Jenga Mali, a proprietor of a grocery and general store has not previously engaged an accountant. He informs you that this year his bankers have insisted on a proper set of accounts. Jenga Mali supplies you with his trading results for the year ended 30 June 2019 which are as follows: Payment for goods 4,747 500 Takings 5.465 000 Payment For expenses $63,000 Profits 132 500 3.465.000 5,465.000 Jenga Mali instructs you to examine his records and prepare accounts. From your examination of the records and interview with your client, you ascertain the following information: The takings are kept in a drawer under the counter, at the end of each day the cash is counted and recorded on a scrap of paper; at irregular intervals Mrs. Jenga Mali transcribes the figures into a notebook; a batch of slips of paper was inadvertently destroyed before the figures had been written into the notebook, but Mr. And Mrs. Jenga Mali carefully estimated their takings for that period, and the estimated figure is included in the total of Sh. 5,465,000.2. Mr. Jenga Mali involved himself in betting for 30 weeks of the year, spending Sh. 500 per week with cash taken from the drawer His winnings totaled Sh. 29,500. 2. The following balances are ascertained as correct; 30 June 2019 2018 Sh 1000' Sh 090 Cash in hand 43.500 Balance at bank 109.500 78. Sales debtors 245,500 229 Creditors for purchases of stock 121,500 Stock at cost 950,000 975,000 Debts totaling Sh. 178,000 were abandoned during the year as bad; the takings included Sh 12,500 recovered in respect of an old debt abandoned in the previous year. 4 Mr. Jenga Mali rents the shop for living accommodation at Sh. 1,500 per week for $2 weeks in a year, the rent is included in expenses of Sh 565,000. The living accommodation comprises one-third of the building s. The total expenses also include: .Sh. 17,500 running expenses of Jenga Mali"'s private car; .Sh. 30,000 for exterior decoration of the whole premises; . Sh. 80,000 for alterations to the premises to enlarge the storage accommodation. 6. Mr. Jenga Mali takes Sh. 5,000 per week from the business for his wife's personal expenses. This excludes the amount indicated in note 8. Mr. Jenga Mali draws Sh. 750 per week for cigarettes and beer 8. During the year, Mr. Jenga Mali bought a secondhand car (not for use in the business) from a friend; the price agreed was Sh. 175,000, but as the friend owed Mr. Jenga Mali Sh. 33,500 for goods supplied from the business, the difference was settled by cheque. 9. An insurance policy for Mr. Jenga Mali"'s life matured and realized Sh, 320,500. 10 Mr. Jenga Mali cashed a cheque for Sh. 50,000 for a friend; the cheque was dishonored and the friend is repaying the Sh 50,000 by installments. He had paid Sh. 20,000 by 30 June 2019 1. Other private payments by cheque totaled Sh. 48,000 plus a further sum of Sh. 55,000 for income tax. 12. You are to provide Sh. 21,000 for accountancy fees. N.B. All receipts and payments of Mr. Jenga Mali are made through his business account. Required: (a)Mr. Jenga Mali's statement of position for the business at 30 June 2018. (4 marks) (b)Mr. Jenga Mali's profit and loss account for the year ended 30 June 2019. (12 marks) (c)Mr. Jenga Mali's statement of position for the business at 30 June 2019 (6 marks) TWO as manufactures of
