Murungi Company limited extracted the following trial balance as at 31 Dec 2009.
|
DR
|
CR
|
|
|
Shs
|
Shs
|
|
Share Capital
|
|
|
|
250,000 Ordinary shares of Shs 100 each
|
|
25,000,000
|
|
125,000 10% Preference Shares of Shs. 100
|
|
12,500,000
|
|
10% debentures
|
|
10,000,000
|
|
Freehold premises at cost
|
25,000,000
|
|
|
Motor vehicles
|
7,500,000
|
|
|
Fixture and fittings
|
1,300,000
|
|
|
Plant and Machinery at cost
|
2,500,000
|
|
|
Profit and Loss account, 1 Jan 2009
|
|
2,685,000
|
|
Sales
|
|
59,475,000
|
|
Stock at 1 Jan 2009
|
10,775,000
|
|
|
Bad debts written off
|
125,000
|
|
|
Purchases
|
16,900,000
|
|
|
Dividends Paid at 30 Jun 2009
|
|
|
|
Preference dividend
|
625,000
|
|
|
Ordinary dividend
|
1,250,000
|
|
|
Debenture Interest paid at 30 Jun 2009
|
500,000
|
|
|
Trade Debtors/Creditors
|
2,700,000
|
1,500,000
|
|
Accumulated Depreciation as at 1 Jan 2004
|
|
|
|
Plant & 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 Reserves
|
|
1,000,000
|
|
Selling and distribution Expenses
|
13,750,000
|
|
|
Directors Emoluments
Auditors Remuneration
Preliminay expense
Sundry Income
Bank Charges
Income from Investments
|
3,700,000
800,000
1,200,000
60,000
122,360,000
|
1,625,000
4,500,000
122,360,000
|
|
|
|
Additional information available at 31 December 2009
1) Stock Shs. 3,750,000
2) Depreciate fixed Assets as follows;
Motor vehicles at 20% on cost
Fixtures and Fittings at 12 ½% on Book value.
There were no disposals and acquisition of current assets during the year.
3) Expense due but unpaid include salaries and wages shs. 62,500 and office expenses paid in advance amount to shs. 120,000
4) Provision for Bad debts is to be Set at 2 ½ % of Sundry Debtors
5) Debenture interest is payable half yearly, the half year to 31 December 2009 being due on that date.
6) Corporation tax is chargeable at 30 % on the current profits for the year of taxation liabilities
7) The directors of Murungi Co. Ltd. Recommend appropriation as follows;
i) The preminary expense to be witten off ii) Transfer to General reserves shs 1,500,000 be made from Profit and loss account iii) Payment of final dividend of 12 ½% on the ordinary Share Capital
Required;
Trading, Profit and loss Account for the year ended 31 December 2009 (10 marks )
Profit and loss Appropriation account (4 Marks)
Balance sheet as at 31 December 2009 (6 Marks)