Question
COMPANY ACCOUNTS ....................................................................................................................,, QUESTION ONE The following balances were extracted from the books of Upendo Ltd, for the year ended 31 000 Ordinary Shares 120,000
COMPANY ACCOUNTS ....................................................................................................................,, QUESTION ONE The following balances were extracted from the books of Upendo Ltd, for the year ended 31
000
Ordinary Shares 120,000 8% Preference Shares 40,000 Inventory (31 December 2013) 83,852 Trade Receivables 27,200 Bank Balance 7,796 10% Debentures 16,000 General Reserves 28,000 Gross Profit for the year 81,508 Bad Debts 340,000 Salaries and Wages 28,200 Insurance and Rates 1,410 Telephone Expenses 620 Electricity Expenses 1,216 Debenture Interests 800 Directors Fees 2,500 General Expenses 3,108 Motor vehicles at cost 29,100 Accumulated depreciation on motor vehicles 22,300 Office Equipment at cost 44,640 Accumulated Depreciation on Office Equipment 17,200 Land 100,000 Buildings at cost 32,200 Trade Payables 13,722 Revenue Reserves (1st January 2013) 24,252
Additional information 1. Accrued electricity expenses as at 31 December 2013 amounted to Sh. 548,000
2. The amount of insurance includes a premium of Sh. 300,000 paid in September 2013 to cover
the company for six months from 1 October 2013 to 31 March 2014.
3. Depreciation is provided for as follows: Office equipment - 15 % per annum on cost Motor vehicles - 20% per annum on cost
4. Provisions are to be made for: Directors fees - Sh. 5,000,000 Audit fees- Sh. 1, 200,000 Outstanding debenture interest
5. The directors have recommended the following: Sh. 12,000,000 be transferred to general reserves Dividends on preference shares be paid
Payment of 10% dividend on ordinary shares Note: Ignore depreciation on buildings
Required: a) Income statement for the year ended 31 December 2013. (12 Marks) b) Statement of financial position as at 31 December 2013 (8 Marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started