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During the year ended 31 December 2021, 400 television sets were sold on the hire
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purchases terms. A dividend of 10% was proposed by the director.

Required: Prepare the hire purchase income statement for the year ended 31 December
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2021, and the statement of financial position as at 31 December 2021.
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FOR ONLINE READING ONLY
Solution 8.11
In the books of Juakali Plc.

Statement of profit or loss for the year ended 31 December, 2021
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Details TZS TZS
Sales 360,000,000
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Less: Cost of sales
Opening inventory -
Add: Purchases 300,000,000

Less: Closing inventory (60,000,000) 240,000,000
120,000,000

Less: Provision for unrealised profit 60,000,000
Gross profit 60,000,000
Less: Expenses:

Wages and salaries 9,000,000
General expenses 1,125,000

Bank charges 375,000 (10,500,000)
49,500,000

Dividends proposed 7,500,000
Profit retained 42,000,000
Statement of financial position as at 31 December, 2021
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Details TZS TZS
Assets

Non-current assets 7,500,000
Current assets

Inventory 60,000,000
Hire purchase debtors 180,000,000
Less: Provision for unrealised profit 60,000,000 120,000,000

Student’s Book Form Five
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