Masaba Company Ltd. is a retail provider with an authorised share capital of

800,000 Sh.20 ordinary shares and 250,000 8% Sh.20 redeemable preference shares.

The following financial information reflects the position of the company as at 31 December 2018 after preparing the Trading, profit and loss account:

Sh.

`000'

Provision for depreciationFittings

1,500^,

Motor vehicles

3,740

Goodwill

1,200

Issued share capital: 600,000 Sh.20 Ordinary shares

12,000

250,000 Sh.20 Redeemable preference shares

5,000

Share premium account

400

Trade debtors and prepayments

1,708

Land and buildings at valuation (Cost Sh.4, 400,000)

18,400

Capital redemption reserve fund

3,000

Fittings at cost

3,000

Motor vehicles at cost

7,940

10`% Debentures

1,600

Trade creditors and accruals

960

Short-term investments (Market value Sh.860,000)

7 8 0

Stock at 31 December 2018

2,960

Bank overdraft

540

Revaluation reserve

1,000

Net profit for the year

1,440

Retained profit at 1 January 2018

4,460

General Reserve

1,100

Provision for doubtful debts

48

Interim dividend paid - Ordinary

600

- Preference

200

The following resolutions relating to year ended 31 December 2018 have been passed by the board of directors of the company

1.Transfer Sh.500,000 to General Reserve.

2.Provide for 5% final dividend and final preference dividend on shares issued and

outstanding on 31 December 2018.

3.Make a bonus issue of 100,000 fully paid ordinary shares from the retained profits

account.

Required:

(i)The appropriations account of Masaba Company Ltd. for the year ended 31 December 2018. (4 marks)

(ii)Statement of financial position of Masaba Company Ltd. as at 31 December 2018.(8 marks)