Unit: Financial accounting
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Login to Access| Sh.“000” | ||
| 30 June 2022 | Godfrey Ombati | 700 |
| 31 January 2022 | Harrison Otieno | 560 |
| 31 March 2023 | Amose Kasese | 280 |
| 30 September 2023 | Francis Mwangangi | 1,260 |
| 30 November 2023 | Joseph Omanya | 140 |
| 30 April 2024 | Joseph Ottomani | 620 |
| 31 May 2024 | Peter Were | 715 |
| 31 August 2024 | Paul Kilemba | 805 |
| 31 October 2024 | Perminus Ouma | 386 |
| Sh. | Sh. | |
| Retained earnings as at 1 January 2024 | 478,534 | |
| Buildings at cost (1 January 2019) | 2,242,500 | |
| Equipment at cost (1 January 2019) | 864,050 | |
| Sales | 7,542,520 | |
| Purchases | 4,875,260 | |
| Accounts receivables | 345,875 | |
| Accounts payables | 248,750 | |
| Other receivables | 40,000 | |
| Motor vehicles at cost | 468,500 | |
| 10% debentures | 1,457,500 | |
| Ordinary share capital | 180,000 | |
| Investment income | 4,000 | |
| Investment property (4% interest rate) | 200,000 | |
| Inventory (1 January 2019) | 284,650 | |
| Income tax expense | 163,000 | |
| Finance cost | 10,000 | |
| Distribution cost | 812,720 | |
| Tax payable account | 36,000 | |
| Bank | 394,600 | |
| Allowance for credit loss | 12,601 | |
| Administrative expenses | 248,750 | |
| Allowance for depreciation: | ||
| Buildings | 580,000 | |
| Equipment | 220,000 | |
| Motor vehicles | 190,000 | |
| 10,949,905 | 10,949,905 |
| 1. | Rhino Ltd. held an inventory count at the year end which revealed that the year end inventories at cost amounted to Sh.268,460,000. Included in this figure is Sh.3,200,000 of slow moving inventories at cost. These will need to be sold at a 40% discount on selling price in order to sell them. Rhino sells these goods at a mark up of 20%. |
| 2. | Equipment costing Sh.150,000,000 was acquired on credit from Tausi Traders. This had not been recorded in the books. |
| 3. | A building was disposed of for Sh.140,000,000 on 31 October 2024. This building had been purchased 8 years ago for Sh.200,000,000. |
| 4. | Depreciation is provided per annum as follows: | |
| Buildings | - 5% on cost | |
| Equipment | - 10% on reducing balance | |
| Motor vehicles | - 25% on reducing balance | |
| 5. | At the year end, the directors declared dividends of Sh.40,000,000 for the year ended 31 December 2024. This had been treated as shown below in the financial statements: |
| 5. | Debit : | Other receivables | Sh.40,000,000 | |
| Credit : | Retained profits | Sh.40,000,000 |
| 6. | 80% of credit loss of Sh.6,000,000 that had been written off to administrative expenses were found to be recoverable in the year ended 31 December 2024. |
| 7. | The company’s policy is to provide for allowance for credit loss at a rate of 4%. |
Required: | |
| (i) | Statement of profit or loss for the year ended 31 December 2024. |
| (ii) | Statement of financial position as at 31 December 2024. |
| Non-current assets | Cost | Accumulated depreciation |
| Sh.“000” | Sh.“000” | |
| Freehold property | 70,000 | - |
| Plant and machinery | 52,500 | 20,320 |
| Office equipment | 10,500 | 5,110 |
| Motor vehicles | 31,500 | 18,200 |
| 1. | The following non-current assets were acquired during the year ended 31 March 2024: |
| 1. | Date | Non-current assets | Cost Sh.“000” |
| 1 April 2023 | Machinery | 7,000 | |
| 1 October 2023 | Motor vehicle | 4,200 |
| 2. | The following non-current assets were disposed of during the year ended 31 March 2024: | ||||
| Date | Non-current Assets | Sales proceeds Sh.“000” | Cost Sh.“000” | Accumulated depreciation as at date of disposal Sh.“000” | |
| 1 April 2023 | Machinery | 4,830 | 6,300 | 700 | |
| 1 July 2023 | Office equipment | 448 | 560 | 140 | |
| 31 March 2024 | Motor vehicle | 2,240 | 3,500 | 350 | |
| 3. | Daraja Ltd. depreciates the assets using the straight-line method on a pro rata basis at the following rates per annum: |
| 3. | Non-current assets | Rate per annum (%) |
| Plant and machinery | 20 | |
| Office equipment | 15 | |
| Motor vehicle | 25 |
| 4 | On 1 April 2023, the management of Daraja Ltd. decided to start depreciating freehold property at the rate of 2.5% per annum. |
Required: Non-current asset movement schedule for the year ended 31 March 2024. |