INSTRUCTIONS: Attempt ALL the FOUR Questions QUESTION ONE The following information regarding the business of A Patel has been given to you: Statement of Financial Position as at December 31, 2000 Shs'000' Shs. '000' Non Current Assets: Premises 25,000 12.000 37,000 Plant Current Assets: 11,000 10,000 5,000 3.000 Inventory Accounts Payable Cash at Bank Cash at hand 29. 66,000 Total Assets Capital and Liabilities: Capital Non current liabilities Loan from Bank Current Liabilities 34,000 20,000 Accounts payable Total Capital and Liabilities 12.000 66,000 Additional Information Purchased machinery costing with cash of Sh.150,000, (0 Proceeds from sale of machinery, Shs.10,000 (cost of Sh.45,000 (ii) accumulated depreciation shs.32,000). Purchased investments, shs.30,000. Sold investments, Shs.85,000 (cost, shs.78,000) Purchased machinery in exchange for secured bank loan, (shs.75,000) Issued shares, shs. 50,000. Converted secured bank loan to equity shares, shs.20,000. (iii) (iv) (v) (vi) (vii) (viii) Redeemed secured bank loan, Shs.15,000. (ix) Write-off shs.14,000 of debtors when a customer became insolvent and recognized bad debt expense of Shs. 1 0,000. Required (a) Using the indirect method, prepare the cash flow statement for Mavuno Ltd [20 marks How will the following transactions appear on the cash flow statement of a company? (b) () Acquisition of assets of another company by issuance of shares for Shs.160,000. Conversion of 10,000 preference shares of Shs. 100 each to 50,000 equity shares of Shs. 10 at a premium of Shs. 10 per share. (ii) Entering into a finance lease for a new plant with a fair value of Shs.230,000 (iii) 15 marks Question Four Your family friend is the proprietor of Jomvu Ltd. He started the business after executive training programme though he is not well versed with accounting principles, he is able to keep his accounting records after which he seeks your help. Upon perusing his last financial year draft of statement of comprehensive income, you identify the following anomalies Credit sales amounting to Shs.82,500 were made on 31" December, 2011 but the same has not been recognized in the books 0) Purchases returns amounting to Shs.64,000 were dispatched on 31 December, (ii) 2011 but no entry has been made in the books to record the same. Inventory as at 31" December, 2011 had been overvalued by Shs.49,000. (ii) 3333 38