Download QUESTION ONE Mr. Telemundo has been in business for some time

QUESTION ONE
Mr. Telemundo has been in business for some time trading in the sports materials. The list below has been taken from his books for the financial
year ended 30th September, 2014 and the details are as follows:
Fixtures and fittings
910,000
Accumulated depreciation
136,500
Discounts received
15,400
Trade receivables(debtors)
400,000
Carriage inwards
95,000
Postage and stationary
15,210
Telephone expenses
10,625
Bad debts
55,000
Return inwards
110,300
Carriage outwards
5266
Drawings
315,000
Rent and rents
88,000
Insurance
11,000
Heating and lighting
50,000
Advertising
16,000
Cash in hand
4242
Cash at bank
112,000
Inventory 1 Oct.2013
156,000
Purchases
1,200,000
Discount allowed
14,000
Allowance for doubtful debts
40,000
Return outwards
2,745
Trade payables
271,000
Capital 1 Oct.2013
1,103,179
sales
2,000,000
Additional information at 30th September, 2014
i.
Closing inventory is valued at K127, 666.
ii.
Depreciation charge for the year is 10% on the reducing balance method.
iii.
Rates prepaid are at K910.
iv.
Telephone owing is at K1000.
v.
Heating and lighting owing is at K4616.
vi.
Allowance for bad debts to be adjusted so that it is 5% of the trade receivables
Required:
By using the above details:
a)
Prepare an income statement (Trading and Profit and Account) for the company. (10Marks)
b)
Prepare a statement of financial position(balance sheet) as at 30 september.2014
(10 Marks)
QUESTION TWO
Mrs. AfriMagic, a sole trader, extracted the following Trial Balance from her account books for the year ended 31 st
March 2015
DR
CR
Purchases and Sales
224,000
419,700
Stock 1 April 2014
51,600
Capital 1 April 2014
72000
Bank overdraft
43500
cash
900
Carriage inwards
4,600
Discounts
14,400
Sales returns
8100
Purchases returns
9,300
5700
Carriage outwards
21,600
Rent and insurance
17,400
Provision for doubtful debts
6,600
Office equipment
20,000
Delivery vans
27,000
Debtors and creditors
119,100
Drawings
28,800
Bad debts written off
400
Wages and salaries
89,000
General office expenses
4,500
61,200
Provision for depreciation:
Office equipment
8,000
Delivery vans
5,400
631,400
631,400
Additional information:
i.
Stock at 31st March 2015 was valued at K42,900
ii.
Wages and salaries accrued K2, 100 and office expenses owing K200 at 31 st March 2015.
iii.
Rent prepaid 31st March 2015 was K1, 800.
iv.
Increase in the provision for doubtful debts to K8,100
v.
Provision for depreciation on the office Equipment at 20% per annum using the straight line method.
vi.
Provide for depreciation on the delivery Vans at 20% per annum using the reducing balance method.
Required:
a)
Prepare an income statement (Trading and profit and loss Account) for Mrs. AfriMagic for the year ended 31 st March, 2015.
b)
Prepare a statement of financial position (balance sheet) for Mrs. AfriMagic year as at 31 st March 2015.