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The following balances were extracted from the books of Biashara Kubwa Enterprise, a wholesale business, as at 31 October 2011: ...

      

The following balances were extracted from the books of Biashara Kubwa Enterprise, a wholesale
business, as at 31 October 2011:
Sh.
Drawings 660,000
Trade receivables 990,000
Purchases 2,303,840
Sales returns 79,420
Capital 4,104,100
Trade payables 330,000
Sales 4,691,280
Purchase returns 120,340
Discount received 93,720
Provision for depreciation: Motor vehicle 176,000
Fixtures and fittings 63,800
Allowance for doubtful debts 44,000
15% bank loan 220,000
Salaries and wages 1,034,000
Discount allowed 54,560
Bank balance 568,260
Cash in hand 26,400
Electricity expenses 103,840
Rent and rates 54,560
Freehold premises (cost) 1,569,700
Fixtures and fittings (cost) 334,400
Motor vehicles (cost) 462,000
Stationery 34,320
Postage and telephone expenses 44,000
Insurance premiums 13,200
Bad debts written off 15,840
Motor vehicle expenses 84,920
Inventory (1November 2010) 1,393,480
Interest on bank loan 16,500
Additional information:
1. The following were the values provided on inventory as at 31 October 2011:
Replacement cost Sh. 1,036,400
Net realizable value Sh. 1,366,200
2. Sales include Sh. 300,000 worth of goods sold by Biashara Kubwa Enterprise agents', who are
allowed 15% commission on such sales. The transaction has not been recorded in the books.
3. Depreciation is to be provided as follows:
Fixtures and fittings 10% per annum on reducing balance basis. Motor vehicles
15% per annum on straight line basis
4. Annual insurance premium amounted to Sh. 12,000
5. As at 31 October 2011, there was a balance of Sh. 65,000 received from a customer in cash
6. Salaries and wages were in arrears of Sh. 35,000
7. The electricity bill for the month of October of Sh. 14,500 was received on 5 November 2011
8. Stationery stock amounted to Sh. 8,750
9. An allowance of 5% is to be maintained for doubtful debts
10.Goods worth Sh. 48,840 had been distributed to potential customers as free samples
Required:
(a) Income statement for the year ended 31 October 2011
(b) Statement of financial position as at 31 October 2011

  

Answers


Kavungya
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fig4316520191102.png
fig4416520191103.png
Kavungya answered the question on May 16, 2019 at 08:04


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