The following Trial Balance was extracted from the books of Hillside Plc at 31st March 2006: K1 000 ordinary shares 8% K1 000 preference shares 7% debentures Land and buildings: cost Accumulated depreciation on buildings on 1st April 2005 Plant and machinery (K348 million cost) Motor vans at cost Accumulated depreciation on vans on 1st April 2005 Profit and loss account b/f Share premium account Inventory at 1st April 2005 Sales Trade Receivables and Payables Bank Purchases Distribution costs General administration expenses Debenture interest Interim dividends: Ordinary Preference Allowance for doubtful debts Additional information available: K'000 130 000 Buildings Plant and machinery 262 500 140 000 20 000 35 000 10. The directors wish to provide for: a) A final ordinary dividend of 5% b) A final preference dividend. 11. Income tax for the year is estimated at K18 million. 45 000 5 800 166 100 18 000 44 900 7 000 10 000 2 800 890 100 K'000 200 000 70 000 100 000 30 000 56 800 4. Depreciation on buildings, and plant and machinery is to be charged as follows: 2% on cost 10% on cost 60 200 344 600 27 000 1. During the year the following transpired in relation to motor vans: a) A new motor van was purchased on 1st January 2006 on credit for K24 million. The amount was still due to the supplier on 31st March 2006. 1 500 890 100 b) A motor van which had cost K16 million four years ago when new was sold for K6.6 million. The proceeds from the sale had not yet been received on 31st March 2006. None of the above matters had been recorded in the books of the company. 2. Depreciation on motor vans has been and is to be provided at the rate of 20% per annum on cost and is charged in full in the year of acquisition and none in the year of disposal. 3. The cost of buildings is K100 million. 5. On 31st March 2006 the company issued bonus shares to the ordinary shareholders on a one (1) to ten (10) basis. No entry relating to this has yet been made in the books. 6. Inventory at 31st March 2006 was valued at K51 million. 7. A bill for administrative expenses for K150 000 was unsettled as at 31st March 2006. 8. Distribution costs include an insurance premium for delivery vans of K200 000 which relates to the period 1st July 2005 to 30th June 2006. 9. The allowance for doubtful debts is to be 22% of receivables outstanding on 31st March 2006. Required: a) Using additional information (1) and (2), prepare the following ledger accounts: i) Motor van account ii) Motor van accumulated depreciation account iii) Motor van disposal account (8 marks) b) Prepare the company's Income Statement for the year ended 31st March 2006. c) Prepare the company's Balance Sheet as at 31st March 2006. (12 marks) (15 marks) The following Trial Balance was extracted from the books of Hillside Plc at 31st March 2006: K1 000 ordinary shares 8% K1 000 preference shares 7% debentures Land and buildings: cost Accumulated depreciation on buildings on 1st April 2005 Plant and machinery (K348 million cost) Motor vans at cost Accumulated depreciation on vans on 1st April 2005 Profit and loss account b/f Share premium account Inventory at 1st April 2005 Sales Trade Receivables and Payables Bank Purchases Distribution costs General administration expenses Debenture interest Interim dividends: Ordinary Preference Allowance for doubtful debts Additional information available: K'000 130 000 Buildings Plant and machinery 262 500 140 000 20 000 35 000 10. The directors wish to provide for: a) A final ordinary dividend of 5% b) A final preference dividend. 11. Income tax for the year is estimated at K18 million. 45 000 5 800 166 100 18 000 44 900 7 000 10 000 2 800 890 100 K'000 200 000 70 000 100 000 30 000 56 800 4. Depreciation on buildings, and plant and machinery is to be charged as follows: 2% on cost 10% on cost 60 200 344 600 27 000 1. During the year the following transpired in relation to motor vans: a) A new motor van was purchased on 1st January 2006 on credit for K24 million. The amount was still due to the supplier on 31st March 2006. 1 500 890 100 b) A motor van which had cost K16 million four years ago when new was sold for K6.6 million. The proceeds from the sale had not yet been received on 31st March 2006. None of the above matters had been recorded in the books of the company. 2. Depreciation on motor vans has been and is to be provided at the rate of 20% per annum on cost and is charged in full in the year of acquisition and none in the year of disposal. 3. The cost of buildings is K100 million. 5. On 31st March 2006 the company issued bonus shares to the ordinary shareholders on a one (1) to ten (10) basis. No entry relating to this has yet been made in the books. 6. Inventory at 31st March 2006 was valued at K51 million. 7. A bill for administrative expenses for K150 000 was unsettled as at 31st March 2006. 8. Distribution costs include an insurance premium for delivery vans of K200 000 which relates to the period 1st July 2005 to 30th June 2006. 9. The allowance for doubtful debts is to be 22% of receivables outstanding on 31st March 2006. Required: a) Using additional information (1) and (2), prepare the following ledger accounts: i) Motor van account ii) Motor van accumulated depreciation account iii) Motor van disposal account (8 marks) b) Prepare the company's Income Statement for the year ended 31st March 2006. c) Prepare the company's Balance Sheet as at 31st March 2006. (12 marks) (15 marks)