Chance u ltd is a quoted company with authorized share capital of 250,000 ordinary shares of shs,1000 each. The company prepares its accounts as on 31^st march every year. And the trial balance before adjustments extracted on 31^st march 2003 is shown below:

	Shs.000	Shs.000
Equity share capital issued and fully paid		200,000
Accumulated profits on 1st April 2012		61,000
6% Loan notes/secured		60,000
Lease hold factory(cost at the beginning of the year	200,000
Accumulated depreciation at the beginning of the year		76,000
Plant and machinery	80,000
Accumulated depreciation for plant and machinery		30,000
Addition plant and mach.	10,000
Payables accrued expenses		170,000
Inventory on 31st march 2013	160,000
Receivables	100,000
Pre-payments	80,000
Balance at bank	90,000
Profit for the year(subject to adjustments)		111,000
Sale proceeds of plant		12,000
Totals	720,000	720,000

Additional information:

1. The loan notes were repayable at par by six equal annual drawings starting on 31^st dec.2003.
2. The lease of the factory has 30 years remaining as at 31^st march 2003.
3. Annual depreciation is calculated as;

• Lease hold factory 2% on cost
• Plant and Machinery 20% reducing balance on net book value as at 31^st December 2003 plus additions less disposals in the year.

Iv Plant disposed off original cost 16, 000, 000, accumulated, accumulated depreciation shs.3.2m

V Inventory has been valued consistently at the lower of cost and net realizable value.

VI A dividend of 20% is proposed

Required: prepare financial statements.

Answer rating: 100% (QA)

ANSWER To prepare the financial statements for Chance U Ltd well start with the income statement fol... View the full answer