1. Retention money
This is the amount retained by the client to be paid after the completion the contract. This is to account for any sub standard work or penalties payable due to late completion
2. Escalation clause
- This is a clause in the contract that allows for adjustment of contract the price due to changes in prices of raw materials and labor.
- The objective of the escalation clause is to protect both the client and contractor from unfavorable changes in prices
Wilfykil answered the question on February 11, 2019 at 08:01
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Determine:
(i) Trading, profit and loss account for the year ended 31 March 2006.
(ii) Balance sheet as at 31 March 2006
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Kopesha Limited has been in business for several years dealing in electronic goods. All the firm’s goods are sold on hire purchase terms. The following trial balance extracted from the books of the firm as at 31 March 2006:
Date posted:
February 11, 2019
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Distinguish between “leasing” and “hire purchase” highlighting how each is accounted for.
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Distinguish between “leasing” and “hire purchase” highlighting how each is accounted for.
Date posted:
February 11, 2019
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Answers (1)
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Determine:
a) The value of closing stock as at 31st March 2007
b) Hire purchase debtors account as at 31 March 2007
c) Trading and profit and loss...
(Solved)
Maridadi company ltd,sells high resolution television sets on both cash basis and hire purchase terms each television costs sh 16,000 and is sold at sh20,000 on cash basis. If a television set is sold on hire purchase terms a deposit of sh5,000is paid followed by ten installments of sh2,000 each . The company recognizes gross profit on television sets sold on hire purchase terms based on cash collected in the period and excludes television sets n hire-purchase terms from its closing stock. The company has a policy of valuing television sets repossessed from hire-purchase customers who have defaulted on payment at 60% of the unpaid installments. Repossessed television sets are sold on cash basis at the same gross profit rate television sets sold on cash
basis. Provided below is the trial balance of the company as at 31` March 2007
Date posted:
February 11, 2019
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Answers (1)
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For each of the years ended 31 December 2006, 2007 and 2008, prepare extracts of financial statements using the percentage of completion approach in line...
(Solved)
Date posted:
February 11, 2019
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Answers (1)
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Differentiate between defined benefit and defined contribution plans
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Differentiate between defined benefit and defined contribution plans
Date posted:
February 11, 2019
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Answers (1)
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Explain the disclosure requirements for contracts in progress at the end of the reporting period in accordance with International Accounting Standard (IAS) 11, Construction Contracts.
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Explain the disclosure requirements for contracts in progress at the end of the reporting period in accordance with International Accounting Standard (IAS) 11, Construction Contracts.
Date posted:
February 11, 2019
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Answers (1)
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Explain two methods of accounting for construction contracts.
(Solved)
Explain two methods of accounting for construction contracts.
Date posted:
February 11, 2019
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Answers (1)
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Three firms of accounts decided to amalgamate into a new firm Cheloti Gusera Kandie & Co. with effect from 1 April 1999. Until 31 March...
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Three firms of accounts decided to amalgamate into a new firm Cheloti Gusera Kandie & Co. with effect from 1 April 1999. Until 31 March 1999 Apopo. Cheloti and Chuma were partners in Apopo Cheloti & Co. sharing capital and profits equally. Guserwa. Kurgat and
Ochieng were partners in Guserwa & Co. sharing capital and profits in the ratio 4:4:1. Kandie was a sole practitioner.
The balance sheets of the firms as at 31 March 1999 were as follows:
Date posted:
February 11, 2019
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Answers (1)
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Ali and Bali are in partnership trading as A and B Retailers. Similarly, Cheche and Dunga are in partnership trading as C and D Traders....
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Ali and Bali are in partnership trading as A and B Retailers. Similarly, Cheche and Dunga are in partnership trading as C and D Traders. It was mutually agreed that as at 1 January 2004, the partnership businesses be amalgamated into one firm, ABC and D Enterprises. The profit and loss sharing ratios of the partners both in the old and new partnership were as follows:
Date posted:
February 11, 2019
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Answers (1)
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Jembe and Panga were sole traders manufacturing farm implements. On 31 March 2004, they amalgamated and traded as partners sharing profits and losses in the...
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Jembe and Panga were sole traders manufacturing farm implements. On 31 March 2004, they amalgamated and traded as partners sharing profits and losses in the ratio of 3:2. One year later on 31 March 2005, they converted the partnership into a limited liability company called Shamba Ltd.
No. adjustments have been made to record the amalgamation and conversion but the balance sheets for the sole traders as at 31 March 2004 and the partnership as at 31 March 2005 were as follows:
Date posted:
February 8, 2019
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Answers (1)
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Kuni and Moto were partners in a business of logging and saw milling sharing profits and
losses equally. The partnership balance sheet as at 31 December...
(Solved)
Date posted:
February 8, 2019
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Answers (1)
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A and B Advocates and M and N Advocates were practicing firms of advocates. On 1 January 2006, they agreed to amalgamate the partnerships into...
