Unit: Public Finance and Taxation
14 Questions| Cash purchases | Sh. | ||
| 1 May 2017 | Furniture | 174,000 | |
| 5 May 2017 | Goods for sale | 232,000 | |
| 10 May 2017 | Stationery | 58,000 | |
| Purchase invoice transactions | Sh. | Payment date | |
| 10 May 2017 | Inventory for sale | 626,400 | 10 June 2017 |
| 14 May 2017 | Audit services | 145,000 | 30 May 2017 |
| 16 May 2017 | Inventory for sale | 696,000 | 14 July 2017 |
| 20 May 2017 | Generator fuel | 104,400 | 25 June 2017 |
Cash sales Credit sales | Sh. 348,000 1,102,000 |
| 1 | Basic salary Sh.165,000 per month (net of PAYE Sh.35,000 per month). |
| 2 | She is a registered member of the National Council for Persons with Disabilities (NCPD) and has been issued with a certificate of exemption by the Commissioner of Domestic Taxes. |
| 3 | The employer pays her a house allowance of Sh.40,000 per month. She utilises this amount to rent a house from Jibril Properties Agency for Sh.30,000 per month. |
| 4 | Nelly Zuriya has entered into an agreement with Nyumbani Medical Centre (NMC) for her personalised home care under which she pays Sh.18,000 per month. Under the agreement, NMC sends a therapist two times each week to her home. She provided documentary evidence to the Commissioner's satisfaction. |
| 5 | Chakaranda Ltd. pays Sh.28,000 each month to Beta Insurance Ltd. for Nelly's medical policy. |
| 6 | She is provided with a 2800cc saloon car leased from Decop Tours and Travel, a car-hire firm, in a chauffeur-inclusive package. The employer pays Sh.35,000 per month lease charges to Decop Tours and Travel. The car had cost Decop Tours and Travel Sh.2,000,000 in the year 2015. |
| 7 | During the year, she was sent on official duties outside her usual place of work for ten days, where she was paid subsistence and travelling allowance amounting to Sh.24,000 per day. She proved to the commissioner that Sh.3,000 per day out of the subsistence allowance she had received was reimbursement of expenses. |
| 8 | Chakaranda Ltd. paid Sh.26,000 on Nelly's behalf, being entrance fee to the Institute of Supplies Management (ISM) during the year. |
| 9 | She was provided with airtime credit of Sh.5,000 per month for her private purpose. |
| 10 | Nelly Zuriya's other income during the year comprised: |
| Sh. | |||
| Dividends | : Buzuri (K) Ltd. (net) | 28,500 | |
| : Zuhury Cooperative Society Ltd. (net) | 17,000 | ||
| : Transpalace Company (Zanzibar) Ltd. (gross) | 10,000 | ||
| Interest | : Housing Finance Company housing bonds (gross) | 420,000 | |
| : Treasury bills (net) | 4,250 | ||
| : Rubicon Bank Ltd. fixed deposit account (gross) | 15,000 | ||
| Capital gain | : Sale of private customised landrover at a profit | 120,000 |
| Sh. | |
| Processing machinery | 6,200,000 |
| Factory land and buildings | 10,500,000 |
| Delivery van | 2,600,000 |
| Water pump | 420,000 |
| Computers | 380,000 |
| Staff canteen construction | 960,000 |
| Lorry (4 tonnes) | 3,200,000 |
| Furniture | 180,000 |
| Digital weighing machines | 250,000 |
| Computer software | 320,000 |
| Staff clinic construction | 1,200,000 |
| Tractor | 2,800,000 |
| Income | Sh. | Sh. |
| Sales | 1,920,000 | |
| Foreign exchange gain realised | 620,000 | |
| Proceeds from sale of old machinery | 120,000 | |
| Discount received | 136,000 | |
| 2,796,000 | ||
| Expenditure | ||
| Interest on loan | 220,000 | |
| Stationery | 180,000 | |
| Loan repayment | 460,000 | |
| Legal fees | 380,000 | |
| Depreciation | 150,000 | |
| Directors emoluments | 360,000 | |
| Dividends | 980,000 | |
| Audit fees | 280,000 | |
| General expenses | 840,000 | |
| Bad debts | 96,000 | |
| Provision for income tax | 120,000 | 4,066,000 |
| Net loss | (1,270,000) |
| 1 | Audit fees include Sh.100,000 for auditing a subsidiary company and Sh.80,000 for the preparation revised accounts. |
| 2 | Legal fees include: | Sh. |
| Drafting a lease agreement (99 years) | 80,000 | |
| Breach of contract | 180,000 | |
| VAT penalties | 64,000 | |
| Legal cost of debt collection | 56,000 | |
| 3 | General expenses comprise: | |
| Office partitions | 120,000 | |
| Staff Christmas party | 250,000 | |
| Embezzlement by cashier | 60,000 | |
| Staff catering costs | 220,000 | |
| Stamp duty on land transfer | 190,000 |
| 4 | Bad debts represented the general provision as at the end of the year. |
| 5 | Capital allowances were agreed with the commissioner of revenue authority at Sh.220,000 for the year. |
| Sh."000" | Sh."000" | |
| Sales | 31,200 | |
| Less: Cost of sales | ||
| Opening stock | 9,900 | |
| Purchases | 17,100 | |
| Closing stock | (6,200) | (20,800) |
| Gross profit | 10,400 | |
| Add: Other income | ||
| VAT refund | 110 | |
| Dividend income (net) | 600 | |
| Profit on disposal of furniture | 1,576 | |
| Discount received | 440 | |
| Rental income | 1,917 | |
| 15,043 | ||
| Less: Expenses | ||
| Insurance premiums | 512 | |
| Legal fees | 1,660 | |
| Depreciation | 614 | |
| Repairs and maintenance | 2,400 | |
| VAT paid | 250 | |
| Interest on capital: Kayla | 235 | |
| Lucas | 197 | |
| Sundry expenses | 2,883 | |
| Motor vehicles expenses | 564 | |
| Custom duty | 243 | |
| Auditing expenses | 613 | |
| Bad and doubtful debts | 165 | |
| Rent and rates | 437 | |
| Salaries and wages | 1,574 | (12,547) |
| Net income | 2,496 |
| 1 | Both opening stock and closing stock were overcasted by 20%. |
| 2 | Insurance premiums include Sh.301,000 paid to insure Kayla's private car. |
| 3 | Legal fees include: |
| 3 | Legal fees include: | Sh. |
| Parking fines | 160,000 | |
| Settling a dispute with a customer | 109.000 | |
| Appeal against a tax assessment | 67.000 | |
| Court expenses for breach of a contract | 426.600 | |
| Preparation of tender documents | 250,700 | |
| 4 | Sundry expenses include: | Sh. |
| Interest charged on hire purchase | 453,000 | |
| Cash embezzled by the cashier | 602,000 | |
| Registration of a trade mark | 300,000 | |
| 5 | Repair and maintenance comprised: | Sh. |
| Fixing a broken door | 24,000 | |
| Installation of CCTV cameras | 867,000 | |
| Purchase of furniture | 560,000 |
| 6 | Salaries and wages included salaries to Kayla and Lucas of Sh.640,000 and Sh.480,000 respectively. |
| 7 | The partners took goods for personal use which had a cost price of Sh.240,000. The gross profit margin was 20%. |
| 8 | Bad and doubtful debts include: |
| Sh. | ||
| Specific provision for bad debts | 99,000 | |
| Provision for general bad debts | 66,000 |
| 9 | Capital allowances were agreed with the commission of revenue authority at Sh.1,574,000. |
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