PROPOSED MARKING GUIDE Set 2

Question 1
Stock bin card preparation
Movement Warehouse on On on Final
Purc. Sale Loss Date Details Entry Exit Stock Rent Hire Cons. stock
s
Initial st. 300 100 150 400 950
700 2/03 purchase 700 - 1,000 100 150 400 1,650
5/03 return 210 - 1,210 100 150 190 1,650
6/03 hire - 180 1,030 280 150 190 1,650
100 8/03 sales - - 1,030 280 150 90 1,550
50 11/3 losses - 50 980 280 150 90 1,500
12/3 consignment - 300 680 280 150 390 1,500
600 15/3 purchases 600 - 1,280 280 150 390 2,100
16/3 return 60 - 1,340 220 150 390 2,100
40 18/3 sales - 40 1,300 220 150 390 2,060
19/3 return 90 - 1,390 220 60 390 2,060
24/3 rent - 110 1,280 330 60 390 2,060
120 26/3 sales - - 1,280 330 60 270 1,920
29/3 return 100 - 1,380 230 60 270 1,920

Question 2
week Normal hours Overtime hours
20% 30% 40% 50%
1 40 8 4 - -
2 40 - - - 1
3 40 8 8 4 -
4 40 8 1 5 6
Total 24 13 9 7

a) Determination of overtime pay

Hourly rate = 520,000/173.333
= 3,000fcfa
At 120% = 1.2 x 3,000 x 24 = 86,400
At 130% = 1.3 x 3,000 x 13 = 50,700
At 140% = 1.4 x 3,000 x 9 = 37,800
At 150% = 1.5 x 3,000 x 7 = 31,500
Total overtime pay = 206,400fcfa
b) Determination of total salary
Total salary = basic salary + overtime +allowances
= 520,000 + 206,400 + 36,000 = 762,400fcfa
Question 3
a) Determination of the original values
- Office equipment
A2 = 1,296,000
A1 = A2(1 – i)-1
I = 0.4

A1 = 1,296,000(1 – 0.4)-1

A1 = 1,296,000(0.6) -1

A1 = 2,160,000

OV = A1/i

OV = 2,160,000/0.4

OV = 5,400,000FCFA

- HINO Truck
Total cost (OV) of transport equipment = 36,250,000 fcfa
Transport equipment is made up of HINO Truck and LAND CRUISER
OV of land cruiser = 11,250,000
OV for HINO Truck = 36,250,000 – 11,250,000 = 25,000,000 fcfa
b) Rate of depreciation and the date of utilization
Rate = 100/lifespan
Lifespan = 5years
Constant rate = 100/5 = 20%
Coefficient = 2
Reducing balance rate = 20% x 2 = 40%
Date of putting to use
OV x I x m/12 = 5,000,000
25,000,000 x 0.4 x m/12 = 5,000,000
10,000,000m = 60,000,000
M= 6 months
Date of putting to use = 01/07/2014
 c) Depreciation schedule

Rate
Financial Depreciation Accumulated Net Book
Reducing
Annuities
Year Basis Constant rate Depreciations Value
balance rate

2014
25,000,000 20% 40% 5 000 000 5,000,000 20,000,000

2015
20,000,000 25% 40% 8 000 000 13,000,000 12,000,000

2016
12,000,000 33.33% 40% 4 800 000 17,800,000 7,200,000

2017
7,200,000 50% 50% 3,600,000 21,400,000 3,600,000

2018
3,600,000 100% 100% 3,600,000 25,000,000 -

d) Determination of the Original value of industrial equipment

Accumulated depreciation = 2,000,000
Lifespan = 5years
Rate of depreciation = 100/5 = 20% or 0.2
Utilization period = from 12/05/2015 to 31/12/2017 = 2years 8months = 2.667 years
Acc. Dep = OV x i x n
2,000,000 = OV x 0.2 x 2.667
2,000,000 = 0.533OV
OV = 2,000,000/0.533
OV = 3,750,000 fcfa

