Question 1 You have been provided with the following financial statements for Mwaka Ltd for the year ended 31 December, 2018: Statement of profit or loss: Sales revenue Cost of sales Gross profit Investment income received Administrative expenses Distribution expenses Operating profit Interest paid Taxation Dividends Net profit Statements of financial position: Assets Non-current assets Accumulated depreciation Net book value Investments Current assets: Inventory 138,000 Accounts receivable Cash and bank Total assets: Equity and liabilities: Equity Ordinary shares of Shs 4,000 each Share premium Retained profits Non-current liabilities: Bank loan 45,600 - 596,350 300,000 34,000 84,800 57,400 Shs '000' 377,900 (220,700) 157,200 23,000 (35,700) (43,900) 100,600 (17,000) (17,500) (20,000) 46,100 2018 Shs '000' 2017 Shs '000' 346,000 (51,900) 294,100 95,000 35,500 30,600 455,200 260,000 27,000 38,700 55,000 475,000 (122,250) 352,750 60,000 25 November, 2019

2018 Shs '000' Current liabilities: Accounts payable 35,550 Taxation 17,000 Dividends 25,000 Bank overdraft 42,600 596,350 2017 Shs '000' 43,000 13,500 18,000 455,200 Additional information: 1 During the year ended 31 December 2018, a non-current asset which cost Shs 50,000,000 and with net book value Shs 35,000,000 was sold for Shs 18,000,000. 2 The increase in share capital was a result of issue of shares which were paid for fully. Required: Prepare, for Mwaka Ltd, for the year ended 31 December 2018, a statement of cash flows using the indirect method, in accordance with IAS 7: Statement of Cash flows. (Hint: Show all the workings)

Question 2 The following balances were extracted from the assets register of DISCLA Ltd as at 31 December, 2015. The company's financial year ends on 31 December. Cost Accumulated depreciation Shs '000' Machinery 350,000 Motor vehicles 90,000 Shs '000' 126,000 27,000 The following transactions took place: 1 Acquired more machinery on 1 July, 2016 at a cost Shs 80,000,000; transport cost from Mombasa to Kampala Shs 2,000,000, non-refundable taxes Shs 30,000,000, installation cost Shs 4,000,000 and wages to the machine operator Shs 1,200,000. 2 Purchased a branded delivery van Shs 40,000,000 on 30 August 2016. Included in the cost was the branding expense Shs 5,000,000. DISCLA Ltd also incurred Shs 1,500,000 to replace the tyres. 3 The machinery bought on 1 January, 2015 at Shs 50,000,000 with accumulated depreciation Shs 18,000,000 was disposed of on 30 March 2017 for Shs 33,000,000. 4 A motor vehicle which was acquired on 1 April, 2015 at Shs 30,000,000 was involved in an accident and was sold off on 28 December 2017 as scrap Shs 5,000,000. 5 DISCLA Ltd depreciates machinery at 20% on cost and all motor vehicles at 10% on straight line basis. 6 The company provides full year depreciation in the year of purchase and nil in the year of disposal. 7 The company's cashbook (Bank column) had a debit balance Shs 240,800,000. All transactions were made through the bank.

Required: Prepare, for DISCLA Ltd, for the years ended 31 December 2016 and 2017, the ledger accounts for: (a) Non-current assets (b) Accumulated depreciation (c) Disposal of assets (d) Bank (NB: Prepare individual accounts for (a)-(c) above)

Question 3 The following trial balance was extracted from the books of Jaja Trading Co. Ltd. for the year ended 31 March 2019: Capital Accounts receivable/ accounts payable Gross profit/loss Machinery Motor vehicle Bad debts written off Salaries Utilities Furniture & fittings Accumulated depreciation: Machinery Motor vehicles Furniture & fittings Debits Shs '000' 54,600 50,400 100,000 40,000 2,080 6,400 4,500 24,000 Credits Shs '000' 233,700 83,200 10,000 4,000 2,400 25 November, 2019 Page 4 of 9

Financial Accounting - Paper 10 Debits Shs '000' Discounts 450 Credits Shs '000' 5,600 60,240 4,000 403,140 Retained earnings Drawings Provision for doubtful debts Cash Bank Closing inventory Burnt stock 3,960 4,800 50,950 55,500 5,500 403,140 Additional information: 1 Utilities Shs 500,000 relates to the year ending 31 March, 2020. 2 Accrued salaries amounted to Shs 1,800,000. 3 The provision for doubtful debts is to be reduced to Shs 3,000,000. 4 The company charges depreciation on non-current assets at 10% per annum on cost. 5 The company acquired a bank loan Shs 20,000,000 at the year-end but this transaction was not recorded anywhere in the books of account.

