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Accounting For Equities Question Paper

Accounting For Equities

Course:

Exam Year:2010

a)State and briefly discuss five irregular items that require special treatment and disclosure in the statement of income. (5 marks)
b)The accountants of Vinto Limited has availed the following information regarding the enterprise for the year ended December 31th, 2011.
Sh ‘000’
Advertising expenses 8,250
Profit on disposal of plant 10,030
Sales 1,754,530
Administrative expenses 52,070
Distribution and selling expenses 60,900
Sales returns and allowances 55,560
Cost of sales 1,401,090
Miscellaneous expense 1,870
Investment income 5,900
Interest expense 49,230
Income taxes expense 45,740
During the year the company decided to discontinue its pet food division, which produces pet food from residuals of the enterprise’s seafood processing operations. The operating income from the pet food division during the year was shs.350, 000 net of income taxes. In addition, several unusual operations were phased out during the year. The loss during the year from these operations, which do not qualify as discontinued operations under IFRS 5 was, shs.31, 840,000. The ordinary share capital during the period amounted to shs.50, 000,000. The ordinary shares had a par value of shs.10 each.

Required:
Using the multiple step formats, prepare the statement of income for the year ended December 31st 2011. Include Computation and presentation the EPS and any other relevant disclosures. (15 marks)

Accounting For Equities Question Paper

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