Question 4

Appendix - PROFIT AND LOSS ACCOUNT OF SOREPCO ENTERPRISE AS AT 31/12/2018

200X Period 200X-1

Ref. HEADINGS Note Period
NET NET
TA Sales of goods A + 21 71,880,000
RA Purchases of goods - 22 75,000,000
RB Variation of stocks of goods +/- 6(+) 35,000,000
XA GROSS PROFIT (Sum TA to RB) 31,880,000
TB Sales of manufactured products B + 21 45,000,000
TC Works, services sold C + 21
TD Accessory revenues D + 21 150,000
XB TURNOVER (A + B + C + D) 117,030,000
TE Stored Production (Or Issued) +/- 17,980,000
TF Self-Constructed Assets
TG Operating subvention 21
TH Other revenues + 21
TI Transfer of operating expenses + 12
RC Purchases of raw materials and related stores - 22 80,000,000
RD Variation of stocks of raw materials and related stores +/- 6(+) 49,088,000
RE Other purchases - 22 85,000
RF Variation of stock of other supplies +/- 6
RG Transport - 23 185,000
RH External services - 24 465,000
RI Taxes and rates - 25 200,000
RJ Other expenses - 26 71,000
XC VALUED ADDED (XB+RA+RB) + (Sum TE to RJ) 63,092,000
RK Personnel expenses - 27 600,000
XD GROSS OPERATING SURPLUS (XC+RK) 28 62,492,000
TJ Depreciations, impairments and provisions written back + 28 500,000
RL Depreciations, impairments and provision expenses - 3C& 1,075,000
28
XE OPERATING PROFIT AND LOSS (XD+TJ+RL) 61,917,000
TK Financial and related revenues + 29
RM Financial and related expenses - 29 3,222,903
RN Financial Depreciations, impairments and provisions - 3C& 940,000
expenses 28
XF FINANCIAL PROFIT AND LOSS (Sum TK to RN) -4,162,903
XG ORDINARY ACTIVITY RESULT (XE+XF) 57,754,097
TN Revenues from disposals of fixed assets + 3D 1,100,000
TO Other E.O.A Revenues + 30 2,470,000
RO Accounting values of disposals of fixed assets - 3D 2,000,000
RP Other E.O.A expenses - 30
XH EXTRAORDINARY ACTIVITY RESULT (Sum TN 1,570,000
to RP)
RQ Employees profit sharing scheme - 3D
RS Income tax - 19,576,920
XI NET INCOME (XG+XH+RQ+RS) 39,747,177
Question 5

i) Contribution of ESSOME and ESTAMA

Capital = 250,000,000 fcfa
Total contributions in kind = 175,000,000 fcfa
Contributions in cash = 250,000,00 – 175,000,000 = 75,000,000
ESSOME = 2/5 x 75,000,000 = 30,000,000 fcfa
ESTAMA = 3/5 x 75,000,000 = 45,000,000 fcfa
ii) Accounting entries

4611 175,000,000
4612 37,500,000
109 37,500,000
1011 37,500,000
1012 212,500,000
Being capital contribution
22 45,000,000
231 20,000,000
244 47,000,000
245 26,000,000
311 12,000,000
411 20,000,000
571 37,500,000
4611 175,000,000
401 5,000,000
Being contributions in kind
571 37,500,000
4612 37,500,000
Being cash contributions
646 750,000
627 550,000
521 1,300,000
Being the payment of formation exp.
1012 212,500,000
1013 212,500,000
To cancel account debited
iii) Table of appropriation of profit

Elements Amount
Profit for appropriation 27,000,000
Legal reserves (0.1x27,000,0000) 2,700,000
Statutory reserves 3,000,000
Optional reserves 4,000,000
Statutory interest (0.04 x 212,500,000) 8,500,000
 Super dividends 7,292,000
Balance brought forward 1,508,000
iv) Accounting entries for profit appropriation

131 27,000,000
1301 27,000,000
Being profits for appropriation
1301 27,000,000
111 2,700,000
112 3,000,000
1181 4,000,000
121 1,508,000
465 15,792,000
Being the distribution of profit

Question 6
a) Number of shares for the second call
Share capital = 100,000,000 fcfa
Total shares = 20,000
Shares contributed in kind = 20,000/2 = 10,000
Shares contributed in cash = 10,000
Legal minimum = ¼ x 10,000 = 2,500
Second call = 2,500
b) Value defaulted by Clarence
Number of shares defaulted = 500
Face value of a share = share capital/N0. Of shares
Face value of a share = 100,000,000/20,000 = 5,000 fcfa
Value defaulted = 500 x 5,000 = 2,500,000 fcfa
c) Auction sales
Auction price = 3,500 fcfa
Number of shares = 500
Sales value = 500 x 3,500 = 1,750,000 fcfa
d) Amount paid back to Clarence
Sales value – (interest + selling expenses)
1,750,000 – ((0.12 x 2,500,000) + 40,000 +83,000 +30,000)
1,750,000 – (300,000 + 40,000 + 83,000 + 30,000)
1,750,000 – 453,000 = 1,297,000 fcfa
e) Accounting recordings

1011 12,500,000
1012 12,500,000
Being second call

521 12,500,000
4613 10,000,000
4617 2,500,000
Being payment and defaulting shareholders