Murungi Co. Ltd. Extracted the following trial balance as on 31st December, 2004.
Dr Cr
Shs. Shs.
Share Capitalrrtt
250,000 ordinary shares of Shs.100 each 25,000,000
125,000 10% preference shares of Shs. 100 each 12,500,000
10% debentures 10,000,000
Freehold premises at cost 25,000,000
Motor vehicles at cost 7,500,000
Fixtures and fittings 1,300,000
Plant and machinery at cost 2,500,000
Profit and loss A/C, 1 Jan 2004 2,685,000
Sales 59,475,000
Stock at 1 Jan 2004 10,775,000
Bad debts written off 125,000
Purchases 16,900,000
Dividends paid at 30 June 2004
Preference dividend 625,000
Ordinary dividend 1,250,000
Debenture interest paid at 30 June 2004 500,000
Trade Debtors/Creditors 2,700,000 1,500,000
Accumulated depreciation at 1 Jan 2004
Plant and machinery 1,025,000
Motor vehicles 2,250,000
Fixture and fittings 800,000
Salaries and wages 4,100,000
Cash and bank balances 4,775,000
Investments 22,500,000
Office expenses 2,300,000
General reserve 1,000,000
Selling and distribution expenses 13,750,000
Directors’ emoluments 3,700,000
Auditors’ remuneration 800,000
Preliminary expenses 1,200,000
Sundry income 1,625,000
Bank charges 60,000
Income from investments 4,500,000
122,360,000 122,360,000
Additional information available at 31 December 2004
- Stock Shs. 3,750,000
- Depreciate fixed assets as follows:
- Motor vehicle at 20% on cost
- Fixtures and fittings at 12.5% on book value
There were no disposals and acquisition of non-current assets during the year.
- Expenses due but unpaid include salaries and wages Shs. 62,500 and office expenses paid in advance amount to Shs. 120,000
- Provision for bad debts is to be set up at 2.5% of sundry debtors
- Debenture interest is payable half yearly, the half year to 31 December 2004 being due on that date
- Corporation tax is chargeable at 30% on the current year’s profits .
- The directors of Murungi Co Ltd recommend appropriation as follows:
- The preliminary expenses to be written off in full
- Transfer to be made from the Profit and Loss Accounts as follows:
- General reserve Shs. 1,500,000
- Payment of final dividend of 12.5% on the ordinary share s
Required:
- Trading, Profit and Loss Accounts for the year ended 31 December 2004
- Profit and Loss Appropriation Account
- Balance sheet as at 31 December 2004
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