Financial Accounting — 2020
KNEC Diploma in Supply Chain Management, Module I. Original examination questions with explained model answers for revision.
July 2020
Paper codes: 2903/102 (shared paper)
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan
Question 1(a) — 8 marks
Explain four users of accounting information and their information needs.
Model answer
- Owners/investors assess profitability, risk and return to decide whether to invest or retain their investment.
- Managers assess costs, performance and liquidity to plan operations and control resources.
- Lenders assess cash flows and solvency to judge whether interest and principal can be repaid.
- Suppliers assess short-term liquidity and payment history when deciding whether to grant trade credit.
Question 1(b) — 12 marks
Patoe logistics started a transport business on 1 January 2017. The following information relates to the firms’ motor vehicles. On 1 January 2019 motor vehicle KBQ 900R was sold for Ksh.2,800,000. The firm charges depreciation at the rate of 20% per annum on cost. For each of the years, 2017, 2018 and 2019 prepare: (i) motor vehicles account; (ii) accumulated depreciation on motor vehicles account; (iii) motor vehicles disposal account.
Motor vehicle registration number Date of purchase Cost Ksh KAB 861L 1 Jan 2017 5,000,000 KBQ 900R 1 Jan 2018 3,000,000 KCJ 100Q 1 Jan 2019 8,000,000
Model answer
| Year | KAB depreciation | KBQ depreciation | KCJ depreciation | Total Ksh |
|---|---|---|---|---|
| 2017 | 1,000,000 | 0 | 0 | 1,000,000 |
| 2018 | 1,000,000 | 600,000 | 0 | 1,600,000 |
| 2019 | 1,000,000 | 0 | 1,600,000 | 2,600,000 |
KBQ is disposed of on the first day of 2019, so it has no 2019 usage charge.
Motor vehicles — 2017
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Bank — KAB | 5,000,000 | Balance c/d | 5,000,000 |
| Total | 5,000,000 | Total | 5,000,000 |
Balance b/d: Ksh 5,000,000 Dr.
Motor vehicles — 2018
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance b/d | 5,000,000 | Balance c/d | 8,000,000 |
| Bank — KBQ | 3,000,000 | ||
| Total | 8,000,000 | Total | 8,000,000 |
Balance b/d: Ksh 8,000,000 Dr.
Motor vehicles — 2019
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance b/d | 8,000,000 | Disposal — KBQ | 3,000,000 |
| Bank — KCJ | 8,000,000 | Balance c/d | 13,000,000 |
| Total | 16,000,000 | Total | 16,000,000 |
Balance b/d: Ksh 13,000,000 Dr.
Accumulated depreciation — 2017
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance c/d | 1,000,000 | Income statement | 1,000,000 |
| Total | 1,000,000 | Total | 1,000,000 |
Balance b/d: Ksh 1,000,000 Cr.
Accumulated depreciation — 2018
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance c/d | 2,600,000 | Balance b/d | 1,000,000 |
| Income statement | 1,600,000 | ||
| Total | 2,600,000 | Total | 2,600,000 |
Balance b/d: Ksh 2,600,000 Cr.
Accumulated depreciation — 2019
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Disposal — KBQ | 600,000 | Balance b/d | 2,600,000 |
| Balance c/d | 4,600,000 | Income statement | 2,600,000 |
| Total | 5,200,000 | Total | 5,200,000 |
Balance b/d: Ksh 4,600,000 Cr.
KBQ disposal — 2019
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Motor vehicles cost | 3,000,000 | Accumulated depreciation | 600,000 |
| Profit to income statement | 400,000 | Bank | 2,800,000 |
| Total | 3,400,000 | Total | 3,400,000 |
Question 2(a) — 8 marks
Explain each of the following accounting concepts:
(i) going concern concept;
(ii) consistency concept;
(iii) business entity concept;
(iv) dual aspect concept.
Model answer
- Going concern: accounts assume the business will continue operating for the foreseeable future unless cessation/liquidation is intended or unavoidable.
- Consistency: use appropriate accounting policies consistently between periods, explaining justified changes.
- Business entity: account for the business separately from the owner’s personal transactions.
- Dual aspect: every transaction has equal debit and credit effects, preserving the accounting equation.
