QUESTION BANK FOR LIMITED LIABILITY COMPANY
Question 1
The following information is extracted from the financial statements of Krapeh Limited for the
year ended August 31, 2022.
GH¢’000
Revenue 61,970
Cost of goods sold 27,248
Gain from sale of motor vehicle 843
Administration expenses 8,774
Dividends paid on preference shares 1,100
Dividends paid on ordinary shares 3,200
Income tax expense 6,940
Gain on revaluation of property 3,845
Cash received from issue of 6 million ordinary shares 7,500
The balances in the statement of changes in equity as at September 1, 2021 are as follows:
GH¢’000
Ordinary share capital of GH¢0.50 per share 18,000
Revaluation reserves 6,894
Retained earnings 12,344
General reserves 3,142
Balance relating to non-current liabilities as at September 1, 2021:
10% cumulative preference shares of GH¢1 per share 11,000
At August 31, 2022, the management of Krapeh Limited recommended that GH¢1,149,000
should be transferred to general reserves.
Required:
a. Prepare the Statement of Profit or Loss and Other Comprehensive Income for the year
ended August 31,2022 (5½Marks)
b. Prepare the Statement of Changes in Equity for the year ended August 31, 2022(7Marks)
Question 2
The following is the trial balance extracted from the books of Alice Ventures Limited for
the year ended December 31, 2022.
DR CR
Le’000 Le’000
Property, plant & equipment cost 36,000
Inventories as at January 1, 2022 3,900
Interest Expenses 100
PPE– accumulated depreciation 1/1/22 12,500
Revenue 33,000
Purchases 16,100
Trade receivables 4,500
Cash at bank 1,600
Dividend paid 600
Retained earnings 13,850
Administrative expenses 3,500
Distribution expenses 4,450
Income tax 200
8% bank loan repayable in 2022 2,500
Ordinary share capital Le1 each 5,000
Share premium 2,500
Trade payables ______ 1,200
70,750 70,750
The following information are also provided:
(i) Closing Inventories was valued at Le4,200,000. Included in this figure are inventories that
cost Le250,000 but was sold for only Le125,000 in the new year.
(ii) Interest on bank loan for the past 6 months has not been paid as at December 31, 2022. This
was not included in the trial balance.
(iii) Included in the revenue figure is a sale made on credit to a customer on November 30, 2022
amounting to Le1,550,000.
(iv) Depreciation of property, plant and equipment for the year was charged at 10% per annum
using straight line method.
(v) Accrued Distribution expenses amounted to Le75,000 at December 31, 2022
(vi) Income tax represents over estimate in respect of current tax in the previous year. Income tax
estimate for the current year is Le900,000.
You are required to prepare:
a. Statement of profit or loss and other comprehensive income for the year December 31, 2022.
(6 Marks)
b. Statement of changes in equity for the year ended December 31, 2022. (2½ Marks)
c. Statement of financial position as at 31 December, 2022. Show all necessary notes to the
accounts (4 Marks)
Question 3
The trial balance extracted from the books of Tailor Times Ltd at 31 December 20X3 was as
follows:
£ £
Share capital 200,000
Profit and loss account 31 December 20X2 27,500
Freehold premises at cost 271,000
Provision for depreciation on freehold premises
at 31 December 20X2 54,000
Machinery at cost 84,000
Provision for depreciation on machinery account as
at 31 December 20X2 21,000
Purchases 563,700
Sales 925,300
General expenses 14,600
Wages and salaries 179,400
Business rates 6,100
Electricity 4,800
Bad debts 1,400
Provision for doubtful debts at 31 December 20X2 1,200
Debtors 74,200
Creditors 68,300
Stock in trade 31 December 20X2 81,900
Bank balance 16,200
1,297,300 1,297,300
You are given the following additional information:
(i) The authorised and issued share capital is divided into 400,000 ordinary shares of 50p each.
(ii) Stock in trade at 31 December 20X3, £94,300.
(iii) Wages and salaries due at 31 December 20X3 amounted to £1,800.
(iv) Business rates paid in advance at 31 December 20X3 amounted to £700.
(v) A dividend of £20,000 is proposed for 20X3.
(vi) The provision for doubtful debts is to be increased to £1,500.
(vii) A depreciation charge is to be made on freehold premises of £25,000 and machinery at the
rate of 20 per cent per annum on cost.
