Direct Costs

1. a) Distinguish between direct costs and indirect costs in the

light of manufacturing accounts. (5 Marks)

b) From the information given below draw up an appropriation account

for the year ended 31^st December 2013 and partners current account

i) Net profit for the yare sh 30,350

ii) Interest to be charged on capital W. sh 2000 P sh 1,500 sh900

iii) Interest to be charged on drawing w sh 240 P sh 180 H sh 130

iv) Salaries to partners P sh 2000 H sh 3500

v) Profits are to be shared W 505 P 30% and H 20%

vi) Current accounts balance b/f W sh 1860 P sh 946 and H sh 717

vii) Capital account balances b/f w sh 40,000 P sh 30,000 H sh 18,000

viii) Drawings during the year W sh 9200 P sh 7100 and H sh 6900. (14 Marks)

c) Enumerate the need for cash flow statement. (4 Marks)

d) Identify three reasons which give rise to incomplete records(3 MK

e) Outline and explain the contests of a partnership agreements. (4 Marks)

1. From the following balance sheet prepare a cash flow statement of Abc ltd For the year ended 31.12.2012.(20 Marks)