During the year 2014 the following selected transactions affected the stocks of Lamu Port holdings On July 20 th the Company sold 2 million of its common stock shares, shs 2 par per share for shs18 70 of the selling price was received on 25 th July and a two year 10 was received for the remainder Thee shares ewre ot issued until the note was paid On October 20 th the company issued 5 million preferred shares, shs 5 par per share in exchange for 10 drenching Machines Each machine was built to to port specifications so that no cash price was available At the NSE Lamu Port stock was listed at shs12 50 On October 21 st 1 million of the common shares and 1 million of the preferred shares were sold for shs 45 million The common shares had not traded since July and their market value was not certain Required (a) Prepare appropriate entries for each event (b) Prepare the abridged financial position as at 31 st December 2014 (9 marks) 2 The following information relate to financial statements for the year ended 31 st Dec 2014 for Nana ltd that deal in the sale of foods and food processing machines The statements were produced on 1 st April 2014 On Nov15th , 2014 a former employee filed a law suit against Nana alleging broken promise and asked for damages of shs90,000 On 5 th January 2015 Nanas lawyer indicated that the likelihood of losing the law suit was possible but not probable On March 5 th , 2015 Nana agreed to pay the former employee shs 130,000 in return for withdrawing the law suit Nana grants a 1 year warranty for each processing machine sold Past experience indicates that the cost of satisfying warranties in approximately 2 of sales During 2014 sales of processing machines amounted to shs 23,500,000 Expenditures for warranty repairs costs were shs182,000 relating to 2014 sales and shs220,000 relating to 2013 sales Jan 1 st balance of warranty liability account was shs 240,000 Included in the food items sold in 2014 were coupons redeemable for a kitchen appliance at a rate of 5 coupons per appliance During 2014, 30,000 coupons were issued and and 5,000 coupons were redeemed Past experience indicates that that 60 of the coupons were never redeemed An inventory of ktchen kitchen appliance is maintained and a count show that 1,000 are on hand as at 31 st Dec 2014, with normal retail value of shs 20,000 and a cost to Nana of shs8,000 Prepare the necessary journal entries and state whether a disclosure note is needed

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During the year 2014 the following selected transactions affected the stocks of Lamu Port holdings. On July 20 th the Company sold 2 million of

During the year 2014 the following selected transactions affected the stocks of Lamu Port holdings.

On July 20^th the Company sold 2 million of its common stock shares, shs 2 par per share for shs18. 70% of the selling price was received on 25 th July and a two year 10% was received for the remainder. Thee shares ewre ot issued until the note was paid.
On October 20^th the company issued 5 million preferred shares, shs 5 par per share in exchange for 10 drenching Machines. Each machine was built to to port specifications so that no cash price was available. At the NSE Lamu Port stock was listed at shs12.50 .
On October 21^st 1 million of the common shares and 1 million of the preferred shares were sold for shs 45 million .The common shares had not traded since July and their market value was not certain.

Required ; (a) Prepare appropriate entries for each event.

(b) Prepare the abridged financial position as at 31^st December 2014.

(9 marks)

2..

The following information relate to financial statements for the year ended 31^st Dec 2014 for Nana ltd that deal in the sale of foods and food processing machines.. The statements were produced on 1^st April 2014.

On Nov15th , 2014 a former employee filed a law suit against Nana alleging broken promise and asked for damages of shs90,000. On 5^th January 2015 Nanas lawyer indicated that the likelihood of losing the law suit was possible but not probable. On March 5^th , 2015 Nana agreed to pay the former employee shs 130,000 in return for withdrawing the law suit.
Nana grants a 1-year warranty for each processing machine sold. Past experience indicates that the cost of satisfying warranties in approximately 2% of sales. During 2014 sales of processing machines amounted to shs 23,500,000. Expenditures for warranty repairs costs were shs182,000.relating to 2014 sales and shs220,000 relating to 2013 sales.Jan 1^st balance of warranty liability account was shs 240,000.
Included in the food items sold in 2014 were coupons redeemable for a kitchen appliance at a rate of 5 coupons per appliance. During 2014, 30,000 coupons were issued and and 5,000 coupons were redeemed. Past experience indicates that that 60% of the coupons were never redeemed.

An inventory of ktchen kitchen appliance is maintained and a count show that 1,000 are on hand as at 31^st Dec 2014, with normal retail value of shs 20,000 and a cost to Nana of shs8,000.

Prepare the necessary journal entries and state whether a disclosure note is needed