related to accounting for international consignments (6 marks) (Total: 15 marks) QUESTION TWO Alpha Ltd. supplies cooking gas in 10 kilogramme cylinders which are returnable after use. The cylinders are purchased at Sh. 700 each and are valued at Sh. 600 for stocktaking purposes. On issue of the cylinders to customers, a deposit of Sh.1,000 is paid per cylinder of which Sh.800 is refunded to customers on return of a cylinder within a period of three months. On 1 January 2017, there were 8,000 cylinders in the company's warehouse and 15,000 cylinders in the hands of customers in respect of which the return period had not expired. During the year ended 31 December 2017, the company purchased 16,000 new cylinders at the normal purchase price but returned 200 cylinders to the supplier due to defects detected on inspection. A credit of Sh. 140,000 was given by the supplier for the returned cylinders. For the year ended 31 December 2017, customers were issued with 75,000 cylinders and they returned 65,000 cylinders. As at 31 December 2017, the customers held 10,000 cylinders which had been issued within the previous three months. For safety purposes the cylinder returned by customers were thoroughly inspected and repaired for any damages or defects. On average, Sh. 50 was spent as inspection and repair costs per cylinder returned by a customer. Due to wear and tear: 500 cylinders were confirmed to be unsafe for use. These were sold to a scrap metal dealer at Sh. 200 each. On 31 December 2017. stocktaking revealed that there were only 3,500 cylinders in the warehouse. The deficit was treated as a loss. Required: 1) Containers stock account as at 31 December 2017 (4 marks) (ii) Containers suspense account as at 31 December 2017 (3 marks) (iii) Argue the case for and against the system of returnable containers for a logistic service organization using an example of your choice (8 marks) (Total: 15 marks) QUESTION THREE related to accounting for international consignments (6 marks) (Total: 15 marks) QUESTION TWO Alpha Ltd. supplies cooking gas in 10 kilogramme cylinders which are returnable after use. The cylinders are purchased at Sh. 700 each and are valued at Sh. 600 for stocktaking purposes. On issue of the cylinders to customers, a deposit of Sh.1,000 is paid per cylinder of which Sh.800 is refunded to customers on return of a cylinder within a period of three months. On 1 January 2017, there were 8,000 cylinders in the company's warehouse and 15,000 cylinders in the hands of customers in respect of which the return period had not expired. During the year ended 31 December 2017, the company purchased 16,000 new cylinders at the normal purchase price but returned 200 cylinders to the supplier due to defects detected on inspection. A credit of Sh. 140,000 was given by the supplier for the returned cylinders. For the year ended 31 December 2017, customers were issued with 75,000 cylinders and they returned 65,000 cylinders. As at 31 December 2017, the customers held 10,000 cylinders which had been issued within the previous three months. For safety purposes the cylinder returned by customers were thoroughly inspected and repaired for any damages or defects. On average, Sh. 50 was spent as inspection and repair costs per cylinder returned by a customer. Due to wear and tear: 500 cylinders were confirmed to be unsafe for use. These were sold to a scrap metal dealer at Sh. 200 each. On 31 December 2017. stocktaking revealed that there were only 3,500 cylinders in the warehouse. The deficit was treated as a loss. Required: 1) Containers stock account as at 31 December 2017 (4 marks) (ii) Containers suspense account as at 31 December 2017 (3 marks) (iii) Argue the case for and against the system of returnable containers for a logistic service organization using an example of your choice (8 marks) (Total: 15 marks) QUESTION THREE