Q1.

Patson Corp
JOURNAL ENTRIES
Date Deatails Debit Credit
10-Jan-12 Treasury Stock, Common (20,000 shares * K12) 240,000
Cash 240,000

2-Mar-12 Retained Earnings (100,000 shares - 20,000 shares = 80,000 * K1.50) 120,000
Common dividend Payable 120,000

31-Mar-12 Common dividend Payable 120,000

Cash 120,000

11-Nov-12 Cash (12000 shares * K13) 156,000

Treasury Stock, Common 12,000
Paid-in Capital 144,000

25-Nov-12 Cash (8,000 shares * K9.5) 76,000

Treasury Stock, Common 8,000
Paid-in Capital 68,000

1-Dec-12 Retained Earnings (100,000 shares * K2.50) 250,000

Common dividend Payable 250,000

WORKINGS

W1. 20,000 shares * K12 = K240,000

W2. 100,000 shares - 20,000 shares = 80,000 shares * K1.50 = K120,000

W3. 12000 shares * K13 = K156,000

W4. 8,000 shares * K9.5 = K76,000

Q2. Danda
Annuity Factor Interest Rate
Principal Amount 4 periods at 7% Payment 7%
ZMW 25,000 3.3872 ZMW 7,381

Amortisation Table
Year Beginning Payment Interest Principal Ending
Balance Amount Expense Payment Balance
1 ZMW 25,000 ZMW 7,381 ZMW 1,750 ZMW 5,631 ZMW 19,369
2 ZMW 19,369 ZMW 7,381 ZMW 1,356 ZMW 6,025 ZMW 13,344
3 ZMW 13,344 ZMW 7,381 ZMW 934 ZMW 6,447 ZMW 6,898
4 ZMW 6,898 ZMW 7,381 ZMW 483 ZMW 6,898 ZMW 0