Question 2(b) — 12 marks
The following information related to the purchases ledger of Limo Hauliers for the month of January 2020. Prepare a purchases ledger control account.
Particulars Ksh 1 January 2020 purchases ledger balances — Dr 21,000 1 January 2020 purchases ledger balances — Cr 1,117,600 Discounts received 285,000 Purchases (including cash purchases of Ksh.304,000) 2,668,000 Contra settlements 73,800 Payments to creditors 2,318,400 Interest charged by creditors in over-due accounts 138,000 Returns outwards 53,800 31 January 2020 purchases ledger balance — Dr 28,800
Model answer
| Particulars | Ksh |
|---|---|
| Credit purchases: 2,668,000 − cash purchases 304,000 | 2,364,000 |
Purchases ledger control
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Opening debit balances | 21,000 | Opening credit balances | 1,117,600 |
| Discounts received | 285,000 | Credit purchases | 2,364,000 |
| Contra settlements | 73,800 | Interest charged | 138,000 |
| Payments | 2,318,400 | Closing debit balances c/d | 28,800 |
| Returns outwards | 53,800 | ||
| Balance c/d | 896,400 | ||
| Total | 3,648,400 | Total | 3,648,400 |
Balance b/d: Ksh 896,400 Cr.
Next-period balances: Ksh 896,400 Cr and Ksh 28,800 Dr; net payable Ksh 867,600.
Question 3(a) — 10 marks
The following information was extracted from the books of account of Metto Transports Limited. For the year ended 31 December 2019, prepare: (i) wages account; (ii) insurance account; (iii) rent income account.
Balances as at 31 December 2018 31 December 2019 Outstanding wages 130,000 142,000 Insurance paid in advance 43,000 53,000 Prepaid rent income 16,000 — Accrued rent income — 9,000 Payments made during 2019: Wages Ksh 163,000; Insurance Ksh 84,00 [as printed]. Rent received during the year was Ksh 70,000.
Model answer
The insurance payment is printed “84,00”; the main working interprets it as Ksh 84,000. If read literally as Ksh 8,400, the insurance expense becomes a credit of Ksh 1,600. Handwritten workings on the scan are not treated as original table data.
| Item | Working | Income / expense Ksh |
|---|---|---|
| Wages expense | 163,000 + 142,000 − 130,000 | 175,000 |
| Insurance expense | 84,000 + 43,000 − 53,000 | 74,000 |
| Rent income | 70,000 + 16,000 + 9,000 | 95,000 |
Wages account
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Bank payments | 163,000 | Opening accrual b/d | 130,000 |
| Closing accrual c/d | 142,000 | Income statement | 175,000 |
| Total | 305,000 | Total | 305,000 |
Insurance account
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Opening prepayment b/d | 43,000 | Closing prepayment c/d | 53,000 |
| Bank payments — interpretation stated | 84,000 | Income statement | 74,000 |
| Total | 127,000 | Total | 127,000 |
Rent income account
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Income statement | 95,000 | Opening advance income b/d | 16,000 |
| Bank receipts | 70,000 | ||
| Accrued income | 9,000 | ||
| Total | 95,000 | Total | 95,000 |
Question 3(b) — 10 marks
On 1 January 2020, Makandi Freight Limited has Ksh.620,000 cash in hand and Ksh.2,000,000 at the bank. During the month of January 2020, the following transactions took place. Prepare a three column cash book.
January Transaction 2 Cash sales banked Ksh.182,000. 3 Bought ribbons in cash Ksh.22,000. 8 Paid Omondi, a creditor, Ksh.388,000 by cheque in full settlement of his account of Ksh.400,000. 12 Received a cheque of Ksh.273,600 from Wetu Limited after allowing a cash discount of Ksh.10,400. 15 Paid salaries Ksh.172,000 in cash. 27 Withdrew Ksh.240,000 from bank for office use. 29 Fatuma, a debtor paid her account of Ksh.320,000 by cheque less 10% cash discount. 30 Deposited all the cash into the bank except Ksh.61,600.
