Hire of Club
Ground
84,000
To Prizes Distributed
(Net of Fund Income) 4,000
By Profit on Sale of Sports
Materials 10,500
By Sale of old Newspaper 3,500
To Surplus Carried to Capital
Fund 96,700
Grand Total 11,80,000 11,80,000
Additional Information:
(a)
Particulars Balances as on
1.4.2019
Balances as on
31.3.2020
Fixed Assets (Net Block) 6,36,000 7,20,000
Stock of Sports Materials 1,24,000 1,38,000
Investments in 10% Govt. Bonds 1,20,000 1,20,000
Subscriptions Received in Advance 64,000 72,000
Outstanding Subscriptions 1,24,000 88,000
Outstanding Repairs Expenses 13,500 24,500
Creditors for Sports Materials 78,600 62,500
Salary paid in Advance 32,000 28,000
Prize Fund 2,40,000 2,40,000
Prize Fund Investments 2,36,000 2,36,000
Bank Balance 54,500 ?
(b) During the year, the club purchased Sports Materials of Rs. 1,80,000 out of which 75% was
Credit Purchase.
(c) 25% of the entrance fees is to be capitalized.
(d) Interest on Govt. Bond is received half yearly on 30th June and 31st Dec. each year.
(e) Prize fund income earned during the year Rs. 36,000 and Prizes distributed during the year
Rs. 40,000.
What is the relationship between economic growth and economic development
Question
Cara Suite Hotels Co operates a chain of 18 hotels located across the country. Each hotel has bedrooms, a restaurant and leisure club facilities. Most visitors to the restaurant and leisure club are hotel guests; however, these facilities are open to the public as well. Hotel guests generally charge any costs to their room but other visitors must make payment directly to the hotel staff. During the year, senior management noticed an increased level of cash discrepancies and inventory discrepancies, and they suspect that some employees have been stealing cash and goods from the hotels. They are keen to prevent this from reoccurring and are considering establishing an internal audit department to undertake a fraud investigation.
Required: a. What is Internal Auditing and
b. State what are the roles and responsibilities of Internal Auditor.
c. Describe the limitations of Cara Suite Hotels Co establishing and maintaining an internal audit department.
d. What are some of the internal controls needed by the Internal Auditing Team.
In a business combination, is it possible to acquire control to another entity/company without giving any consideration? If yes, how come it is possible?
Double Quality company’s direct wages is 60% of its total conversion costs. If manufacturing overheads is $60 000 and if direct materials are $28 000. The total prime cost is?
On 31 December 2017, Betty Trading showed the following details of accounts: On 1 January 2016, Betty purchased motor vehicle (A), RM30,500 by cash. On 1 January 2017, Betty bought another motor vehicle (B) RM22,000 by cheque. The company uses the straight line method at the rate of 10% per annum on cost in order to depreciate their non- current assets. On 31 December 2018, motor vehicle (A), which was bought on 1 January 2016 was sold cash for RM19,500. a) You are required to prepare the ledger accounts as follows for 2016, 2017 and 2018: i) Motor vehicle account [5 marks] ii) Accumulated Provision for depreciation motor vehicle account [7 marks] b) Prepare motor vehicle disposal account [5 marks] c) Identify THREE (3) causes of depreciation on the non-current assets.
The market price of the ordinary shares at 31 December 2020 was Rs1.60. The dividend yield on ordinary shares was 2 per cent. The creditor for taxation at 31 December 2019 was Rs25 000. Taxation paid in the year ended 31 December 2020 amounted to Rs22 000. The liability for taxation on the profit of the year ended 31 December 2020 is Rs31 000 and is carried forward on the Taxation account. The retained profit for the year ended 31 December 2020 was Rs60 000. The debentures were issued in 2016. The preference shares were issued at par.
The summarized Balance Sheet at 31 December 2020 of Iqra Ltd was as: Fixed assets 2550000, Net current assets 950000, 6% debentures 2019/2020 150000, Ordinary shares of Rs1, 2500000, 10% redeemable preference shares of Rs1, 300000, Share Premium account 200000 Profit and Loss Account 350000.
REQUIRED Prepare IqraLtd’s Profit and Loss Account for the year ended 31 December 2020 in as much detail as possible. The Profit and Loss Account should commence with the operating profit.
treasurer of MMU Accountants’ Club has produced the following receipts and payments
account for the year ended 31st December 2018.
Receipts Kes Payments Kes
Balance at bank 1 January 2018 195,000 Payments for refreshment supplies 216,000
Subscriptions received 2,253,000 Wages of attendants and cleaners 1,570,000
Profits from dances 205,800 Rent of building 435,000
Profit on exhibition 44,500 New equipment bought 910,000
Sales of Refreshments 814,500 Traveling expenses of teams 95,000
Sale of equipment 17,000 Balance at bank 31st December 2018 303,800
3,529,800 3,529,800
Additional information:
(i) Refreshment stocks were valued: 31st December 2017 Kes 34,000; 31st December 2018
Kes 46,000. Owing for refreshment stocks on these dates were Kes 5,000 and Kes 78,000
respectively.
(ii) On 1st January 2018, the club’s equipment was valued at Kes 1,620,000. Included in this
figure, valued at Kes 21,000, was the equipment sold during the year for Kes 17,000.
(iii) The amount to be charged for depreciation of equipment for the year is Kes 260,000. The
club’s policy is not to charge depreciation on equipment on the year of disposal.
(iv) Subscriptions owing by members at 31st December 2018 Kes 31,500; at 31st December
2018 Kes 43,000
(v) Kes 234,000 of the wages expenses and 10% of the rent expenses relate to the
refreshment account
Required:
i) Refreshment income statement for the year ended 31st December 2018 (4 marks)
ii) Income and Expenditure statement (statement of comprehensive income) for the year
ended 31st December 2018 (9 marks)
iii) Statement of financial position as at 31st December 2018 (7 mar
QUESTION ONE (THIRTY MARKS)
a) The following information relates to the Motor Vehicle account of Ayieye & Associates:
Asset Date
purchased
Amount
(Kes)
Estimated
Useful life
Residual
Value (Kes)
Date of
disposal
Proceeds from
Disposal (Kes)
KAA 111A 01:04:2015 775,000 5 years 380,000 01:07:2018 450,000
KBB 222B 01:10:2016 900,000 5 years 550,000
KCC 333C 01:01:2018 1,500,000 5 years 900,000
Additional information:
i) The company uses the straight line method in providing for depreciation and its policy is
to charge a full year’s depreciation on its assets in the year of purchase and not in the
year of disposal.
ii) The financial year end of the company is to 31st December
Required:
i) Determine the profit or loss on the disposal of KAA 111A (2 marks)
ii) Prepare the Provision for depreciation accounts for the years 2015 – 2018 (6 marks)
iii) Show the Motor vehicle account For the years 2015 – 2018 (5 marks)
iv) Show the Motor vehicle disposals account for the year 2018 (2 marks)
