QUESTION TWO The following trial balance was extracted from the books of Filisika Ltd As at 31 st October 2020 Sh 000 Sh 000 Ordinary share capital (Sh 10 par value) 15,000 Share premium 800 10 debentures 1,000 General reserve 1,000 Revenue reserve (1 st November 2019) 1,620 8 redeemable preference shares 8,000 Goodwill 2,500 Inventory (1 st November 2019) 2,790 Purchases and sales 22,180 37,970 Discounts allowed and discount received 340 502 Salaries 2,850 Rates and insurance 1,702 Office expenses 1,472 Directors remuneration 500 Interim dividend paid Preference 320 Ordinary 1,500 Financial Assets (at fair value) 8,000 Trade receivables and trade payables 2,400 2,010 Allowance for doubtful debts 280 Bank balance 1,278 Buildings 17,000 Furniture and fittings 1,500 Motor vehicles 3,100 Provision for depreciation Furniture and fittings 300 Motor vehicles 450 Investment income 550 Debenture interest 50 69,482 69,482 Additional Information The cost and net realizable value of the inventory as at 31 st October 2020 was Sh 3,650,000 and 3,560,000 respectively Invoices issued amounting to Sh 365,000 had been erroneously been treated as invoices received Depreciation is to be provided as follows Asset Rates per annum Furniture and fittings 12 5 on reducing balance Motor vehicles 10 on cost Ignore depreciation on buildings Allowance for doubtful debts is to be adjusted to Sh 240,000 Bad debts amounting to Sh 40,000 are to be written off Insurance amounting to Sh 480,000 had been paid to cater for a period of up to 31 January 2021 A provision for accrued debenture interest of Sh 50,000 and preference dividend of Sh 320,000 are to be made Corporation tax for the year is estimated at Sh 1,614,000 The directors propose to pay a final dividend of 10 of ordinary share capital and to transfer Sh 500,000 to the general reserve Required Statement of Comprehensive Income ended 31 st October 2020 (10 Marks) Statement of financial position as at 31 st October 2020 (5 Marks)

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Posted on May 15, 2024

QUESTION TWO

The following trial balance was extracted from the books of Filisika Ltd. As at 31^st October 2020

	Sh. 000	Sh. 000
Ordinary share capital (Sh. 10 par value)		15,000
Share premium		800
10% debentures		1,000
General reserve		1,000
Revenue reserve (1^st November 2019)		1,620
8% redeemable preference shares		8,000
Goodwill	2,500
Inventory (1^st November 2019)	2,790
Purchases and sales	22,180	37,970
Discounts allowed and discount received	340	502
Salaries	2,850
Rates and insurance	1,702
Office expenses	1,472
Directors remuneration	500
Interim dividend paid: Preference	320
Ordinary	1,500
Financial Assets (at fair value)	8,000
Trade receivables and trade payables	2,400	2,010
Allowance for doubtful debts		280
Bank balance	1,278
Buildings	17,000
Furniture and fittings	1,500
Motor vehicles	3,100
Provision for depreciation: Furniture and fittings		300
Motor vehicles		450
Investment income		550
Debenture interest	50
	69,482	69,482

Additional Information:

The cost and net realizable value of the inventory as at 31^st October 2020 was Sh. 3,650,000 and 3,560,000 respectively.
Invoices issued amounting to Sh. 365,000 had been erroneously been treated as invoices received.
Depreciation is to be provided as follows:

Ignore depreciation on buildings

Allowance for doubtful debts is to be adjusted to Sh. 240,000
Bad debts amounting to Sh. 40,000 are to be written off.
Insurance amounting to Sh. 480,000 had been paid to cater for a period of up to 31 January 2021
A provision for accrued debenture interest of Sh. 50,000 and preference dividend of Sh. 320,000 are to be made.
Corporation tax for the year is estimated at Sh. 1,614,000
The directors propose to pay a final dividend of 10% of ordinary share capital and to transfer Sh. 500,000 to the general reserve.

Required: