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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
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