GAG Ltd has nominated and agreed with you to prepare relevant reports using the data below. Shs. (000) Fleet of delivery vehicles, after deducting depreciation 90,000 Furniture and fittings, after deducting depreciation 60,000 Trade receivables 80,000 Bank deposit 150,000 Creditors 30,000 Ordinary Share Capital 210,000 10% Debentures 100,000 Bank Loans 40,000 On 1 October 2021 management of the company issued additional 30,000 ordinary shares of Shs. 3.000; and 50.000 13% Debenture of Shs. 1,000 each and received all the cash duly banked. The manager of GAG Ltd has a personal business named "Gag Ent." where he is Cavendish University Uganda - Examination December 2021 Page 2 of 3 w suspecting that the in-charge officer is stealing her money and provides you with the data below: Balances Brought Forward (Shs. '000') Motor Vehicles 100,000 Cash Balance Furniture and fittings, 120,000 Capital Trade receivables 40,000 Additional Capital Bank Balance 60,000 Prepaid Insurance Inventory at Close 5,000 Umeme Bills Due Creditors 80.000 Unpaid Salaries Motor Vehicles 190.000 Outstanding Rent Bank Loans 140,000 Machinery Transactions during the year (Shs. 000) Sales 670.000 Discount Received Purchases 340.000 Discount Allowed Transport on Purchases 4,000 Repairs General Office Expenses 5.000 Insurance Costs Payment – Trade Payables 120.000 Auditing Receipts - Trade Receivables 180.000 Interest on Loan 100,000 ? 160,000 50,000 30,000 30,000 20,000 250,000 15,000 20,000 2.000 18,000 25,000 19,000 I (5marks) (6 marks) Required a) Explain reasons why partnership business Revaluation Accounts. b) Discuss the principles of internal control related to cash receipts. c) Prepare a statement of: (i) Affairs at start for the manager's personal business, (ii) Profit or loss for the year ended 30 November 2021. d) Analyse benefits and limitations of equity and debt capital to GAG Ltd. Total Marks 25 (2 marks) (8 marks) (4 Marks)

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