QUESTION ONE

Baruch Enterprises Limited is a Book$-$seller dealing in books and stationery from various

suppliers. One of their big customers are government schools where deliveries are done by

the company. The following trial balance at $31$ May $2021$ was prepared by an inexperienced

Accounting Student on industrial attachment.

The following additional information was provided:

$($i$)$ The directors proposed to transfer K$15,000$ of the profits to the general reserve. Closing

inventory at $31$ May $2022$ was K$35,000.$

$($ii$)$ Salaries amounting to $K8,500$ were outstanding at the end of the period.

$($iii$)$ Rent was prepaid by K$3,900$ for the first three months of $2020.$

$($iv$)$ Straight line depreciation for the year is to be provided as follows:

Motor vehicles $33\frac{1}{3}\%$

Fixtures and fittings $10\%$

$($v$)$ Taxation is to be ignored.

Required:

$($a$)$ Prepare a corrected trial balance as at $31$ May, $2022$

$(8$ Marks$)$

$($b$)$ Prepare a Statement of Profit and Loss for the year ended $31$ May $2022,$ for internal

purposes.

$(16$ Marks$)$

$($c$)$ Prepare a Statement of Financial Position as at $31$ May $2022.$

$(16$ Marks$)$

$($TOTAL: $40$ MARKS$)$