The following balances were extracted from the books of Tall Ltd. as at 31 December 2002.
N$ N$
Authorised & Issued Ordinary Share Capital 250,000
7.5% Preference Shares of N$1 each fully paid 100,000
Purchases and Sales 380,000 900,000
Trade Debtors and creditors 65,000 46,000
Premises at cost 220,000
Accumulated Depreciation on Premises 62,000
Motor Vehicles at cost 60,000
Accumulated Depreciation on Motor Vehicles 30,000
Fixtures & Fittings at cost 35,000
Accumulated Depreciation on Fixtures & Fittings 10,000
8% Loan (repayable 2009) 25,000
Trade Investments 150,000
Bank 6,500
Provision for Doubtful Debts at 1.1.02 3,400
Selling & Distribution expenses 126,500
Administrative expenses 322,500
Interest received on investment 5,000
Interest paid on loan 1,000
Stock at 1.1.02 72,000
Stock and loss balance c/fwd 1.1.02 _______ _6,500
1,438,500 1,438,500
The following items need to be taken into account:
1. Closing stock at 31.12.02 was N$85,000.
2. The directors propose that the preference share dividend
and an ordinary share dividend of 12% be provided.
3. Provision for doubtful debts at 31.12.02 is to be 6% of trade debtors.
4. Administrative expenses prepaid at 31.12.02 amounted to N$2,500.
5. Selling and distribution expenses outstanding at 31.12.02 amounted to N$3,500.
6. The half- year’s interest on the loan should be provided.
7. Provide for corporation tax for the year of N$25,000.
8. Provide for depreciation as follows:
Premises 2% Straight line
Motor Vehicles 10% reducing balance
Fixtures & Fittings 5% straight line
Required:
(a) Prepare the trading, profit and loss account for the year ended 31 December 2002