CPA
Foundation Leval
Financial Accounting November 2019
Suggested solutions

Workings

W1

Statement of affairs
Assets Land and buildings Equipment's Furniture and fittings Motor vehicle Accounts receivable Prepaid rates Inventory Bank Liabilities 15% Bank Loan Accounts payable Accrued electricity Capital	Sh 000 12,000 2,700 300	Sh 000 18,000 4,800 2,400 6,000 3,600 5,400 180 1,620 42,000 15,000 27,000 42,000

W2

Bank a/c
Balance b/d Accounts receivable	Sh 000 1,620 357,000 358,620	Loan Office equipment Salaries Rates insurance and electricity Interest on loan Accounts payable Drawings (Balancing figure) Balance c/d	Sh 000 6,000 600 36,210 23,280 900 252,000 24,000 15,630 358,620

W3

Accounts receivable a/c
Balance b/d sales	Sh 000 5,400 360,000 365,400	Discount allowed Bad debt Bank Balance c/d	Sh 000 960 240 357,000 7,200 365,400

W4

Accounts payable a/c
Discount received Bank Balance c/d	Sh 000 900 252,000 3,000 255,900	Balance b/d Purchase (Balance figure)	Sh 000 2,700 253,200 255,900

W5

Office equipment
Balance b/d Bank	Sh 000 4,800 600 5,400	Depreciation Balanced c/d	Sh 000 1,560 3,840 5,400

Regina Rai Income Statement For The Year Ended 30 September 2019
Sales Less: Cost of sales Opening stock Add purchases Less: closing stock Gross profit Add: other incomes Discount received Less: Expenses Discount allowed Bad debts Depreciation equipments Depreciation furniture (2,400 - 1,920) Depreciation "Motor vehicle 6,000-4,500 Salaries Rates, Insurance and electricity 23,280 + 180-240+ 480-300 Interest on loan(15% x 12,000 x 6/12)+(15% x 6,000 x 6/12) Net profit	Sh 000 3,600 253,200 (4,800) 960 240 1,560 480 1,500 36,210 23,400 1,350	Sh 000 360,000 (252,000) 108,000 900 108,900 (65,700) 43,200

W1

Determination of closing stock inventory

Mark up = 3/7

Margin = 3/(7+3) = 3/10

GP = 3/10 x 360,000 = 108,000

GP = Sales - cost of sales

108,000 = 360,000 - C.O.S

C.O.S = 360,000 - 108,000 = 252,000

C.O.S = opening + purchases - closing inventory

252,000 = 3,600 + 253,200 - Closing Inventory

Closing Inventory = 3,600 + 253,200 - 252,000 = 4,800

Regina Rai Statement Of Financial Position At At 30th September
Non Current Assets Land and buildings Equipments Fixtures and fittings Motor vehicles Current assets Inventory Accounts receivable Bank balance Prepaid rates Total assets Capital and liabilities Capital Add: net profit Less: Drawings Non current liabilities 15% Bank Loan Current liabilities Account payables Accruals - Electricity - Loan interest	Sh 000 18,000 3,840 1,920 4,500 4,800 7,200 15,630 240 56,130 27,000 43,200 (24,000) 6,000 3,000 480 450 56,130

(i) Income statement and app: opriation account for the year ended 30 June 2019.

Income statement and appropriation account for the year ended 30 June 2019
Gross profit Expenses Depreciation - Motor vehicles 20% x 59,100 Depreciation" office furniture 15%×36,960 Electricity 1,824+822 Insurance and rates 211 + 822 Directors fees 7,580 + 3,750 Audit fees Bad debts Wages and salaries Telephone expenses Debenture interest 1,440 + 1,460 General expenses Profit before tax Income tax expense 30% x 30,855 profit after tax Add: Retained profit balance bld Less: Transfer to general reserves Less: Proposed preference dividend 10% x 60,000 Less: Proposed ordinary dividend 10% × 150,000 Retailed profit balance c/d	Sh 000 11,820 5,544 2,646 1,665 11,250 7,200 510 42,300 930 2,880 4,662	Sh 000 122,262 (91,407) 30,855 (9,256.5) 21,598.6 36,378 (18,000) (6,000) (15,000) 18,976.5

