Banta Ltd is reviewing the financial statements of two companies Zenta Ltd and Fanta Ltd. The companies trade as wholesalers of fast moving consumer goods in Nairobi CBD. The following are the financial statements. Statement of profit or loss for the year ended 31st October 2020

Zenta Ltd Fanta Ltd

Sh 000 Sh 000 Sh 000 Sh 000

Sales

4000

6000

Cost of sales

Opening stock

Purchases 200

8000

3200

4,800

Less: Closing sock 3400

5600

400

800

3000

4800

Gross profit

Expenses

1000

1200

Distribution cost

Administrative cost 200

150

Interest paid 290

250

10

400

Profit before tax

500

800

Taxation

500

400

Net profit for the period

120

90

380

310

Statement of financial position as at 31st October 2020

Zenta Ltd Fanta

Sh 000 Sh 000 Sh 000 Sh 000

Non-Current Assets

Warehouse and office buildings 1,200

5000

Equipment and vehicles 600 1000

1,800

6000

Current Assets

Stock 400

800

Trade Debtor 800

900

Sundry debtors 150

80

Cash at bank -

100

1,350

1180

Current Liabilities

Trade creditors (800)

(800)

Sundry creditors (80)

(100)

Bank overdraft (200)

-

Taxation (120)

(90)

150

890

1,950

6890

10% Long term loan

-

(4000)

1,950

2890

Share capital

1,000

1600

Revaluation Reserve

-

500

Retained profit

950

790

1,950

2890

Required: