Profit and loss account for the year ended 31 october 2002

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Reference no: EM131800628

QUESTION ONE

(a) Briefly explain the following terms as used in the accounts of professional practitioners:

Office account

Client account

Costs charged to clients

Work-in-progress.

(b) Given below is a trial balance extracted from the books of Kamau and Nyambati, a firm of practicing advocates as at 31 October 2002:

Kamau and Nyambati Advocates


Sh.

Sh.

Capital account

Disbursements on behalf of clients

Drawings

Salaries

Rent and rates

Printing and stationery

Postage and telephone

Costs charged to clients

Work in progress on 1 November 2001

Clients: for the moneys held on their behalf

Creditors

Debtors

Sundry office expenses

Furniture, fittings and library books

Cash at bank:

     Clients' account

     Office account

12,000

60,000

72,000

60,000

35,000

18,200

36,800

78,000

8,500

45,000

24,800

  55,700

204,000

250,000

24,800

27,200

______


506,000

506,000

Additional information:

The uncompleted work on 31 October 2002 was valued at Sh.23,500.

It is estimated that debts amounting to Sh.5,500 are uncollectible and should be written off.

Depreciation should be provided at 20% per annum on the book value of the furniture, fittings and library books.

Required:

(a) Profit and loss account for the year ended 31 October 2002.

(b) Balance sheet as at 31 October 2002.

Reference no: EM131800628

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