The following balances were taken from the books of Mumias Unga Ltd for the year ended 31 December 2010 after the trading account had been prepared.
Ksh “000” Ksh. “000”
Dr Cr
Gross profit 706
Insurance 73
Wages and salaries 200
Provision for doubtful debts 8
(at 1 April 2009)
Premises (at cost) 1,120
Fixtures and fittings (at cost) 120
Provision for dep. On fixtures (as at April 2009) 40
Stock at 31 March 2010 164
Debtors 100
Creditors 66
Profit and loss account (at 1 April 2009) 32
Bank 75
10% Debentures (2020) 400
500,000 ordinary shares of ksh. 1 each 500
100,000 8% preference shares of ksh.1 each 100
1,852 1,852
Additional information:
1. Insurance includes a prepayment of 5000 for next year.
2. Wages and salaries due but unpaid amount to ksh.20,000.
3. Depreciation is to be provided on fixtures and fittings at 10% on cost.
4. The provision for doubtful debts is to be increased to ksh.10,000.
5. Corporation Tax of ksh.91,000 is to be provided on Net profit.
6. Debentures interest to be paid in full.
7. The Directors propose:
i. Preference share dividend should be paid in full.
ii. Ordinary share dividend of 12% should be paid.
Required:
i. Prepare the profit and loss and appropriation of available profits for the year ended 31 March 2010. [10 marks]
ii. The statement of financial position. [10 marks]
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