NUMBER ONE The draft Balance Sheets of GTI Limited, KBD Limited and QBY Limited are as...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
NUMBER ONE The draft Balance Sheets of GTI Limited, KBD Limited and QBY Limited are as follows: UNA Limited and KMN Limited are both listed on the Nairobi Stock Exchange: Balance sheets as at 30 September 1996 PPE (Net book value) Investments: At cost:: Shares in KBD Ltd At Valuation: Shares in QBY Ltd Current assets Inventory Receivables Cash at bank GTI Ltd KBD Ltd QBY Ltd Sh. million Sh. million Sh. million 684 430 330 600 360 484 320 270 180 150 90 80 40 664 550 400 Current liabilities Bank overdraft 60 Payables 170 120 Current Tax 60 50 Proposed dividends 100 100 390 270 Net current assets 274 280 1,558 1070 Financed by: Sh.10 Ordinary shares 500 500 10% Preference shares 0 80 Revaluation reserve 0 30 Profit and loss account 1058 460 1.558 1070 550 + 180 220 550 0 300 Notes 1. 2. 3. 4, 5. GTI Ltd. purchased 60% of the ordinary share capital and 30% of the preference share capital of KBD Ltd. on 1 October 1992, when the balances on the Profit and Loss Accounts of GTI Ltd., KBD Ltd. and QBY Ltd. were Sh.899 million, Sh.360 million and Sh. 150 million respectively. KBD Ltd. had purchased 70% of the ordinary share capital of QBY Ltd. on 1 October 1991 for Sh.330 million when the balance on the Profit and Loss Accounts of GTI Ltd., KBD Ltd. and QBY Ltd. were Sh.856 million, Sh.330 million and Sh. 130 million respectively. The investment was revalued upwards by Sh.30 million on 30 September 1995. The directors of KBD Ltd. had decided to revalue the investment at Sh.378 million at 30 September 1996, but this has not yet been reflected in the books. KBD Ltd. makes sales to both GTI Ltd. and QBY Ltd. at normal selling price (cost plus a mark-up of 33/%). At 30 September 1996, items purchased by GTI Ltd. and QBY Ltd. from KBD Ltd. remaining unsold had cost Sh.24 million and Sh. 16 million respectively. Group policy on unrealised intra-group profits is in line with current international practice i.e. unrealised profits are eliminated in full from the book value of assets, and from the interests held by the group and the minority interest in respective proportion to their holdings in the company which had made the profit. GTI Ltd. and KBD Ltd. have not yet accounted for the dividends receivable. Intra-group balances are included in Receivables and payables as follows: 4. All proceeds from life policies are to be shared in profit sharing ratios. 5. Profit for the year was Sh.111,600. 6. At the close of business the bank balance was Sh.110,400 including the amount received from the insurance company. 7. All the remaining assets were sold and the net proceeds after settling liabilities was Sh.372,000. Legal fees paid was Sh.960. 8. Partners drawings were: Kim Ndritiu Ryan Sh. 37,800 40,500 23,700 9. The life assurance contract was reassigned and new policies issued to Kim and Ryan for Sh.27,000 and Sh.18,000 respectively. 10. The partnership winding up process was completed by 30 August 1997. Required: The following ledger accounts necessary for all the closing entries including final payments to the partners: (a) Capital accounts: (b) Current accounts (c) Loan account; (d) Life assurance fund account; (e) Cash book; (f) Life assurance policy account: (g) Net assets account. (5 marks) (4 marks) (1 mark) (1 mark) (3 marks) (2 marks) (4 marks) (Total: 20 marks) NUMBER THREE Annex Ltd is a company which deals in antiques. The Company is based in London and operates in the UK, but also has a profitable outlet in San Francisco, California, which is managed by one of the directors on his frequent trips to the States. Separate records are kept of the outlet's transactions b the American staff. The following trial balances were extracted from the books of Annex Ltd at 31 December 2003 M You are required to prepare for the year ended 31 December 2003 (a) The trial balance of the San Francisco outlet, converted at 'historic rate', after making the year end adjustments, and indicating clearly the rates of the conversion used. (b) The trading and profit and loss account of London, San Francisco and the combined business in columnar form. (c) The balance sheet of the combined business (3 marks) (10 marks) (7 marks) (Total: 20 marks) 4 NUMBER ONE The draft Balance Sheets of GTI Limited, KBD Limited and QBY Limited are as follows: UNA Limited and KMN Limited are both listed on the Nairobi Stock Exchange: Balance sheets as at 30 September 1996 PPE (Net book value) Investments: At cost:: Shares in KBD Ltd At Valuation: Shares in QBY Ltd Current assets Inventory Receivables Cash at bank GTI Ltd KBD Ltd QBY Ltd Sh. million Sh. million Sh. million 684 430 330 600 360 484 320 270 180 150 90 80 40 664 550 400 Current liabilities Bank overdraft 60 Payables 170 120 Current Tax 60 50 Proposed dividends 100 100 390 270 Net current assets 274 280 1,558 1070 Financed by: Sh.10 Ordinary shares 500 500 10% Preference shares 0 80 Revaluation reserve 0 30 Profit and loss account 1058 460 1.558 1070 550 + 180 220 550 0 300 Notes 1. 2. 3. 