Question

Assume an employee with the following terms and conditions
Basic Pay K15, 000
Housing Allowance 20% of the basic Pay
Overtime allowance K1, 800
Transport Allowance 10% of basic pay
Required:
i. Prepare a pay slip for this employee taking into account the necessary statutory deductions. (Note: for PAYE use the 2018 rates)
ii. Show how the above will be recorded in the books of accounts for the company.
A. Write short notes on the following: (1 MARK EACH)
i. Issued Share Capital
ii. Subscribed Share capital
iii. Authorized share capital
iv. Paid up Share Capital

Before Manny went into a Sole Proprietorship, he was in Partnership with Papa who decided to venture into fish farming, the following is their Liquidation information

Cash k100, 000
Non- Cash Assts k1, 000,000
Non- Cash Assets Sales k600, 000
Liabilities k200, 000
Manny’s Capital k400, 000
Papa’s Capital k500, 000
Income and Losses are shared equally
Required: Prepare the statement of Partnership Liquidation

QUESTION TWO.
The costs incurred by Noriega Company to acquire land and construct a building were as follows:
i. Land k150,000
ii. Construction insurance k3,500
iii. Delinquent tax paid on the land k 5,000
iv. Building construction contract k 220,000
v. Architect Fees k2,000,
vi. Street and side Walk installation k4,000
vii. Excavation Costs k3,100
viii. Property Tax on land (pro to construction) k1,600
ix. Interest cost on loan to pay contract k2,600
Requirements:
a. Determine the cost of land
b. Determine the cost of the building ( 3 MARKS)
c. Assuming the residue value of the building is K60,000 and that the economic life is 10 years, compute Noriega LTD Company’s depreciation expense for Year 1, Year 2, Year 3 under the following methods
i. Straight line Method
ii. Double Declining Method
d. At the beginning of Year 4, Noriega LTD Company incurred an additional Cost of K10, 000 in order to add a new wing to the building; as a result the salvage value of the building is increased by k5, 000 and also increased the remaining life of the building by 2 years. Re- Calculate the depreciation for the next two years using the straight line method. ( 3 MARKS)
e. Show how the methods of depreciation used in C. will affect the profits
f. Write a short note on accounting for natural resources and how it differs with normal accounting for Non- Current Assets

Need answers ASAP

Answer 1

i)

Particulars	Amount
Basic Pay	15,000.00
Housing Allowance	3,000.00
Overtime Allowance	1,800.00
Transport Allowance	1,500.00
	21,300.00

Since the country is not mentioned it is difficult to mention about the statutory deductions. I regret for the inconvinience caused. In India standard deduction includes PF , ESIC, professional tax, employee welfare fund which are the main four statutory deductions. PF @12% etc.

ii) Short notes

A i) Issued Share Capital: Issued share capital refers to the amount of share capital issued to the public.

A ii)Subscribed share capital: Refers to the amount of issued capital that has beeen actually subscribed by the public.

A iii) Authorised share Capital: Refers to actual amount of share capital that a company is authorised to issue in its life time.

A iv) Paid Up Share capital: Refers to amount that has been paid up by the share subscribers for the shares subscribed by them.

Partnership
Statement of Partnership Liquidation
Particulars	Cash +	Non Cash Assets	=Liabilities	Capital
				Manny	Pappa
Balance before realisation	1,00,000.00	10,00,000.00	2,00,000.00	4,00,000.00	5,00,000.00
Sale of assets	6,00,000.00	(6,00,000.00)
Balance after Realisation	7,00,000.00	4,00,000.00	2,00,000.00	4,00,000.00	5,00,000.00
Payment of liabilities	(2,00,000.00)	-	(2,00,000.00)
Balance after payment of liabilities	5,00,000.00	4,00,000.00	-	4,00,000.00	5,00,000.00
Cash & Assets distributed to partners	(5,00,000.00)	(4,00,000.00)	-	(4,00,000.00)	(5,00,000.00)
Final Balance	-	-	-	-	-

Question 2:

Computation of Costs
Particulars	Land	Building
Cost of Land	1,50,000.00
Construction Insurance		3,500.00
Delinquent tax paid	5,000.00
Building construction contract		2,20,000.00
Architect Fees		2,000.00
Street and side Walk installation		4,000.00
Excavation Costs		3,100.00
Property tax		1,600.00
Interest cost		2,600.00
	1,55,000.00	2,41,800.00

a)Cost of Land=k155000

b)Cost of building=k241800

c)

Depreciation
Particulars	Straight Line	Double declining method
Value of Building	2,36,800.00	2,36,800.00
Less: Salvage Vlaue	60,000.00	60,000.00
Depreciable Value	1,76,800.00	1,76,800.00
Depreciation
1st Year	17,680.00	35,360.00
2nd Year	17,680.00	31,116.80
3rd Year	17,680.00	27,580.80
Total Depreciation for 3 years	5,26,640.00	5,67,657.60

d)

Depreciation
Particulars	Straight Line
Depreciable Value at the beginning of 4th year	1,06,080.00
Depreciation
4th Year	11,786.67
5th Year	11,786.67