Required:
Statement of Profit or loss and other comprehensive income for the year ended 20X3 and a
Statement of Financial Position as at 31 December 20X3.
Question 4
Here is the trial balance of Falta Ltd as at 30 April 20X5:
Dr Cr
£ £
Share capital: authorised and issued 200,000
Stock as at 30 April 20X4 102,994
Debtors 227,219
Creditors 54,818
8% debentures 40,000
Fixed assets replacement reserve 30,000
General reserve 15,000
Profit and loss account as at 30 April 20X4 12,411
Debenture interest 1,600
Equipment at cost 225,000
Motor vehicles at cost 57,200
Bank 4,973
Cash 62
Sales 880,426
Purchases 419,211
Returns inwards 18,400
Carriage inwards 1,452
Wages and salaries 123,289
Rent, business rates and insurance 16,240
Discounts allowed 3,415
Directors’ remuneration 82,400
Provision for depreciation at 30 April 20X4:
Equipment 32,600
Motor vehicles 18,200
1,283,455 1,283,455
Given the following information as at 30 April 20X5, Statement of Profit or loss and other
comprehensive income and a Statement of Financial Position as at that date
(i) Stock £111,317.
(ii) The share capital consisted of 300,000 ordinary shares of 50p each and 50,000 12 per cent
preference shares of £1 each. The dividend on the preference shares was proposed to be paid as
well as a dividend of 18 per cent on the ordinary shares.
(iii) Accrued: rent £802; Directors’ remuneration £6,000.
(iv) Debenture interest 1/2 year’s interest owing.
(v) Depreciation on cost: Equipment 20 per cent; Motor vehicles 25 per cent.
(vi) Transfers to reserves: General reserve £5,000; Fixed assets replacement reserve £10,000
Question 5
You have been asked to prepare the financial statements of Brima Limited for the year ended 31
December 2021. The trial balance as at that date is shown below.
DR CR
Le 000 Le’000
Revenue 66,000
Purchases 32,200
Property, plant and equipment (PPE) - cost 72,000
PPE-accumulated depreciation, 1 January 2021 25,000
Inventories as at 1 January 2021 7,800
Interest expense 200
Income tax 400
Distribution expenses 8,900
Administrative expenses 7,000
Retained earnings 27,700
Dividend paid 1,200
Trade receivables 9,000
Cash at bank 3,200
8% bank loan repayable in 2021 5,000
10 million ordinary share capital at N1 each 10,000
Share premium 5,000
Trade payables 2,400
141,500 141,500
The following information is also available:
i. The revenue figure in the trial balance includes sales made on credit to Mr. Alusine amounting
to Le3,100,000 on 30 October 2020.
ii. Closing inventory value was Le8,400,000. Included in this figure are inventories that cost
Le500,000 but which can be sold for only Le250,000.
iii. Interest on bank loan for the past six months remained unpaid as at 31 December 2018. This
was not included in the trial balance.
iv. Depreciation of property, plant and equipment, for the year was charged at 10% using straight
line method.
v. Accrued distribution expenses amounted to Le 150,000 at 31 December 2021.
vi. Included in the ordinary share capital is additional 1 million shares of Le1 that were issue for
Le2,500,000.
vii. Income tax represents overestimate in respect of current tax in the previous year. Income tax
estimate for the current year is Le1800,000.
You are required to prepare:
a) Statement of profit or loss and other comprehensive income for the year ended 31 December
2021.
b) Statement of changes in equity for the year ended 31 December 2021.
c) Statement of financial position as at 31 December 2021
Question 6
The following balances remained in the ledger of OK Ltd after preparation of the Statement of
profit and loss account for the year ended 31 March 20X6
£000s
Stock 52
Debtors 24
Ordinary share capital 100
8% preference share capital 50
Creditors 37
Balance at bank 14
General reserve 30
Profit and loss account balance 20X5 11
Net profit for the year to 31 March 20X6 29
Fixed assets at cost, less depreciation 167
600
The directors propose:
(i) a transfer to general reserve of £10,000;
(ii) payment of the preference dividend and a 12% dividend on the ordinary shares.
Required:
(a) Prepare Statement of changes in Equity account for the year ended 31 March 20X6.
(b) Prepare a Statement of Financial Position as at 31 March 20X6.
