Question two

The book$-$keeper of B$.$ Ltd$.$ prepared the following trial balance as at $31$ December

$2023$:

Additional information:

Rates are prepaid up to Sh$.1,20,000.$

Advertisement is accrued by sh$.40,000.$

Write off $5\%$ as bad debts.

Create a general provision for bad debts at the rate of $2\mathrm{.}5\%$

Directors have declared a dividend of $75$ cents per share.

Stock as at $31$ December $2023$ is valued at Sh$.180,000,000$

Depreciation is at the rate of $12\%$ on cost for motor vehicles, $10\%$ on buildings

on cost and at the rate of $8\%$ on reducing balance basis for machinery.

A motor vehicle whose original cost was $2800,000$ was disposed on ${14}^{th}$ June

$2023$ for sh$.2500,000.$ The accumulated depreciation on this vehicle was

sh$.170,000$

On ${10}^{th}$ October $2023$ the buildings were revalued to sh$.370,000,000.$

Transfer $5\%$ of the profits to general reserve.

Tax is at the rate of $30\%.$

Required:

$($a$)$ Income statement for the year ended $31$ December $2023.$

$($b$)$ Balance sheet as at $31$ December $2023.$