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Nafuu Foods Ltd. is a company in the hospitality industry. The following trial balance has been extracted from its books on 31 October 2001

      

Nafuu Foods Ltd. is a company in the hospitality industry. The following trial balance has
been extracted from its books on 31 October 2001:
You are provided with the following additional information:
faDec12009916.png
1. The balances of fixed asset accounts as at the beginning of the year and additions during
the year were as follows:
2faDec12009916.png
a. The company does not provide for depreciation on freehold properties or
properties held on lease with 50 years or more to run at the balance sheet date.
Properties held on lease with less than 50 years to run are depreciated over the
unexpired term. Items of equipment are depreciated over their estimated useful
life.
2. Some of the leasehold property in the books costing Sh.7, 500,000 had just 50 years
remaining on the lease in October 2000 and has not yet been transferred to the under
50 years category.
3. Disposals during the year included the following:
3faDec12009916.png
All the sale proceeds have been included in the revenue; no other adjustment has
been made.
The determination of depreciation expense for the year included in the trial balance
above has correctly been done for those properties not disposed of and included in
the under 50 years category at the beginning of the year.
4. Freehold land was revalued on an existing use basis by a professional valuer but the
Surplus of Sh.6,000.000 has not yet been brought into account.
5. The investments in the trial balance are temporary quoted securities. As at 31
October 2001 their market value was Sh.10,500,000. Income from the investments
of Sh.450,000 is included in revenue
6. Additional audit fees of Sh.600,000 need to be provided for.
7. The total balance of cash at bank includes Sh. 1,500,000 overdraft on one of the
accounts.
8. The corporation tax oil the year's profit has been estimated at Sh.27,000,000.
Corporation tax on the previous years profit was finally agreed with the tax authorities
to be Sh.3 10,000 more than had been provided for in the profit and loss account of
the year.
The directors have decided to recommend a final dividend of Sh.5 per ordinary share.
Required:
(a) A schedule showing fixed assets movements for the year ended 31 October 2001.
(b) Profit and loss account for the year ended 31 October 2001.
(c) Balance sheet as at 31 October 2001.

  

Answers


Mutiso
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Mutiso answered the question on November 16, 2018 at 18:26


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