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8. The following balances were obtained from the books of KLM plc as at December 31, 2018: General reserves $ $ 35,000 Ordinary shares @

8. The following balances were obtained from the books of KLM plc as at December 31, 2018: General reserves $ $ 35,000 Ordinary shares @ $1 450,000 5% Preference shares @ $0.50 100,000 Premises 450,000 5% Debenture 150,000 Retained earnings 35,500 Goodwill 220,000 Debtors 72,160 Creditors 81,200 Management expenses 50,000 Motor vehicles 140,000 Provision for dep'n on vehicle 28,000 Sales 1,800,000 Cost of sales 1,050,000 Fixtures & fittings 60,000 Provision for dep'n on fix & fit 12,000 Stock at Dec 31, 2018 250,100 Insurance 15,000 Directors' fees 20,000 Debenture interest 7,000 Interim ord. shares dividends 12,000 Cash & bank 255,440 Wages & salaries 90,000 2,691,700 2,691,700 Additional information: a. Provide for depreciation as follows: fixtures and fittings 5% on cost, and motor vehicles 10% on cost. Depreciation charges should be applied equally between selling costs and administration expenses b. Wages and salaries is owing by $10,000, and insurance is owing by $5,000 C. The total preference share dividend is to be honoured d. The following expenses must be appropriated: Admin Wages & salaries Insurance 80% Selling & Dist 20% 3/4 1/4 Management fees 50% 50% Directors' fees 100% e. Goodwill impairment was estimated to be $30,000 f. Corporation tax is estimated at $25,000 g. Transfer $25,000 to general reserves Required: Prepare the following financial statements for the year: i. Statement of profit or loss ii. Statement of changes in equity iii. Statement of financial position 4

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