question archive 1)Flamingo Ltd
1)Flamingo Ltd
Subject:AccountingPrice: Bought3
1)Flamingo Ltd. commenced business on 1 January 2019. The following fixed assets of the company which it acquired prior to the commencement of the business were stated at their written-down values as at 1 January 2019:
Kshs
Milling machine 2,220,000
Forklifts 1,360,000
Tractors 4,400,000
Lorries 1,700,000
Packaging machine 2,250,000
Crushing machine 2,340,000
Conveyor and sorter 3,620,000
Two pick-ups 1,400,000
One lorry 1,700,000
Saloon cars 890,000
Furniture and fittings 772,000
Land 10,500,000
The building in which the processing was to be carried was constructed in 2019 but was first used for manufacture in 2020. The building cost was kshs 7,300,000 in 2020 and the estimated value in January 2020 was kshs. 6,200,000. In 2020 the company bought the following assets:
Kshs
Toyota saloon car 1,350,000
Lorry (3.2 tonnes) 2,600,000
Tractor 1,770,000
Furniture 140,000
Land 3,120,000
Pick-up 2,000,000
Computers 25,000
Computer scanner 200,000
Printers 100,000
Milling machine 2,775,000
The following assets were disposed of in 2020:
Kshs
Forklift 240,000
Saloon car (original cost kshs. 250,000) 460,000
Printer 25,000
Land 1,120,000
Packaging machine 2,250,000
A tractor was damaged through a road accident during the year and the insurance company paid kshs 1,600,000 as compensation.
Required: Capital allowances for Flamingo Ltd for 2020
(20 mks)
