CPA › Financial accounting › August 2022

CPA Financial accounting – August 2022 Past Paper & Answers

Unit: Financial accounting

9 Questions

Download Complete Period

Get all questions and answers for "August 2022" in a single PDF file

Join the community! 550+ students upgraded in the last 24 hours. Limited Discount Seats Available

Questions

Download CPA Financial accounting August 2022 past paper with detailed answers and marking scheme. This paper is based on KASNEB examination standards and is ideal for revision and exam preparation.

Access the full paper online, download the PDF, or study offline. Each question includes step-by-step solutions to help you understand key concepts in Financial accounting.

Other Financial accounting Past Papers

1a
Analyzing Financial Statements
​ ​ ​​The finance manager of Wali Traders has provided you with the following information:

Sh. “000”
Cost of sales 
22,000
Gross profit 
9,500
Interest expense 
3,000
Tax expense 
1,116
Net profit after tax 
4,464

Required: 
 (i) Interest coverage ratio. 

 (ii) Gross profit margin ratio. 
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
1b
Financial Statements of a sole trader
​ ​ ​ ​ ​​Grace Solo is a sole trader who runs a commercial bakery. She does not maintain proper records, but has provided you with the following information.

31 December 2020
31 December 2021
Sh. “000”
Sh. “000”
Factory building (at cost)
425,000
425,000
Motor vehicles (at cost) 
93,000
?
Furniture and fittings (at cost) 
13,500
13,500
Inventories
13,700
14,930
Accounts receivable 
11,450
11,570
Accounts payable 
15,460
16,800
Loan
19,500
?
Salaries and wages due 
8,420
8,250
Prepaid rates 
7,750
7,860
Rent received in advance
7,900
8,180
Capital
502,320
?
Accumulated depreciation: 
•  Factory building 
8,500
17,000
•  Motor vehicles 
2,580
5,422
•  Furniture and fittings
1,600
3,200

Additional information: 
1.
Grace Solo’s cash summary is provided as follows: 
Cash summary 
Sh. “000”
Sh. “000”
Balance brought forward
1,880
Accounts payable 
57,760
Accounts receivable
9,810
Cash purchases
15,640
Cash sales 
28,860
Salaries and wages 
15,820
Rent
13,700
Rates
9,140
Capital
72,250
Motor vehicle expenses 
10,320
Bank charges
7,650
General expenses
4,770
Loan interest 
800
Loan repayment 
17,500
Motor vehicle 
10,500
Drawings
11,100
Balance carried forward 
54,500
215,500

215,500
2.
During the year ended 31 December 2021, discounts allowed amounted to Sh.873,000 while discounts received amounted to Sh.886,000. 
3.
During the year ended 31 December 2021, Grace Solo took goods valued at Sh.800,000 for her personal use. 
 
Required: 
(i)  Statement of profit or loss for the year ended 31 December 2021. 

(ii) Statement of financial position as at 31 December 2021. 

Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
2a
Regulation and other principles guiding the accounting profession
​​Outline four objectives of accounting regulatory bodies.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
2b
Analyzing Financial Statements
​ ​ ​​The following are the statements of financial position of Sabuni Ltd., a soap manufacturing company for year ended 30 June 2022 and 30 June 2021:

Sabuni Ltd.
Statements of financial position as at 30 June: 
2022
2021
Sh. “000”
Sh. “000”
Non-current assets:
Property, plant and equipment 
48,080
37,460
Current assets: 
Inventories
13,420
11,980
Accounts receivable 
6,020
5,120
Cash and cash equivalents
450
1,008
Total current assets
19,890
18,108
Total Assets 
67,970
55,568
Equity and liabilities: 
Share capital
4,160
3,800
Share premium 
540
450
Retained earnings 
34,182
21,618
Revaluation reserve 
1,080
720
Total equity 
39,962
26,588
Non-current liabilities: 
Long-term loan
13,500
14,400
Total non-current liabilities.
13,500
14,400
Current liabilities: 
Accounts payable
12,448
12,700
Accrued expenses
800
800
Bank overdraft
360
540
Current tax 
900
540
Total current liabilities 
14,508
14,580
Total equity and liabilities 
67,970
55,568

Additional information: 
  1. The cost of property, plant and equipment was Sh.45,740,000 on 1 July 2021. 
  2. The company disposed of a plant with a carrying value of Sh.3,120,000 on 1 April 2022. The original cost of this plant was Sh.4,800,000 and the company made a loss of Sh.120,000. 
  3. It is the policy of the company to depreciate all assets at the rate of 10% per annum on cost from date of purchase to date of sale. 
  4. The finance cost incurred and paid in the year ended 30 June 2022 was Sh.288,000, while a dividend of Sh.516,000 was paid for the same period.
  5. Sabuni Ltd. made a profit before tax of Sh.13,458,000 during the year ended 30 June 2022. 
  6. The income tax expense for the year ended 30 June 2022 was Sh.378,000. 

