framework [23 marks] Question Two Tamutamu Ltd is a new business that started on January 1, 2012. The following is a summary of transactions that occurred in the first year of trading. 1. The owner introduced Shs.5 million which was paid into the bank account opened in the name of the business. 2. Premises were rented from January 1, 2012 at an annual rent of Sh.21 million. During the year rent of Shs.2.5 million was paid to the owner of the premises. Rates (tax on business premises) were paid during the year as follows: For the period 1 January 2012 to 31 March 2012 For the period 1 April 2012 to 31 March 2012 Shs.50,000 Shs.120,000 A delivery van was bought on January 1, 2012 for shs.1,200,000. This is expected to be used in the business for four years and then sold for Sh.200,000. Wages totaling Sh.3,350,000 were paid during the year. At the end of the year the business owned Shs.63,000 for wages of the last week of the year. Electricity bills for the first three quarters of the year were paid totaling Shs.165,000. After December 31, 2012 but before the financial statements had been finalized for the year the bill for the last quarter arrived showing a change of Shs.62,000. 7. Inventories totaling shs. 14,300,000 were bought on credit. 8. Inventories totaling Shs. 120,000,000 were bought for cash. 9. Sales Revenue on credit totaled 15,200,000 (cost of sales Shs.7,400,000). 10. Cash sales revenue totaled Shs.3,500,000 (cost of sales Sh.1,600,000). 11. Receipts from trade receivables totaled Shs.13,200,000. 12. Payments to trade payables totaled Sh.12,100,000 13: Motor vehicle running expenses totaled Shs.940,000. At the end of the year, it was clear a trade debtor who owed Sh.40,000 would not be able to pay any part of the debt. The business uses straight the method of depreciating non- current assets. Required: Prepare a statement of income for the period ended 31 December 2012 and a statement of financial position as at that date. [25 marks] Question Three: (a) Mavuno Ltd's statement of comprehensive income for the year ended 31 December 2011 and statement of financial position on 31" December 2012 and 31" December 2011 are as follows