The books of Subuko traders in tea showed the following balances as at 31 March 2018:

Shs.

Opening stock of tea 100,000

Purchases Tea 400,000

Salaries paid 80,000

Buildings 95,000

Cash in hand 2,000

Cash at bank 135,000

Rent, rates and council taxes 15,000

Insurance premium paid 3,000

Miscellaneous receipts 10,000

Sales 720,000

Discounts allowed 4,750

Bad debts 3,250

Building repairs 2,900

Miscellaneous expenses 8,700

Advertisement 20,000

Commission to sales manager 32,400

Furniture and fittings 35,000

Air conditioners 30,000

Sundry debtors 100,000

Sundry creditors 80,000

Loan on mortgage 70,000

Interest paid on the above 3,000

Prepaid expenses 4,000

Drawings 18,000

Bills payable (Current liability) 30,000

Bank charges 2,000

Legal charges 6,000

Motor vehicles 80,000

Travelling and conveyance 10,000

Capital 280,000

The following further information was obtained :

1. Closing stock was Shs.55,000.

2. Legal charges include Shs.5,000 for the cost of stamps and registration of a new building acquired during the year.

3. Purchases include 4000 kg tea valued at Shs.20,000, which was found totally spoilt. An insurance claim of Shs.15,000 has been accepted by the insurance company.

4. Travelling and conveyancing include proprietors personal travelling for which he is charged Shs.4, 800.

5. The sales manager is entitled to commission of 7.5% of the total sales. However any bad debts incurred during the year are deductible from such commission entitlements.

6. Debtors include:

7. Shs.10, 000 due from M & C0 (Creditors include Shs.18, 000 due to the same party).

8. Shs.5, 000 due from the sale of furniture.

9. Further bad debts of Shs.2, 000

10. Provision for bad debts is to be created at 2% of net amount outstanding from trade debtors.

11. Depreciation is chargeable as follows:

Buildings 2.5%

Furniture and Fittings 10%

Air conditioners 15%

Motor vehicles 20%

12. Miscellaneous receipts represent sales proceeds of furniture, whose written down value was Shs.12, 000.

13. Prepaid expenses include insurance premiums for the next year.

Required: Prepare a trading, profit and loss account for the year ended 31st March 2018 and a Balance Sheet as at that date.