 Required: 
 Statement of cash flows in accordance with the requirement of “International Accounting Standard (IAS)7”, statement of cash flows, for the year ended 30 June 2022. 
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
3
Financial Statements of a manufacturing entity
​ ​ ​ ​ ​​Maji Matamu Ltd. is company that manufacturers Tamu juice. On 1 January 2021, 100,000 litres of Tamu juice were in stock. During the year ended 31 December 2021, the company manufactured 366,000 litres of juice. The company sold 400,000 litres of juice at a price of Sh.600 per litre. 
The following trial balance was extracted from the books of the company for year ended 31 December 2021:

Sh.“000”
Sh.“000”
240,000 ordinary shares of Sh.100 each  
24,000
Retained earnings (1 January 2021)
3,000
Factory land and building at cost (land Sh.11,000,000) 
22,700
Plant and machinery (at cost) 
35,000
Motor vehicles (at cost) 
4,050
Accumulated depreciation (1 January 2021) 
  • Factory building
7,680
  • Plant and machinery 
2,930
  • Motor vehicles 
950
Inventories (1 January 2021)
  • Raw materials
3,280
  • Work-in-progress 
11,000
  • Finished goods  
50,000
Sales
276,381
Purchases of raw materials 
166,101
Factory wages
3,810
Office salaries
1,250
Factory expenses 
13,490
Office expenses 
3,860
Allowance for doubtful debts 
380
Accounts receivable 
5,340
Accounts payable 
4,320
Bank
240
319,881
319,881

Additional information:
1.
Inventories as at 31 December 2021 were valued as follows:
1.
 Sh. “000”
Raw materials
3,560
Work-in progress 
18,400
Finished goods
33,000
2.
The allowance for doubtful debts is to be maintained at 5% of the accounts receivable.
3.
As at 31 December 2021, accrued factory expenses amounted to Sh.125,000 (including office expenses of Sh75,000) and prepaid factory expenses amounted to Sh.12,000 (including office rent and rates of Sh.7,000).
4.
Depreciation is provided on cost as follows:
Rate per annum
Factory buildings 
2%
Factory plant 
20%
Motor vehicles 
25%
5.
The inventory of finished goods of Tamu juice on 1 January 2021 was valued at factory cost.
6.
The directors of Maji Matamu decided to transfer all the Tamu juice manufactured to the warehouse at a mark-up of 10% from 1 January 2021.
7.
 The directors proposed a dividend of Sh.10 per share issued.

Required:
(a)
Manufacturing and statement of profit or loss for the year ended 31 December 2021.
(b)
Statement of financial position as at 31 December 2021.
  
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
4
Financial Statements of a company
​ ​ ​ ​The authorised share capital of MLO Ltd. consists of one million ordinary shares of Sh.10 each and 500,000 6% preference shares of Sh.10. 

 The following trial balance was extracted from the books of MLO Ltd. as at 30 June 2022: 

 Sh.“000”
 Sh.“000”
Ordinary shares fully paid (1 July 2021) 
6,000
6% preference shares 
5,000
Share premium 
500
Revaluation reserve
2,200
General reserve 
500
Retained earnings (1 July 2021) 
2,500
Land at cost  
20,000
Building at cost 
8,000
Machinery at cost 
10,000
Motor vehicles at cost 
8,000
Accumulated depreciation (1 July 2021): 
Building
600
Machinery
1,500
Motor vehicles  
3,200
Accounts receivable and accounts payable
1,400
600
Distribution expenses 
3,800
Administrative expenses 
1,800
12% bank loan 
6,000
Bank and cash balances 
2,100
Dividend paid -  Preference (interim) 
150
-  Ordinary (interim) 
600
Suspense account
750
Gross profit
30,740
Bank loan interest paid
240
Inventory (30 June 2022) 
4,000
60,090
60,090

Additional information:
1.
The suspense account relates to 50,000 new ordinary shares which were issued at a premium of 50% each on 31 January 2022.
2.
On 30 November 2021, the directors made a bonus issue of one share for every five shares held at par fully paid from the revenue reserves.
3.
Depreciation is provided per annum on straight line basis as follows: 
Asset
Rate per annum (%) 
Building
2½ 
Machinery
10
Motor vehicle 
20
4.
Corporate tax expenses for the year amounted to Sh.3,100,000.
5.
The directors proposed the following:
  • A transfer of Sh.2,500,000 to general reserve.
  • Payment of final dividends for preference shares.
  • A dividend of Sh.5 per share for ordinary shares.The additional ordinary shares also qualified for the final dividend.
6.
Land was revalued upwards to Sh.22 million on 1 July 2021.

Required:
(a)
Statement of profit or loss for the year ended 30 June 2022.
(b)
Statement of financial position as at 30 June 2022.

Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5a
Introduction to Accounting
​​Outline the information required by each of the following users of accounting information: 

 (i) Owners. 

 (ii) Customers. 

 (iii) Suppliers. 

 (iv) Lenders. 

 (v) Management.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5b
The Accounting Process and Systems
​​Discuss two benefits of using the double entry system of bookkeeping to an organisation.
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
5c
Accounting in the Public Sector
​​Explain three objectives of the International Public Sector Accounting Standards Board (IPSASB).
Want to join the discussion?

Log in to post comments and interact with tutors.

Login to Comment
All Periods
December 2025
August 2025
April 2025
December 2024
August 2024
April 2024
December 2023
August 2023
April 2023
December 2022
August 2022
April 2022
December 2021
Pilot December 2021
August 2021
May 2021
November 2020
November 2019
May 2019
November 2018
May 2018
November 2017
May 2017
November 2016
May 2016
November 2015
Pilot September 2015
Success!

Comment posted! We'll give you feedback soon.