4.a) i) Determine the amount of capital

Here are the solutions to question 4.a):

4.a) i) Determine the amount of capital

The accounting equation states that Assets = Capital + Liabilities.
Therefore, Capital = Assets - Liabilities.

First, identify all assets:

• Buildings: 1,000,000
• Stock: 320,000
• Cash in hand: 420,000
• Debtors: 150,000
• Cash at Bank: 750,000
• Furniture: 200,000
• Motor Van: 1,500,000
• Prepaid rent: 20,000

Calculate Total Assets:

$$\text{Total Assets} = 1,000,000 + 320,000 + 420,000 + 150,000 + 750,000 + 200,000 + 1,500,000 + 20,000$$ $$\text{Total Assets} = 4,360,000$$

Next, identify all liabilities:

• Creditors: 190,000
• Loan from K.I.E: 500,000
• Bank Loan: 300,000

Calculate Total Liabilities:

$$\text{Total Liabilities} = 190,000 + 500,000 + 300,000$$ $$\text{Total Liabilities} = 990,000$$

Now, calculate Capital:

$$\text{Capital} = \text{Total Assets} - \text{Total Liabilities}$$ $$\text{Capital} = 4,360,000 - 990,000$$ $$\text{Capital} = 3,370,000$$

The amount of capital is $\boxed{3,370,000}$.

4.a) ii) Prepare a balance sheet of Juma traders as at 20th January 2010

Here is the Balance Sheet for Juma Traders as at 20th January 2010:

$$\textbf{Juma Traders} \\ \textbf{Balance Sheet as at 20th January 2010}$$ $$\begin{array}{l r} \textbf{ASSETS} & \\ \textbf{Non-Current Assets} & \\ \text{Buildings} & 1,000,000 \\ \text{Furniture} & 200,000 \\ \text{Motor Van} & 1,500,000 \\ \quad \text{Total Non-Current Assets} & \underline{2,700,000} \\ & \\ \textbf{Current Assets} & \\ \text{Stock} & 320,000 \\ \text{Debtors} & 150,000 \\ \text{Prepaid rent} & 20,000 \\ \text{Cash in hand} & 420,000 \\ \text{Cash at Bank} & 750,000 \\ \quad \text{Total Current Assets} & \underline{1,660,000} \\ & \\ \textbf{TOTAL ASSETS} & \underline{\underline{\textbf{4,360,000}}} \\ & \\ \textbf{CAPITAL AND LIABILITIES} & \\ \textbf{Capital} & \\ \text{Capital (as calculated in i))} & 3,370,000 \\ & \\ \textbf{Non-Current Liabilities} & \\ \text{Loan from K.I.E} & 500,000 \\ \text{Bank Loan} & 300,000 \\ \quad \text{Total Non-Current Liabilities} & \underline{800,000} \\ & \\ \textbf{Current Liabilities} & \\ \text{Creditors} & 190,000 \\ \quad \text{Total Current Liabilities} & \underline{190,000} \\ & \\ \textbf{TOTAL CAPITAL AND LIABILITIES} & \underline{\underline{\textbf{4,360,000}}} \\ \end{array}$$