Murungi Company limited extracted the following trial balance as at 31 Dec 2009.
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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)
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