Model answer
| Working | Ksh |
|---|---|
| Omondi discount: 400,000 − 388,000 | 12,000 |
| Fatuma discount: 320,000 × 10% | 32,000 |
| Fatuma cheque: 320,000 − 32,000 | 288,000 |
| Cash before deposit: 620,000 − 22,000 − 172,000 + 240,000 | 666,000 |
| Final deposit: 666,000 − 61,600 | 604,400 |
Dr — Receipts (discount allowed)
| Date | Details | Discount Ksh | Cash Ksh | Bank Ksh |
|---|---|---|---|---|
| 1 | Balance b/d | 0 | 620,000 | 2,000,000 |
| 2 | Sales | 0 | 0 | 182,000 |
| 12 | Wetu Ltd | 10,400 | 0 | 273,600 |
| 27 | Bank C | 0 | 240,000 | 0 |
| 29 | Fatuma | 32,000 | 0 | 288,000 |
| 30 | Cash C | 0 | 0 | 604,400 |
| Total | 42,400 | 860,000 | 3,348,000 |
Cr — Payments (discount received)
| Date | Details | Discount Ksh | Cash Ksh | Bank Ksh |
|---|---|---|---|---|
| 3 | Ribbons | 0 | 22,000 | 0 |
| 8 | Omondi | 12,000 | 0 | 388,000 |
| 15 | Salaries | 0 | 172,000 | 0 |
| 27 | Cash C | 0 | 0 | 240,000 |
| 30 | Bank C | 0 | 604,400 | 0 |
| End | Balance c/d | 0 | 61,600 | 0 |
| End | Balance c/d | 0 | 0 | 2,720,000 |
| Total | 12,000 | 860,000 | 3,348,000 |
Balances brought down: cash Ksh 61,600 Dr; bank Ksh 2,720,000 Dr. Contra entries are marked C.
Question 4(a) — 8 marks
On 1 March 2020, Mwembe started business with Ksh.5,000,000 in the bank. The following transactions took place during the month. Prepare ledger accounts to record the transactions above.
March Transaction 2 Bought a motor van for Ksh.1,200,000 paying by cheque. 5 Bought machinery for Ksh.40,000 from mega limited on credit. 12 Withdrew Ksh.100,000 from the bank for office use. 15 Bought machinery for Ksh.50,000 paying in cash. 21 Received a loan of Ksh.150,000 from JIBO bank. 25 Deposited Ksh.20,000 of the cash in hand into the bank account. 30 Bought machinery for Ksh.32,000 paying by cheque.
Model answer
Bank
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Mar 1 — Capital | 5,000,000 | Mar 2 — Motor van | 1,200,000 |
| Mar 21 — JIBO bank loan | 150,000 | Mar 12 — Cash | 100,000 |
| Mar 25 — Cash | 20,000 | Mar 30 — Machinery | 32,000 |
| Balance c/d | 3,838,000 | ||
| Total | 5,170,000 | Total | 5,170,000 |
Balance b/d: Ksh 3,838,000 Dr.
Capital
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance c/d | 5,000,000 | Mar 1 — Bank | 5,000,000 |
| Total | 5,000,000 | Total | 5,000,000 |
Balance b/d: Ksh 5,000,000 Cr.
Motor van
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Mar 2 — Bank | 1,200,000 | Balance c/d | 1,200,000 |
| Total | 1,200,000 | Total | 1,200,000 |
Balance b/d: Ksh 1,200,000 Dr.
Machinery
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Mar 5 — Mega Ltd | 40,000 | Balance c/d | 122,000 |
| Mar 15 — Cash | 50,000 | ||
| Mar 30 — Bank | 32,000 | ||
| Total | 122,000 | Total | 122,000 |
Balance b/d: Ksh 122,000 Dr.
Mega Ltd
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance c/d | 40,000 | Mar 5 — Machinery | 40,000 |
| Total | 40,000 | Total | 40,000 |
Balance b/d: Ksh 40,000 Cr.
Cash
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Mar 12 — Bank | 100,000 | Mar 15 — Machinery | 50,000 |
| Mar 25 — Bank | 20,000 | ||
| Balance c/d | 30,000 | ||
| Total | 100,000 | Total | 100,000 |
Balance b/d: Ksh 30,000 Dr.
JIBO bank loan
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance c/d | 150,000 | Mar 21 — Bank | 150,000 |
| Total | 150,000 | Total | 150,000 |
Balance b/d: Ksh 150,000 Cr.
