Reference no: EM132524615
Mamba Company Ltd is a retail provider with an authorised share capital of 800,000 Sh. 20 ordinary shares and 250,000 8% Sh. 20 redeemable preference shares.
The following financial information reflects the position of the company as at 31 December 2018 after preparing the trading profit and loss account.
Sh. '000'
Provision for depreciation - Fittings 1,500
Motor vehicles 3,740
Goodwill 1,200
Issued share capital: 600,000 Sh. 20 Ordinary shares 12,000
250,000 Sh. 20 Redeemable preference shares 5,000
Share premium account 400
Trade debtors and prepayments 1,708
Land and buildings at valuation (cost Sh. 4,400,000) 18,400
Capital redemption reserve fund 3,000
Fittings at cost 3,000
Motor vehicles at cost 7,940
10% Debentures 1,600
Trade creditors and accruals 960
Short term investments (Market value Sh. 860,000) 780
Stock 31 December 2018 2,960
Bank overdraft 540
Revaluation reserve 1,000
Net profit for the year 1,440
Retained profit as at 1 January 2018 4,460
General reserve 1,100
Provision for doubtful debts 48
Interim dividends paid - Ordinary 600
Preference 200
The following resolutions relating to the year ended 31 December 2018 have been passed by the board of directors of the company:
a) Transfer Sh. 500,000 to general reserves.
b) Transfer Sh. 700,000 to capital redemption reserve fund.
c) Provide for 5% final dividend and final preference dividend on shares issued and outstanding on 31 December 2018
d) Make a bonus issue of 100,000 fully paid ordinary shares from the retained profits account.
Required:
Question i. The income statement and appropriation account of Mamba Company Ltd for the year ended 31 December 2018 .
Question ii. The Statement of financial position of Mamba Company Ltd as at 31 December 2018