Extra Questions - A Level

ANSWER THE FOLLOWING
1.The following balances have been extracted from the books of Limuru manufacturers, a small-scale manufacturing
enterprise as at 31 December 2022: $
Inventory as at 1 January 2022

Raw materials 7,000
Work in progress 5,000
Finished goods 6,900
Purchases of raw materials 38,000

Direct labour 28,000
Factory overheads 25,000
Administrative expenses
Rent and rates 19,000
Lighting 6,000
Stationary & postage 2,000
Staff salaries 19,380
Sales 192,000
Plant and machinery
At cost 30,000
Provision for depreciation 12,000
Motor vehicles (for sales deliveries)
At cost 16,000
provision for depreciation 4,000
Trade payable 5,500
Trade receivable 28,000
Drawings 11,500
Capital at 1st Jan 2022 48,000
Provision for unrealized profit at 1 January 2022 1,380
Motor vehicle running costs 4,500
Additional information:
1. Inventory at 31 December 2022 were as follows. $
Raw materials 9,000

Work in progress 8,000
Finished goods 10,350
2. The factory output is transferred to the trading account at factory cost plus 25% of factory profit.
3. Depreciation is provided at the rates shown on the original cost of fixed assets held at the end of each financial
year.
Plant and machinery 10% per annum
Motor vehicles 25% per annum
4. Amounts accrued at 31December 2022 for direct labour amounted to $ 3,000,000 and rent rates prepaid at 31
December 2022 amounted to $ 2,000,000.
Required:
(a) Manufacturing account, Income statement for the year ended 31 December 2022 and statement of financial
position as on 31 December 2022.
2. The information given below is in the respect of the proposed budget for A Ltd for six months ended 31/12/2018
Months Sales $ Purchase $ Production overhead $ wages $ Administration

July 25,000 10,000 3,500 2,000 3,400
August 35,000 11,000 2,000 1,000 3,000
September 42,000 12,000 4,000 2,500 1,500
October 20,000 9,500 2,000 1,200 900
November 27,000 7,000 2,100 1,100 2,100
December 32,000 11,500 1,500 1,000 2,200
Additional information
 Excepted cash balance on hand on 1.7.18 is $ 13,000.

 Purchases are paid for one month after the supply.
 Depreciation expenses is expected to be1% of sales.
 50% sales are in cash 30% received the following month and balance one month later.
 Assets to be acquired in the month of August and October at $ 8000 and $ 4,000 respectively.
 The company is expected to receive $ 5,000 loan in November.
 The company will pay a dividend of $ 4,000 in December.
 Sales commission of 2% equivalent of sales is paid to salesman each month.
 Wages, production and administration overhead are paid one month after they are incurred.
Required.
A Cash budget for period ending 31/12/18.

3. The following balances are in the books of a partnership as at 31 December 2021:
Capital accounts Badu, as at 1 January 2021 500,000

Tawiah, introduced 1 July 2021 300,000
Drawings Badu 220,000
Tawiah 100,000
1) Until 30 June 2021, Badu had run the business as a sole trader. Tawiah joined him on 1 July 2021 introducing
capital of $ 300,000.
2) Under the partnership agreement, the balance of profit is to be shared between Badu and Tawiah in the ratio 3:2.
No interest is to be charged on drawings. Both partners are to receive interest on their capital account balances at
5% per annum. Tawiah is to receive a salary of $ 40,000 per annum but no salary is to be paid to Badu.
3) The profit for the year ended 31 December 2021 was $ 330,000. It was agreed that this profit had accrued one-
third in the six months ended 30 June 2021 and two thirds in the six months ended 31 December 2021, except for an
irrecoverable debt of $ 30,000 charged in arriving at the profit which was to be regarded as occurring in the six
months ended 30 June 2021.
Required:
i) Calculate the amount of profit due to Badu for the six months to 30 June 2021.
ii) Prepare the Appropriation Account for Badu and Tawiah for the six months ended 31 December 2021.
iii) Prepare the Current Accounts for Badu and Tawiah for the year ended 31 December 2021
i) The statement of profit or loss for the year ended 31 December 2021 shows the following:
$ 000
Operating profit 1,531

Interest payable (26)
Profit before taxation 1,505
Taxation (480)
1,025
ii) Payables consists of trade payables and accrued interest. The accrued interest as at 31 December 2021 was $
45,000 and 2020 was $ 80,000.
iii) Profit before taxation had been arrived at after charging $ 395,000 for depreciation on non- current assets.
iv) During the year non-current assets with a carrying amount of $ 200,000 were sold for $ 190,000.
Required:
a) Prepare a Statement of Cash Flows for Chemu Ltd for the year ended 31 December 2021, in accordance with IAS 7:
Statement of cash flows.
b) Identify FOUR (4) benefits Chemu Ltd may derive from preparing Statement of Cash Flows.
5.

Extra Questions - A Level

Uploaded by

Copyright:

Available Formats

Extra Questions - A Level

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Extra Questions - A Level

Uploaded by

Copyright:

Available Formats

ANSWER THE FOLLOWING

Inventory as at 1 January 2022

Purchases of raw materials 38,000

1. Inventory at 31 December 2022 were as follows. $

Raw materials 9,000

Months Sales $ Purchase $ Production overhead $ wages $ Administration

 Excepted cash balance on hand on 1.7.18 is $ 13,000.

A Cash budget for period ending 31/12/18.

Capital accounts Badu, as at 1 January 2021 500,000

Operating profit 1,531

You might also like