Question 4(b) — 12 marks
On 31 December 2019, the trial balance of Mwamba Transporters failed to agree, the debits exceeding the credits by Ksh.960,000. A suspense account was opened for the difference. On investigations, the following errors were discovered. Prepare a: (i) general journal to correct the errors; (ii) suspense account; (iii) statement of corrected net profit if the reported profit was Ksh.79,000.
(i) Sales day book had been undercast by Ksh.1,000,000.
(ii) Sales of Ksh.2,500,000 to Mumo had been debited in Mamu’s account.
(iii) Rent expense account had been undercast by Ksh.70,000.
(iv) Discount received had been undercast by Ksh.30,000.
The sale of a motor vehicle at book value for Ksh.3,600,000 had been credited in the sales account.
Model answer
| Entry | Account / explanation | Debit Ksh | Credit Ksh |
|---|---|---|---|
| I | |||
| Dr Suspense | 1,000,000 | ||
| Cr Sales | 1,000,000 | ||
| II | |||
| Dr Mumo | 2,500,000 | ||
| Cr Mamu | 2,500,000 | ||
| III | |||
| Dr Rent expense | 70,000 | ||
| Cr Suspense | 70,000 | ||
| IV | |||
| Dr Suspense | 30,000 | ||
| Cr Discount received | 30,000 | ||
| Vehicle sale reclassified at book value | |||
| Dr Sales | 3,600,000 | ||
| Cr Motor vehicle — carrying value/disposal | 3,600,000 |
Suspense account
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Sales correction | 1,000,000 | Opening difference | 960,000 |
| Discount correction | 30,000 | Rent correction | 70,000 |
| Total | 1,030,000 | Total | 1,030,000 |
| Particulars | Ksh |
|---|---|
| Reported net profit | 79,000 |
| Add sales undercast | 1,000,000 |
| Less rent undercast | -70,000 |
| Add discount received undercast | 30,000 |
| Less vehicle proceeds wrongly treated as trading sales | -3,600,000 |
| Corrected result — net loss | -2,561,000 |
The vehicle was sold at book value, so there is no disposal gain. The vehicle correction reclassifies its net carrying amount; cost/accumulated-depreciation detail is not supplied.
Question 5(a) — 12 marks
The following balances were extracted from the books of account of Tibaland Transporters as at 31 December 2019. Prepare an income statement for the year ended 31 December 2019.
Particulars Ksh Motor vehicles at cost 1,094,000 Furniture and fittings 240,000 Inventory (1 January 2019) 960,000 Purchases 9,408,000 Sales 11,088,000 Discounts received 119,200 Discounts allowed 195,200 Returns inwards 16,000 Returns outwards 28,000 Rent received 44,000 Interest on loan 4,800 Bad debts 52,000 Salaries and wages 1,127,200 General expenses 138,400 Insurance 48,000 Additional information:
(i) Inventory as at 31 December 2019 was valued at Ksh.1,360,000.
(ii) Prepaid insurance as at 31 December 2019 was Ksh.12,000.
(iii) Depreciation: Furniture and fittings at 5% on cost; Motor vehicles at 20% on cost.
Model answer
| Adjustment | Working | Ksh |
|---|---|---|
| Insurance expense | 48,000 − 12,000 | 36,000 |
| Furniture depreciation | 240,000 × 5% | 12,000 |
| Vehicle depreciation | 1,094,000 × 20% | 218,800 |
Tibaland Transporters — Income statement, year ended 31 December 2019
| Particulars | Ksh |
|---|---|
| Net sales: 11,088,000 − 16,000 | 11,072,000 |
| Opening inventory | 960,000 |
| Net purchases: 9,408,000 − 28,000 | 9,380,000 |
| Less closing inventory | 1,360,000 |
| Cost of sales | 8,980,000 |
| Gross profit | 2,092,000 |
| Discounts received | 119,200 |
| Rent received | 44,000 |
| Total income | 2,255,200 |
| Discounts allowed | 195,200 |
| Interest on loan | 4,800 |
| Bad debts | 52,000 |
| Salaries and wages | 1,127,200 |
| General expenses | 138,400 |
| Insurance | 36,000 |
| Furniture depreciation | 12,000 |
| Vehicle depreciation | 218,800 |
| Total expenses | 1,784,400 |
| Net profit | 470,800 |
Question 5(b) — 8 marks
Boseli Logistics maintains a petty cash book on an imprest system with a weekly cash float of Ksh.150,000. On 1 February 2020, the petty cashier had Ksh.25,000 in hand. The following transactions took place during the first week of February 2020. Prepare a petty cash book using the following analysis columns: Travelling; Cleaning; Stationery.