4, 5. GTI Ltd. purchased 60% of the ordinary share capital and 30% of the preference share capital of KBD Ltd. on 1 October 1992, when the balances on the Profit and Loss Accounts of GTI Ltd., KBD Ltd. and QBY Ltd. were Sh.899 million, Sh.360 million and Sh. 150 million respectively. KBD Ltd. had purchased 70% of the ordinary share capital of QBY Ltd. on 1 October 1991 for Sh.330 million when the balance on the Profit and Loss Accounts of GTI Ltd., KBD Ltd. and QBY Ltd. were Sh.856 million, Sh.330 million and Sh. 130 million respectively. The investment was revalued upwards by Sh.30 million on 30 September 1995. The directors of KBD Ltd. had decided to revalue the investment at Sh.378 million at 30 September 1996, but this has not yet been reflected in the books. KBD Ltd. makes sales to both GTI Ltd. and QBY Ltd. at normal selling price (cost plus a mark-up of 33/%). At 30 September 1996, items purchased by GTI Ltd. and QBY Ltd. from KBD Ltd. remaining unsold had cost Sh.24 million and Sh. 16 million respectively. Group policy on unrealised intra-group profits is in line with current international practice i.e. unrealised profits are eliminated in full from the book value of assets, and from the interests held by the group and the minority interest in respective proportion to their holdings in the company which had made the profit. GTI Ltd. and KBD Ltd. have not yet accounted for the dividends receivable. Intra-group balances are included in Receivables and payables as follows: 4. All proceeds from life policies are to be shared in profit sharing ratios. 5. Profit for the year was Sh.111,600. 6. At the close of business the bank balance was Sh.110,400 including the amount received from the insurance company. 7. All the remaining assets were sold and the net proceeds after settling liabilities was Sh.372,000. Legal fees paid was Sh.960. 8. Partners drawings were: Kim Ndritiu Ryan Sh. 37,800 40,500 23,700 9. The life assurance contract was reassigned and new policies issued to Kim and Ryan for Sh.27,000 and Sh.18,000 respectively. 10. The partnership winding up process was completed by 30 August 1997. Required: The following ledger accounts necessary for all the closing entries including final payments to the partners: (a) Capital accounts: (b) Current accounts (c) Loan account; (d) Life assurance fund account; (e) Cash book; (f) Life assurance policy account: (g) Net assets account. (5 marks) (4 marks) (1 mark) (1 mark) (3 marks) (2 marks) (4 marks) (Total: 20 marks) NUMBER THREE Annex Ltd is a company which deals in antiques. The Company is based in London and operates in the UK, but also has a profitable outlet in San Francisco, California, which is managed by one of the directors on his frequent trips to the States. Separate records are kept of the outlet's transactions b the American staff. The following trial balances were extracted from the books of Annex Ltd at 31 December 2003 M You are required to prepare for the year ended 31 December 2003 (a) The trial balance of the San Francisco outlet, converted at 'historic rate', after making the year end adjustments, and indicating clearly the rates of the conversion used. (b) The trading and profit and loss account of London, San Francisco and the combined business in columnar form. (c) The balance sheet of the combined business (3 marks) (10 marks) (7 marks) (Total: 20 marks) 4
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
A Hydrogen atom has one proton in the nucleus and one electron in the shell. In a classic model of the atom, in a certain state, this electron is in a circular orbit around the nucleus with an...
-
1. In a test for asymmetric information in the French auto insurance market, Chiappori and Salani [2000] look at the relationship between the comprehensiveness of an individuals policy and the cost...
-
The mean activity coefficients for aqueous solutions of NaCl at 25C are given below. Confirm that they support the DebyeHckel limiting law and that an improved fit is obtained with the extended law....
-
Current Ratio Calculate the company's current ratio for 2019 and compare the result to the industry average. Use the following financial data for Brenner Instruments Sales revenue.. Cost of goods...
-
Schiavo Corporation has a desired rate of return of 8 percent. Frank Rodomil is in charge of one of Schiavos three investment centers. His center controlled operating assets of $2,500,000 that were...
-
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 8%. The...
-
During the spin cycle the time dependent angular speed of a washing machine drum is given by the equation ( t ) = at + bt 2 - ct 4 where a = 2.8 rad/s 2 , b = 0.35 rad/s 3 and c = 0.035 rad/s 5 . At...
-
How does change pattern help understand the core of the problem?
-
List four scenarios where change pattern can be applied.
-
List some BOs for this term and explain their role.
-
What are some of the anticipated problems that are likely to emerge while designing change pattern.
-
Discuss various contexts where you can apply this pattern.
-
The sum of three consecutive multiples of 4 is 444. Find the products of these three multiples. 1. 3239424 2. 2983680 3. 3464384 4. 3793920 3109800 5.
-
-x/2 x/4 If A = -x/2 and A-1 =6 then x equals
-
Recognized limitations of financial statement analysis include each of the following except: a. companies in the same industry using different accounting methods. b. inflation. c. different levels of...
-
How do horizontal analysis and vertical analysis of financial statements differ?
-
What is a business segment? Why are gains and losses from a discontinued segment reported in a separate section of the income statement?
Study smarter with the SolutionInn App