Question 3 The authorized share capital of The Make It Happen Company Ltd. includes: 50 000...

Transcribed Image Text:

Question 3 The authorized share capital of The Make It Happen Company Ltd. includes: 50 000 ordinary shares at $4 each 30 000 8% preference shares at $6 each At the end of the year ending September 30, 2015, the following information was extracted from the books of the company: Issued share capital: 40 000 ordinary shares at $4 $ 160 000 20 000 8% preference shares at $6 120 000 10% debentures 40 000 Debenture interest paid 4 000 Provision for depreciation on fixed assets 18 900 Bad debt 3 600 Machinery and equipment 150 000 Motor vehicle 45 000 Debtors 80 000 40 000 158 700 67 000 Creditors Bank and cash Wages and salaries Wages and salaries owing Rent paid Rent paid in advance Stock at September 30, 2015 Insurance Insurance prepaid Bad debts recovered Depreciation on fixed assets for the year Light and power Sales 6 400 26 500 8 500 30 000 5 000 1000 900 9 100 15 000 400 000 Cost of goods sold Dividend paid to ordinary shareholder Dividend to preference shareholder was paid in full Commission received Old provision for bad debts at September 30. 2014 New provision for bad debts at September 30. 2015 Transfer to Capital Reserve Balance of profit from previous year 220 000 13 000 12 000 6 000 3.000 61.000 29 600 Prepare for Make It Happen Company Ltd: A. Income Statement (9 marks) B. Appropriation Account (3 marks) C. Statement of Financial Position (8 marks) D. Explain TWO (2) differences between Revenue and Capital reserves, and provide an example of both. (5 marks) (Total 25 marks) Question 3 The authorized share capital of The Make It Happen Company Ltd. includes: 50 000 ordinary shares at $4 each 30 000 8% preference shares at $6 each At the end of the year ending September 30, 2015, the following information was extracted from the books of the company: Issued share capital: 40 000 ordinary shares at $4 $ 160 000 20 000 8% preference shares at $6 120 000 10% debentures 40 000 Debenture interest paid 4 000 Provision for depreciation on fixed assets 18 900 Bad debt 3 600 Machinery and equipment 150 000 Motor vehicle 45 000 Debtors 80 000 40 000 158 700 67 000 Creditors Bank and cash Wages and salaries Wages and salaries owing Rent paid Rent paid in advance Stock at September 30, 2015 Insurance Insurance prepaid Bad debts recovered Depreciation on fixed assets for the year Light and power Sales 6 400 26 500 8 500 30 000 5 000 1000 900 9 100 15 000 400 000 Cost of goods sold Dividend paid to ordinary shareholder Dividend to preference shareholder was paid in full Commission received Old provision for bad debts at September 30. 2014 New provision for bad debts at September 30. 2015 Transfer to Capital Reserve Balance of profit from previous year 220 000 13 000 12 000 6 000 3.000 61.000 29 600 Prepare for Make It Happen Company Ltd: A. Income Statement (9 marks) B. Appropriation Account (3 marks) C. Statement of Financial Position (8 marks) D. Explain TWO (2) differences between Revenue and Capital reserves, and provide an example of both. (5 marks) (Total 25 marks)