(ii) Statement of financial position as at 30 June 2019

Statement of financial position as at 30 June 2019

Non Current Assets Land and buildings Motor vehicles 40,200 - 11,800 Furniture and equipment 11,160 - 5,544 Current assets Inventory Accounts receivables and prepayments Bank Prepaid insurance Equity and liabilities Equity Ordinary share capital Preference share capital Retained earnings General reserves 42,000+ 18,000 Non current liabilities Debenture Current liabilities Accounts payables and accruals Directors fees Audit fees Tax Debenture interest accrued Proposed dividend 6,000 + 15,000 Accrued electricity

Sh 000 198,060 28,380 5,616 95,778 40,800 11,694 450 380,778 150,000 60,000 18,976.5 60,000 24,000 20,583 7,500 7,200 9,256.5 1,440 21,000 822 380,778

Workings

W1

Statement affairs
Assets Bank Cash Club House Sports equipments Furniture and fittings Canteen inventory Subscription in arrears Investment Total assets Liabilities Subscriptions Outstanding electricity and water Canteen payables Accumulated depreciation 12,600 + 8,100 Accumulated fund Total liabilities	Sh 000 8,100 1,350 4,050 20,700	Sh 000 50,000 6,000 153,000 36,000 27,000 9.000 10,800 36,000 327,800 34,200 293,600 327,800

W2

Subscription a/c
Accrued balance b/d income and expenditure Pre paid Balance c/d	Sh.000 10,800 142,200 20,700 173,700	Balance b/d Bank I&E (written off) Accrued Balance c/d	Sh.000 8,100 144,000 9,000 12,600 173,700

W3

Sports Equipment
Balance b/d Bank	Sh 000 36,000 30,000 66,000	Disposal Balance c/d	Sh 000 18,000 48,000 66,000

Total depreciation charge on disposed equipment's
20/100 x 180,000 x 2 = 7,200

Depreciation charge for the year
20/100 x 48,000 = 9,600

W4

Accumulated depreciation Account
Disposal Balance b/d	Sh 000 7,200 15,000 22,200	Balance/b/d income expenditure	Sh 000 12,600 9,600 22,200

W5

WA Canteen payables a/c
Bank Balance c/d	Sh 000 30,150 5,400 35,550	Balance b/d Credit purchases	Sh 000 4,050 31,500 35,550

W6

Dance ticket Dance expenses

27,000 (13,500) 13,500

W7

Disposal a/c
Cost	Sh 000 18,000 18,000	Accumulated depreciation Bank I&E	Sh 000 7,200 9,000 1,800 18,000

(a) Canteen income statement for the vear ended 30 June 2019.

Canteen income statement for the year ended 30th June 2019
Sales 40,500 + 4,500 Cost of sales Opening inventory Add purchases Less: Closing stock Gross profit Canteen Wages Canteen expenses Net profit	Sh 000 9,000 31,500 (11,250)	Sh 000 45,000 (29,250) 15,750 (4,500) (2,250) 9,000

(b) Income and expenditure statement for the year ended 30 June 2019.

Furahi Sana Social club Income and Expenditure Statement for the year ended 30 June 2019
Incomes Subscription Canteen profits Dance profit 27,000 - 13,000 Donations Investment income Interest income Expenditure Electricity and water 4,050 - 1,350+ 3,300 Secretary allowances Training fees Groundsmen wages Travel expenses Sports pavilion expenses Depreciation- Sports equipement - Furniture & fittings 10/100×27,000 Subscription written off Loss on disposal Surplus	Sh 000 142,200 9,000 13,500 30,000 9,000 5,400 209,100 (6,000) (67,500) (22,500) (18,000) (18,900) (8,100) (9,600) (2,700) (9,000) (1,800) 45,000

(c) Statement of financial position as at 30 June 2019

Furahi Sana Social club Statement of Financial Position as at 30 June 2019
Non Current Assets Club house 153,000+ 18,000 Sports Equipment's 48,000 - 15,000 Furniture and fittings 27,000 - 8,100 - 2,700 Investment Current Assets Inventory Subscription in arrears Cash 42,450 + 4,500 Equipment receivable Bank 50,000 - 18000 Funded By Accumulated fund Surplus Current liabilities Canteen payable Accrued Electricity Subscription in Advance	Sh 000 171,000 33,000 16,200 36,000 11,250 12,600 46,950 9,000 32,000 368,000 293,600 45,000 5,400 3,300 20,700 368,000

Sales ledger control a/c
Bal b/d Credit sales	Sh 000 124,960 1,046,920 1,171,880	Receipt (972,574 - 16,422) Credit transfer omitted Bad debts Discount allowed Contra set Balance c/d	Sh 000 956,152 2,772 8,960 25,438 40,544 138,014 1,171,880