Required: Prepare, for Jaja Trading Co. Ltd., for the year ended 31 March 2019, a statement of: (a) profit or loss. (8 marks) (b) financial position. (12 marks) Question 4

Quality Furniture Limited (QUFUL) produces wood products but also imports finished furniture from Dubai to increase on its stock. On 30 June 2017, the company had the following balances: Balances on 1 July 2016: Inventory of timber Work in progress Finished goods (furniture) Transactions during the year: Purchase of timber Purchase of furniture for resale Carriage inwards on timber Carriage inwards furniture for resale Shs '000' 36,400 24,840 215,000 350,600 120,000 800 580 25 November, 2019

Return outwards of damaged timber Discount received on bulk timber purchases Discount received on furniture for resale Wages: Direct Indirect Saw mills Loose tools Lighting & power Salaries to saw mill operators Consumables (e.g. nails, vanish) Rent of workshop Insurance of factory non-current assets General factory expenses Capital Accounts receivable Sales Accounts payable Returns of furniture damaged Cash & bank balances Retained earnings Shs '000' 10,500 5,550 2,650 4,620 6,540 90,000 50,000 12,000 3,600 8,600 6,000 2,500 5,880 314,402 64,200 610,300 84,900 10,300 180,000 164,158 Additional information: 1 Closing inventory as at 30 June, 2017 was as follows: Inventory of timber Work in progress Finished goods (furniture) Shs '000' 140,500 25,220 130,500 2 Depreciation of non-current asset is charged at 20% on cost. 3 Inventory of furniture bought from Dubai Shs 20,000,000 (cost) had a realisable value Shs 18,000,000. Shs 20,000,000 was included in the closing inventory of finished goods. 4 90% of lighting & power relates to factory. 5 Okemwa, the proprietor of QUFUL, took a dining table worth Shs 1,800,000 for home use. This was not recorded in the books of account.

Required: Prepare, for Quality Furniture Limited, for the year ended 30 June 2017: (a) Statement of manufacturing cost (14 marks) (b) Trading account (6 marks) Question 5 (a) In preparation of financial statements, certain assumptions, concepts, conventions and principles are applied to provide the essential framework for expressing accounting information.

Required: Explain the following accounting concepts: (i) Substance over form (ii) Money measurement (iii Accrual (iv) Matching (b) The components of financial statements are the building blocks which together form the complete set of financial statements and help in understanding the financial status of an entity. Hence, preparation of financial statements is the summarizing phase of accounting.

Required: Explain the different components of financial statements. (c) In corporate governance, a company's articles of association alongside the memorandum of association form the company's constitution.

Required: Explain the contents of Articles of Associations. (6 marks)

John, Musa and Joseph were partners running a soft drinks depot. Their profit and loss sharing ratio is 3:2:1 respectively. However, the partners decided to dissolve the partnership. The partnership statement of financial follows: Non-current assets: Land and buildings Plant and machinery Motor vehicle Current assets: Inventory Trade receivables Bank Total assets Capital accounts: John Musa Joseph Current accounts: John Musa Joseph Current liabilities: Trade payables Loan from Musa Total equity and liabilities Additional information: Shs '000' 76,000 60,000 16,000 31,000 25,000 13,000 63,000 55,000 48,000 15,000 (9,500) 11,000 23,500 15,000 position as at 31 December, 2017 was as Shs '000' 152,000 69,000 221,000 166,000 16,500 38,500 221,000 1 2 3 The assets were realized as follows: Shs '000' Land and buildings Plant and machinery Inventory Realization expenses 90,000 45,000 28,000 3,500 Musa took over the motor vehicle at Shs 14,000,000 as part settlement of his loan. Shs 23,000,000 was received from trade receivables while John took over settlement of trade payables Shs 10,000,000 and the balance was paid off less 10% discount. Required: Prepare, for the partnership, the following ledger accounts: (a) Realisation (b) Bank (c) Partners'capital(columnarform) (d) Loan (e) Tradepayables