Mr.Muhandipreparedthefollowinglistofbalancesfrom hisbooksofaccountasat31st March2018. Sh. Debitbalances: Landandbuildings(landSh.2,400,000) 10,400,000 Purchases 3,267,000 Returnsinwards 25,000 Travelingexpenses 69,000 Printingandstationery 16,000 Cashatbank 307,950 Discountsallowed 18,000 Miscellaneousexpenses 186,200 Debtors 640,000 Postage 8,000 Furniture 80,000 Cashinhand 59,000 Motorvehicles 1,600,000 Investment 120,000 Drawings 100,000 Stock1stApril2004 684,800 Interestonbankloan 30,000 Salaries(includingSh.15,000advance) 220,000 Rates 15,950 Carriageinwards 30,000 Advertisementexpenses 160,000 18,036,900 Creditbalances: Sh. Sales 5,681,000 Incomefrominvestment 9,900 12%bankloan 810,000 Capital 9,000,000 Accumulateddepreciationonbuildings 1,000,000 Accumulateddepreciationonmotorvehicles 800,000 Accumulateddepreciationonfurniture 30,000 Creditors 657,000 Returnsoutwards 37,000 Discountsreceived 12,000 18,036,900 AdditionalInformation: Stocksasat31stMarch2018werevaluedatSh.1,200,000. Provisionfordoubtfuldebtsistobemaintainedat1%ofdebtors. StockworthSh.100,000wasdestroyedbyfireon25thDecember20X7.Theinsurancecompany admittedaclaim foronlySh.75,000.Thisamounthadnotbeenreceivedfrom theinsurance companyon31stMarch2018. Themanagerisentitled to acommission of8% on thenetprofitaftercharging such commission. Threequartersoftheadvertisementexpensesaretobecarriedforward. Depreciationonfixedassetsistobechargedonthereducingbalancebasisasfollows: buildings2%perannum,furniture10%perannum andmotorvehicles20%perannum.Full depreciationisprovidedintheyearofpurchasebutnodepreciationisrecordedintheyearof disposal. Duringtheyear,Mr.MuhandihadtakenhomegoodsworthSh.40,000forpersonaluse.This hasnotbeenrecordedinthebooks. PrintingandstationeryexpensesaccruedamountedtoSh.15,000whilepostagestampsin stockamountedtoSh.1,500at31stMarch20X8 IncludedinthesalesisSh.150,000relatingtothedisposalofamotorvehicle.Thisvehiclehad beenpurchased2yearsagoatacostofSh.200,000.Nootherentryhadbeenmadeinthe booksotherthanthesalesproceedsincludedinthesales. On28thMarch2005,Mr.MuhandiintroducedSh.1,200,000intothebusinesstoincreasehis capital.Theamountwasdepositedinhisbankaccount.Thistransactionhadnotbeenrecorded attheyearend. Required a)Incomestatementfortheyearended31stMarch2018.(12Marks) b)Statementoffinancialpositionasat31stMarch2018.(10marks)

prepare a balance sheet and a p&l

The manager is entitled to a commission of 8% on the net profit after charging such commission. Three quarters of the advertisement expenses are to be carried forward. Depreciation on fixed assets is to be charged on the reducing balance basis as follows: buildings 22% per annum, furniture 10% per annum and motor vehicles 20% per annum. Full depreciation is provided in the year of purchase but no depreciation is recorded in the year of disposal. During the year, Mr. Muhandi had taken home goods worth Sh. 40,000 for personal use. This has not been recorded in the books. Printing and stationery expenses accrued amounted to Sh. 15,000 while postage stamps in stock amounted to Sh. 1,500 at 31st March 20X8. WEdit with WPS Office Included in the sales is Sh. 150,000 relating to the disposal of a motor vehicle. This vehicle had been purchased 2 years ago at a cost of Sh. 200,000. No other entry had been made in the books other than the sales proceeds included in the sales. On 28th March 2005, Mr. Muhandi introduced Sh. 1,200,000 in to the business to increase his capital. The amount was deposited in his bank account. This transaction had not been recorded at the yearend. Required a) Income statement for the year ended 31st March 2018.(12 Marks) b)Statement of financial position as at 31st March 2018.(10marks)