February Transaction 3 Received reimbursement from the main cashier. 3 Paid air ticket Ksh.20,000. 4 Bought cleaning materials for Ksh.30,700. 4 Paid taxi Ksh.25,000. 5 Bought printing papers for Ksh.22,000. 6 Paid cleaners wages Ksh.10,000. 7 Bought note books Ksh.15,000. 8 Paid Ksh.3,500 bus fare.
Model answer
| Date | Details | Receipt Ksh | Payment Ksh | Travelling Ksh | Cleaning Ksh | Stationery Ksh |
|---|---|---|---|---|---|---|
| Opening | Balance b/d | 25,000 | ||||
| Start | Reimbursement | 125,000 | ||||
| 3 | Air ticket | 20,000 | 20,000 | |||
| 4 | Cleaning materials | 30,700 | 30,700 | |||
| 4 | Taxi | 25,000 | 25,000 | |||
| 5 | Printing papers | 22,000 | 22,000 | |||
| 6 | Cleaners wages | 10,000 | 10,000 | |||
| 7 | Notebooks | 15,000 | 15,000 | |||
| 8 | Bus fare | 3,500 | 3,500 | |||
| Totals | 150,000 | 126,200 | 48,500 | 40,700 | 37,000 | |
| Balance c/d | 23,800 |
Next reimbursement to restore the same imprest: Ksh 126,200.
Question 6(a) — 12 marks
The following transactions relate to Mata Enterprises for the month of February 2020. Prepare: (i) Purchases journal; (ii) Purchases returns journal; (iii) Sales journal; (iv) Sales returns journal.
February Transaction 1 Sold goods for Ksh.280,000 to Kimani Traders on credit. 2 Bought goods for Ksh.256,000 from Lama Enterprises on credit. 8 Kimani Traders returned goods worth Ksh.50,000. 10 Sold goods for Ksh.200,000 to Vena Limited on credit. 19 Sold goods for Ksh.145,000 to Lengo Limited on credit. 22 Lengo Limited returned goods worth Ksh.28,000. 25 Purchased goods for Ksh.57,000 from Xenox Limited on credit. 28 Returned goods worth Ksh.7,200 to Xenox Limited.
Model answer
Purchases journal
| Date | Supplier | Ksh |
|---|---|---|
| 2 | Lama Enterprises | 256,000 |
| 25 | Xenox Ltd | 57,000 |
| Total | 313,000 |
Purchases returns journal
| Date | Supplier | Ksh |
|---|---|---|
| 28 | Xenox Ltd | 7,200 |
| Total | 7,200 |
Sales journal
| Date | Customer | Ksh |
|---|---|---|
| 1 | Kimani Traders | 280,000 |
| 10 | Vena Ltd | 200,000 |
| 19 | Lengo Ltd | 145,000 |
| Total | 625,000 |
Sales returns journal
| Date | Customer | Ksh |
|---|---|---|
| 8 | Kimani Traders | 50,000 |
| 22 | Lengo Ltd | 28,000 |
| Total | 78,000 |
Question 6(b) — 8 marks
The following is the cash book (bank column) and bank statement of Pingal Enterprises for the month of February 2020. Prepare: (i) an updated cash book; (ii) a bank reconciliation statement.
