Financial Accounting 2 BBA 212 Instructions 1 Answer one (1) question Q. 1 The trial balance of Betway PLC as at 31Mach 2016 was as follows: Cr Dr K 200,000 300,000 25,000 15,000 21,000 K Preference share capital: K0.50 shares Ordinary share capital: K1 shares General reserve Exchange reserve Retained profits as on 31 March 2015 Inventory 31 March 2015 Sales 184,000 1,320,000 34,000 Returns inwards Purchases 620,000 Carriage inwards Wages (putting goods into a saleable condition) Wages: Warehouse staff Wages and salaries: Sales staff Wages and salaries: Administrative staff Motor expenses (see Note (ii)) General distribution expenses General administrative expenses Loan note interest 6,000 104,000 40,000 67,000 59,000 29,000 17,000 12,000 2,000 Royalties receivable Directors' remuneration 5,000 84,000 10,000 14,000 Bad debts Discounts allowed Discounts received 11,000 Plant and machinery at cost (see Note (iii) Provision for depreciation: Plant and machinery (see Note (iv)) Motor vehicles at cost (see Note (ii) Provision for depreciation: Motors (see Note (iv)) Goodwill 240,000 72,000 120,000 48,000 200,000 24,000 188,000 Development costs Trade accounts receivable Trade accounts payable Bank overdraft (repayable on demand) 45,000 7,000 Bills of exchange payable (all due within one year) Loan notes (redeemable in three years' time) Preference dividend 7,000 30,000 12,000 40.000 2,106.000 2, 106, 000 Notes: Inventory of finished goods on 31 March 2016 K163, 000. Motor expenses and depreciation Administrative1/ Plant and Machinery depreciation to be apportioned: Cost of Sales/10: Distribution2/10 Administrative/10- (iv) on motors to be apportioned: Distribution/, (ii) (iii) Depreciate the following non-current assets on cost: Motor vehicles 20%, Plant and machinery 15% (v) Accrue corporation tax on profits of the year K38, 000. Required: You are to draw up: (a) A detailed income statement for the year ending 31 March 2016 in accordance with the Companies Act and International Accounting Standards (15 marks). (b) A Statement of Financial Position as at 31 March 2016 in accordance with the Companies Act and International Accounting Standards ( 15 marks). Total 30 marks Q. 2 You have been nominated to give a talk to students at ZICAS University, in Lusaka on accounting of certain accounting items. Required: a) Prepare summary guidelines you will use for presentation on the following items: i) ii) Leases A statement of cash flows ( 15 marks) b) Discuss whether the accounting standards are necessary in the preparation of financial statements (15 marks). Total 30 marks Financial Accounting 2 BBA 212 Instructions 1 Answer one (1) question Q. 1 The trial balance of Betway PLC as at 31Mach 2016 was as follows: Cr Dr K 200,000 300,000 25,000 15,000 21,000 K Preference share capital: K0.50 shares Ordinary share capital: K1 shares General reserve Exchange reserve Retained profits as on 31 March 2015 Inventory 31 March 2015 Sales 184,000 1,320,000 34,000 Returns inwards Purchases 620,000 Carriage inwards Wages (putting goods into a saleable condition) Wages: Warehouse staff Wages and salaries: Sales staff Wages and salaries: Administrative staff Motor expenses (see Note (ii)) General distribution expenses General administrative expenses Loan note interest 6,000 104,000 40,000 67,000 59,000 29,000 17,000 12,000 2,000 Royalties receivable Directors' remuneration 5,000 84,000 10,000 14,000 Bad debts Discounts allowed Discounts received 11,000 Plant and machinery at cost (see Note (iii) Provision for depreciation: Plant and machinery (see Note (iv)) Motor vehicles at cost (see Note (ii) Provision for depreciation: Motors (see Note (iv)) Goodwill 240,000 72,000 120,000 48,000 200,000 24,000 188,000 Development costs Trade accounts receivable Trade accounts payable Bank overdraft (repayable on demand) 45,000 7,000 Bills of exchange payable (all due within one year) Loan notes (redeemable in three years' time) Preference dividend 7,000 30,000 12,000 40.000 2,106.000 2, 106, 000 Notes: Inventory of finished goods on 31 March 2016 K163, 000. Motor expenses and depreciation Administrative1/ Plant and Machinery depreciation to be apportioned: Cost of Sales/10: Distribution2/10 Administrative/10- (iv) on motors to be apportioned: Distribution/, (ii) (iii) Depreciate the following non-current assets on cost: Motor vehicles 20%, Plant and machinery 15% (v) Accrue corporation tax on profits of the year K38, 000. Required: You are to draw up: (a) A detailed income statement for the year ending 31 March 2016 in accordance with the Companies Act and International Accounting Standards (15 marks). (b) A Statement of Financial Position as at 31 March 2016 in accordance with the Companies Act and International Accounting Standards ( 15 marks). Total 30 marks Q. 2 You have been nominated to give a talk to students at ZICAS University, in Lusaka on accounting of certain accounting items. Required: a) Prepare summary guidelines you will use for presentation on the following items: i) ii) Leases A statement of cash flows ( 15 marks) b) Discuss whether the accounting standards are necessary in the preparation of financial statements (15 marks). Total 30 marks