Reference no: EM132101537

Question - The following information relates to Heinemann and sons limited as at 31st Dec 2005.

'Shs'

Stock January	60,000
Freehold premises	250,000
Bills receivable	40,000
Purchases	290,000
Salaries and wages	45,000
Sales	530,000
Fixtures and fittings	35,000
Discount allowed	17,500
Discount received	14,500
Plant and machinery	150,000
Rates	15,600
Advertising	20,400
Insurance	13,800
General expenses	17,200
Provision for bad debts	11,800
Debtors	70,000
Bills payable	25,000
Creditors	53,000
Cash in hand	12,400
Bank overdraft	28,600
Drawings	16,000

The following additional information is also provided:

• Provide for depreciation of plant and machinery at 10% and fixtures and fittings at 15% p.a.
• Increase the provision for bad debts to an amount equal to 4% of debtors.
• Prepaid insurance amounts to 10,500
• Rates accrued Sh.10,400
• Stock 31st Dec 70,000
• During the year Heineman & Son Ltd took goods worth Sh.12,000 for personal use.

Required:

Arrange balances in a trial balance

Prepare an income statement and statement of financial position.

NB: show all your workings.