Cash book (Bank column)
Dr Ksh Cr Ksh Bal. b/d 100,000 Abi 70,000 Joyce 50,000 Jane 80,000 Alice 140,000 John 65,000 Bal. c/d 75,000 Total 290,000 Total 290,000 Bank Statement
Particulars Dr Ksh Cr Ksh Balance Ksh Balance b/d 100,000 Joyce 50,000 150,000 Standing orders 35,000 115,000 Credit transfer 90,000 205,000 Bank charges 45,000 160,000 Jane 80,000 80,000
Model answer
Updated bank account
| Dr — Particulars | Ksh | Cr — Particulars | Ksh |
|---|---|---|---|
| Balance b/d | 75,000 | Standing orders | 35,000 |
| Credit transfer | 90,000 | Bank charges | 45,000 |
| Balance c/d | 85,000 | ||
| Total | 165,000 | Total | 165,000 |
Balance b/d: Ksh 85,000 Dr.
| Particulars | Ksh |
|---|---|
| Bank statement balance | 80,000 |
| Add uncredited Alice cheque | 140,000 |
| Less unpresented cheques: Abi 70,000 + John 65,000 | -135,000 |
| Adjusted cash-book balance | 85,000 |
Question 7(a) — 8 marks
Explain each of the following source documents:
(i) invoice;
(ii) payment voucher;
(iii) credit note;
(iv) debit note.
Model answer
- Invoice: sets out goods/services supplied, quantities, prices and the amount due from the customer.
- Payment voucher: an authorised internal document supporting a payment, identifying payee, reason, amount and approval.
- Credit note: informs a customer that the amount owed has been reduced, for example because goods were returned.
- Debit note: communicates a debit adjustment, for example an additional amount charged by a supplier or a buyer’s notification requesting a credit for returns.
Question 7(b) — 12 marks
The following is the receipts and payments account of Duda Social Club for the year ended 31 December 2019. Additional information: (i) Bar inventory as at 1 January 2019 was valued at Ksh.43,200; (ii) Bar inventory as at 31 December 2019 was valued at Ksh.38,400. Prepare an income and expedited account for the year ended 31 December 2019.
Receipts Ksh ‘000’ Payments Ksh ‘000’ Balance b/d 9,360 Office equipment 100,000 Members subscriptions 199,400 Salaries and wages 28,800 Entrance fees 128,240 Bar supplies 169,200 Bar sales 243,360 Rent and rates 98,400 Competition fees 103,280 Secretary’s honoraria 72,000 Competition prizes 57,600 Bar men’s salary 21,600 Balance c/d 136,040 Total 683,640 Total 683,640
Model answer
The cash table is headed Ksh ‘000’, but inventories are stated in Ksh. The main answer honours those units by multiplying cash-table figures by 1,000. The alternative if the ‘000’ heading is a printing error is given below. Entrance fees are treated as revenue because no capitalisation policy is stated.
Bar trading working — Ksh
| Particulars | Ksh |
|---|---|
| Bar sales: 243,360 × 1,000 | 243,360,000 |
| Opening inventory | 43,200 |
| Purchases: 169,200 × 1,000 | 169,200,000 |
| Less closing inventory | 38,400 |
| Bar cost of sales | 169,204,800 |
| Gross profit | 74,155,200 |
| Less bar men’s salary: 21,600 × 1,000 | 21,600,000 |
| Bar surplus | 52,555,200 |
Duda Social Club — Income and expenditure account, year ended 31 December 2019 (Ksh)
| Particulars | Ksh |
|---|---|
| Members subscriptions | 199,400,000 |
| Entrance fees | 128,240,000 |
| Competition fees | 103,280,000 |
| Bar surplus | 52,555,200 |
| Total income | 483,475,200 |
| Salaries and wages | 28,800,000 |
| Rent and rates | 98,400,000 |
| Secretary’s honoraria | 72,000,000 |
| Competition prizes | 57,600,000 |
| Total expenditure | 256,800,000 |
| Surplus | 226,675,200 |
Office equipment is capital expenditure and the opening/closing cash balances are not income or expenses.
Alternative: all table figures treated as Ksh
| Particulars | Ksh |
|---|---|
| Bar cost of sales: 43,200 + 169,200 − 38,400 | 174,000 |
| Bar surplus: 243,360 − 174,000 − 21,600 | 47,760 |
| Other income: 199,400 + 128,240 + 103,280 | 430,920 |
| Total income | 478,680 |
| Other expenditure: 28,800 + 98,400 + 72,000 + 57,600 | 256,800 |
| Surplus if the ‘000’ heading is erroneous | 221,880 |