Mr.Muhandipreparedthefollowinglistofbalancesfrom hisbooksofaccountasat31st March2018. Sh. Debitbalances: Landandbuildings(landSh.2,400,000) 10,400,000 Purchases 3,267,000 Returnsinwards 25,000 Travelingexpenses 69,000 Printingandstationery 16,000 Cashatbank 307,950
Question:
Mr.Muhandipreparedthefollowinglistofbalancesfrom hisbooksofaccountasat31st March2018. Sh. Debitbalances: Landandbuildings(landSh.2,400,000) 10,400,000 Purchases 3,267,000 Returnsinwards 25,000 Travelingexpenses 69,000 Printingandstationery 16,000 Cashatbank 307,950 Discountsallowed 18,000 Miscellaneousexpenses 186,200 Debtors 640,000 Postage 8,000 Furniture 80,000 Cashinhand 59,000 Motorvehicles 1,600,000 Investment 120,000 Drawings 100,000 Stock1stApril2004 684,800 Interestonbankloan 30,000 Salaries(includingSh.15,000advance) 220,000 Rates 15,950 Carriageinwards 30,000 Advertisementexpenses 160,000 18,036,900 Creditbalances: Sh. Sales 5,681,000 Incomefrominvestment 9,900 12%bankloan 810,000 Capital 9,000,000 Accumulateddepreciationonbuildings 1,000,000 Accumulateddepreciationonmotorvehicles 800,000 Accumulateddepreciationonfurniture 30,000 Creditors 657,000 Returnsoutwards 37,000 Discountsreceived 12,000 18,036,900 AdditionalInformation: Stocksasat31stMarch2018werevaluedatSh.1,200,000. Provisionfordoubtfuldebtsistobemaintainedat1%ofdebtors. StockworthSh.100,000wasdestroyedbyfireon25thDecember20X7.Theinsurancecompany admittedaclaim foronlySh.75,000.Thisamounthadnotbeenreceivedfrom theinsurance companyon31stMarch2018. Themanagerisentitled to acommission of8% on thenetprofitaftercharging such commission. Threequartersoftheadvertisementexpensesaretobecarriedforward. Depreciationonfixedassetsistobechargedonthereducingbalancebasisasfollows: buildings2%perannum,furniture10%perannum andmotorvehicles20%perannum.Full depreciationisprovidedintheyearofpurchasebutnodepreciationisrecordedintheyearof disposal. Duringtheyear,Mr.MuhandihadtakenhomegoodsworthSh.40,000forpersonaluse.This hasnotbeenrecordedinthebooks. PrintingandstationeryexpensesaccruedamountedtoSh.15,000whilepostagestampsin stockamountedtoSh.1,500at31stMarch20X8 IncludedinthesalesisSh.150,000relatingtothedisposalofamotorvehicle.Thisvehiclehad beenpurchased2yearsagoatacostofSh.200,000.Nootherentryhadbeenmadeinthe booksotherthanthesalesproceedsincludedinthesales. On28thMarch2005,Mr.MuhandiintroducedSh.1,200,000intothebusinesstoincreasehis capital.Theamountwasdepositedinhisbankaccount.Thistransactionhadnotbeenrecorded attheyearend. Required a)Incomestatementfortheyearended31stMarch2018.(12Marks) b)Statementoffinancialpositionasat31stMarch2018.(10marks)
prepare a balance sheet and a p&l