The following balances were extracted from the books of account of K. Mumba, a retail trader dealing in a variety of consumer goods as at 31^st March 2018

	K'000
Capital -1/04/2017	107200
Purchases	250000
Inventory 1/04/2017	55000
Returns inwards	1800
Returns outwards	10000
Sales Revenue	400950
Discounts allowed	18000
Discounts received	4800
Wages and salaries	58800
Carriage outwards	2000
Carriage inwards	1500
Heating and Lighting	3000
Advertising	5000
Sundry expenses	3000
Building at cost	120000
Motor vehicles at cost	80000
Accumulated depreciation -1/04/2017:
Buildings	15000
Motor vehicles	43000
Allowance for irrecoverable debts	700
Trade Receivables	36000
Trade Payables	38000
Bank (b/forward balance )	1500
Cash in hand	450
Drawings	24000
10% Long -term loan ( 5 years)	45000

ADDITIONAL INFORMATION

1. Inventory at 31 March, 2018 was valued at K41 000 000.
2. K800000 was owing for Wages and Salaries as at 31March 2018
3. K300000 had been prepaid for Advertising as at 31March 2018
4. Interest on 10% Long -term loan was outstanding
5. Allowance for irrecoverable debts is to be adjusted to 2% of the Trade Receivables.
6. Depreciation is to be provided for as follows:

Buildings - 4% per annum on straight basis

Motor vehicles - 15% per annum on reducing balance basis.

REQUIRED

Prepare, K. Mumba's

(a) Income Statement or Statement of Profit / Loss for the year ended 31 March 2018 (12 marks)

(b) Statement of Financial Position (Balance Sheet) as at 31 March 2018

Answer rating: 100% (QA)

K Mumba Income Statement for the year ended 31st March 2018 K000 Sales Revenue 400950 Less Returns o... View the full answer