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Dr The following trial balance was extracted from the books of Alpha Ltd as at 31 October 2021. QUESTION FOUR (20 marks) Ksh. '000' Cr
Dr The following trial balance was extracted from the books of Alpha Ltd as at 31 October 2021. QUESTION FOUR (20 marks) Ksh. '000' Cr Ksh. '000' 16,000 8% preference shares 10% debenture Revenue reserve (1 November 2020) Ordinary share capital(Sh. 10 each par value) Share premium 900 1,200 2,820 9,000 2,700 2,890 Goodwill Purchases and sales Inventory (1 November 2020) 32,180 Discount allowed and discount received 50,970 520 490 2,850 Salaries 1,902 Rates and insurance 1,572 Office expenses Director's remunerations 600 Interim dividends paid: Preference 360 Ordinary 1,500 Financial assets(at fair value) 8,300 Allowance for doubtful debts Trade receivables and trade payables 2,600 1,850 310 700 Audit fee Bank balance 1,778 Building 19,400. Furniture and fittings 1,700 Motor vehicles 3,200 Provision for depreciation: furniture and fittings 320 Motor vehicles Investment income 400 Debenture interest 552 60 84,812 84,812 Additional information: i.The cast and net realizable value of the inventory as at 31 October 2021 was Sh. 3,650,000 and Sh. 3,460,000 respectively. ii.Depreciation is to be provided as follows: Asset Furniture and fittings Motor vehicles Ignore depreciation on building Rate per annum 10% on reducing balance. 12% on cost iii.Allowance for doubtful debts is to be adjusted to Sh. 270,000. iv. Bad debts amounting to Sh. 50,000 are to be written off. January 2021. v. Insurance amounting to Sh 300,000 had been paid to cater for a period of six months up to 31 vi.A provision for accrued debenture interest of Sh. 60,000 and preference dividend of Sh 360,000 are to be made. viii. The directors have proposed to pay a final dividend of 10% of ordinary share capital and te vii. Corporation tax for the year is estimated to be Sh. 1,504,000. transfer Sh. 400,000 to the revenue reserve. Required to prepare: a) Income statement for the year ended 31 October 2021 b) Statement of financial position as at 31 October 2021 (10 marks) (10 marks) (Total; 20
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