Reference no: EM133129774
Question - The book-keeper of B. Ltd. prepared the following trial balance as at 31 December 2019:
|
Sh.'000
|
Sh.'000
|
|
Ordinary shares @ 20 each
|
|
100,000
|
|
Share premium
|
|
50,000
|
|
Retained profits as at 1 January 2019
|
|
100,000
|
|
10% debentures
|
|
100,000
|
|
Stock
|
200,000
|
|
|
Motor vehicles
|
100,000
|
|
|
Provision for depreciation a- motor vehicles
|
|
60,000
|
|
Machinery
|
120,000
|
|
|
Provision for depreciation - machinery
|
|
50,000
|
|
Buildings at cost
|
230,000
|
|
|
Provision for depreciation on buildings
|
|
70,000
|
|
Sales
|
|
750,000
|
|
Purchases
|
350,000
|
|
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Discounts
|
2,000
|
|
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Returns
|
2,000
|
|
|
Carriage
|
72,000
|
|
|
Rates
|
200,000
|
|
|
Advertising
|
10,000
|
|
|
Creditors
|
|
200,000
|
|
Debtors
|
200,000
|
|
|
Provision for doubtful debts
|
|
6,000
|
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Debenture interest
|
5,000
|
|
|
Cash at bank
|
|
5,000
|
|
1,491,000
|
1,491,000
|
Additional information:
1. Rates are prepaid up to Sh.1,20,000.
2. Advertisement is accrued by sh.40, 000.
3. Write off 5% as bad debts.
4. Provision for bad debts at the rate of 2.5%
5. Directors have declared a dividend of 75 cents per share.
6. Stock as at 31 December 2019 is valued at Sh.180,000,000
7. Depreciation is at the rate of 12% on cost for motor vehicles,10% on buildings on cost and at the rate of 8% on reducing balance basis for machinery.
8. A motor vehicle whose original cost was 2800,000 was disposed on 14th June 2019 for sh.2500, 000.The accumulated depreciation on this vehicle was sh.170,000
9. On 10th October 2019 the buildings were revalued to sh.370,000,000.
10. Transfer 5% of the profits to general reserve.
11. Tax is at the rate of 30%.
Required -
(a) Prepare the Income statement for the year ended 31 December 2019.
(b) Prepare the Balance sheet as at 31 December 2019.