(Solved)
A and B Advocates and M and N Advocates were practicing firms of advocates. On 1 January 2006, they agreed to amalgamate the partnerships into one firm Able and Mine Advocates. The accounts of the separate partnerships have been prepared annually to 31
December.
The agreed profit and loss sharing ratios in the old and new firms were as follows
Date posted:
February 8, 2019
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Answers (1)
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List and briefly explain five attributes of reliable financial statements as promulgated in the IFRSs(International Financial Reporting Standards) framework.
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List and briefly explain five attributes of reliable financial statements as promulgated in the IFRSs(International Financial Reporting Standards) framework.
Date posted:
February 8, 2019
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Answers (1)
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Ali, Baba and Cheche were in partnership sharing profits and losses in the ratio 2:2:1 respectively. Following serious disagreement, the partners decided to dissolve the...
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Ali, Baba and Cheche were in partnership sharing profits and losses in the ratio 2:2:1 respectively. Following serious disagreement, the partners decided to dissolve the partnership. The proceeds from sale of assets were to be paid to the individual partners after all expenses and liabilities had been paid.
The balance sheet as at 30 September 2007 when the partners made the decision to dissolve the partnership was as follows:
Required:
a) Briefly explain the rule in Garner Vs Murray.
b) A statement showing how cash realized would be distributed to the partners.
c) Realization account, cash at bank account and capital accounts to close off the books of the
partnership.
Date posted:
February 8, 2019
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Answers (1)
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Meme, Noni and Zenah are partners sharing profits and losses in the ratio 3:2:1 respectively, after allowing for interest on fixed capitals t the rate...
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Meme, Noni and Zenah are partners sharing profits and losses in the ratio 3:2:1 respectively, after allowing for interest on fixed capitals t the rate of 5% per annum. The partners prepare their partnership accounts annually to 30 September.
The balance sheet of the partnership as at 31 March 2008 was as follows:
Date posted:
February 8, 2019
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Answers (1)
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X and Y are partners with equal capital contributions in a wholesale business and sharing profits and losses among X,Y and Z in the ratio...
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X and Y are partners with equal capital contributions in a wholesale business and sharing profits and losses among X,Y and Z in the ratio of 2:2:1respectively. The partners however disagreed after six months of operation and dissolved the partnership on 30th November 2009. No adjustment has been made to record the amalgamation. The following statements of financial position as at 31st May 2009 and 30th November 2009 are provided.
Date posted:
February 8, 2019
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Answers (1)
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Michael and Stella were in partnership sharing profits and losses equally until 30 April 2011 when they decided to convert the partnership into a limited...
(Solved)
Michael and Stella were in partnership sharing profits and losses equally until 30 April 2011 when they decided to convert the partnership into a limited company, Michelle Ltd. The company was registered immediately
The following trial balance was extracted on 30 April 2012; one year after the conversion
Date posted:
February 8, 2019
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Answers (1)
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Able, Patient and Hastine were in partnership sharing profits and losses in the ratio of 5:3:2 respectively. Due to irreconcilable differences they agreed to dissolve...
(Solved)
Able, Patient and Hastine were in partnership sharing profits and losses in the ratio of 5:3:2 respectively. Due to irreconcilable differences they agreed to dissolve the partnership. Any realisation of assets was distributed to the partners on realization after all expenses and liabilities were paid.
The following is the statement of financial position as at 31 August 2012 when the resolution to dissolve the partnership was effected
Required;-
(i) Statement of cash distribution to the partners.
(ii) Realization account,
(iii) Bank account.
(iv) Partners' capital accounts.
Date posted:
February 8, 2019
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Answers (1)
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Alice and Benard Advocates and Maneno and Neno Advocates were practicing firms of Advocates. On 1 July 2012, they agreed to amalgamate their partnership businesses...
(Solved)
Alice and Benard Advocates and Maneno and Neno Advocates were practicing firms of Advocates. On 1 July 2012, they agreed to amalgamate their partnership businesses into one firm and called it Abliman advocates. The accounts of the separate partnerships have been prepared annually to 30 June 2012.
The agreed profit and loss sharing ratios in the old and new firms are as follows:
Date posted:
February 8, 2019
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Answers (1)
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Capps Ltd.., a manufacturing company, leased production equipment from Deux Ltd On 1st January 2008. The lease provided for an immediate rental payment of sh....
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Capps Ltd.., a manufacturing company, leased production equipment from Deux Ltd On 1st January 2008. The lease provided for an immediate rental payment of sh. 10 million and three other annual rentals of shs. 10 million commencing 1 January 2009. The equipment has an estimated useful life of four years with a nil residual value. The cash selling price of equipment is shs.32.1 million. Interest rate implicit in the lease is 17 per cent per annum.
Required:-
For the years ended 31 December 2008, 2009, 2010 and 2011, show in the books of Capps Ltd:-
i) Extracts of the profit and loss account.
ii) Extracts of the balance sheet.
Date posted:
February 8, 2019
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Answers (1)