In Jan 1 st 2013 Tom and Jerry decided to form a partnership. Their balance sheets appeared as…
In Jan 1st 2013 Tom and Jerry decided to form a partnership. Their balance sheets appeared as follows:-
| Tom | Jerry | ||||
| Balance Sheet | Balance Sheet | ||||
| As at Jan 1st 2013 | As at Jan 1st 2013 | ||||
| Current Assets | Current Assets | ||||
| Cash | 500 | Cash | 3000 | ||
| Debtors | 1000 | Debtors | 2000 | ||
| Stock | 500 | ||||
| Fixed Assets | Fixed assets | ||||
| Buildings | 10000 | Van | 50000 | ||
| Furniture | 50000 | ||||
| 62000 Jerry capital 55000 | |||||
Current Liabilities
Creditors 1000
Tom Capital 61000 62000
There would be no change in the value of assets and liabilities and each partner was going to retain his claim in the new business business.
Required
General journal entries to record the formation of Tom and Jerry partnership. (10 mrks)
b) On Jan 31st 2013 Situka could not find all the accounting records of his road side kiosk. However the following figures for the month of January 2013 was available:-
Inventory on Jan 1 4000
Purchases for the month 52000
Inventory on Jan 31st 6000
It was not possible to find the sales record but the mark up for all his purchases is constant at 20% Required:-
Prepare his Trading Account for the month of January 2013. (10 mrks)
c) Maendeleo co. Ltd has issued 1 million Ordinary Shares of sh.1; 300000, 4% Cumulative shares of sh.10 and 200000, 5% Non Cumulative Preference Shares of sh.10. (5 mrks) Profits available for dividends :-
year 1 year 2 year 3 year 4 800000 100000 200000 1500000
Required
Determine the amount paid for each class of shares every year.
d) Highlight the differences between a cash flow statement and an income statement. (5 mrks)
