QUESTION ONE Panter limited is a medium-sized company engaged in the business of selling sports accessories. The business premises are rented for sh.8 million per annum. During the year ended 30 September 2021, the book keeper maintained incomplete records and some information was lost. However, the balances availed as at 30 September 2020 were as follows: sh.000 Sh.000 Authorised, issued and fully paid Motor vehicles (net book value) 12,000 Ordinary shares of sh.10 each 30,000 Fixtures and fittings (net book value 4,000 Retained profit 27,500 Inventory 20,000 Accounts payable: Trade 14,000 Accounts receivable 16,800 Other 360 Prepayments - rent 3,000 Cash at bank 15,230 Cash in hand 830 71,860 71,860 An examination of panter's books of account for the year ended 30 September 2021 revealed the following: 1 Amounts banked: Sh.'000' Loan from Len Ltd. (1 January 2021) 5,000 Sale of old stocks 12,000 Other collections 214,170 231,170 2 Payments by cheque: Sh.'000' Purchase of inventory 162,040 Wages 21,220 Rent 7,500 Motor vehicle expenses 12,140 Purchase of: Motor vehicles 15,000 Fixture and fittings 5,000 Repairs 5,220 Sundry expenses 6,130 234,250 3 Amounts paid out from the cash before bankings were made: Sh.'000' Wages 5,160 Motor vehicle expenses 830 Sundry expenses 750 6,740 4 The following closing balances were ascertained as at 30 September 2021. Sh.'000' Cash in hand 370 Inventory (Sh.4,700,000 from Kitale Sports Dealers) 19,100Accounts payable: Trade 13,410 Other 470 33,350 5 Panter Ltd. Applies a uniform gross profit margin of 40% on all sales except for goods purchased from Kitale Sports Dealers, where a 15% gross profit margin is charged. During the year ,the cost of goods purchased from Kitale Sports Dealers was sh.37 million. 6 The loan from Len carried interest at the rate of 12% per annum. Panter Limited had paid sh.400,000 from the cash in hand as part of the interest payment. 7 The sale of old stock related to goods which had been included in the opening inventory. These goods were sold at 20% below the normal selling price and all the receipts were in cash. 8 During the year, all the motor vehicles were replaced with new ones. The new motor vehicles cost sh. 29 milion and were traded in with old motor vehicle at their book values. Depreciation on motor vehicles and fixtures and fittings is to be provided on reducing balance at the rate of 20 per cent per annum. Full year's charge is to be made in the year of purchase and none in the year of disposal. 9 Panter limited owed sh.710,000 for wages and sh.1,130,000 for motor vehicle expenses. 10 Tax of Sh.10 million should be provided for. Required: (a) Income statements for the year ended 30 September 2021 (12 marks) (b) Statement of Financial Position (8 marks) (Total: 20 marks)