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Solution 6.7
           In the books of Bali Limited (the lessee):
           Dr                                                          Royalty payable account                                                       Cr
               Date         Details            TZS        Date           Details       TZS

            31  Dec.                                 31  Dec.
              st
                                                       st
          FOR ONLINE READING ONLY
                2020   Nala Limited         2,250,000    2020        Manufacturing   2,250,000
                2021   Nala Limited         2,550,000    2021        Manufacturing   2,550,000
                2022   Nala Limited         2,775,000    2022        Manufacturing   2,775,000
                2023   Nala Limited         2,100,000    2023        Manufacturing   2,100,000
                2024   Nala Limited         3,000,000    2024        Manufacturing   3,000,000
 LANGUAGE EDITING

           Dr                                                       Nala Ltd. account                                         Cr
            Date              Details          TZS Date           Details                 TZS
            31  Dec. 2020     Bank         2,250,000 31  Dec. 2020  Royalty payable  2,250,000
                                                      st
              st
            31  Dec. 2021     Bank         2,550,000 31  Dec. 2021  Royalty payable  2,550,000
              st
                                                      st
            31  Dec. 2022     Bank         2,775,000 31  Dec. 2022  Royalty payable  2,775,000
              st
                                                      st
            31  Dec. 2023     Bank         2,100,000 31  Dec. 2023  Royalty payable  2,100,000
              st
                                                      st
            31  Dec. 2024 LANGUAGE EDITING                                           3,000,000
                              Bank
                                           3,000,000 31  Dec. 2024
                                                                  Royalty payable
                                                      st
              st
             Example 6.8
             Geita Soil Ltd. leased a quarry to Vijana Miners Ltd. to extract stones under the
             following terms:
             (a)  A royalty rent of TZS 200 per cubic meter extracted was payable;
             (b)  Vijana Miners Ltd. had the right to recoup short workings within the first four
                  years of the lease agreement; and
             (c)  A minimum rent of TZS 1,500,000 per annum was payable.

            Years                 2019       2020      2021      2022      2023      2024
            Output (cubic meter   6,250      6,875     7,200     8,500     10,250    11,000
            of stone)

            Required: Prepare ledger accounts in the books of Vijana Miners Ltd.
















            Student’s Book Form Five
                                                   177




                                                                                            23/06/2024   17:35
     ACCOUNTANCY_DUMMY_23 JUNE.indd   177                                                   23/06/2024   17:35
     ACCOUNTANCY_DUMMY_23 JUNE.indd   177
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