b) The following trial balance was extracted from the books of Mapema Traders Ltd. as at 31 March 2008:
|
|
Sh.
|
Sh.
|
|
Ordinary shares Sh. 10 each
|
|
18,000,000
|
|
10% Preference shares Sh. 10 each
|
|
3,000,000
|
|
8% Loan stock
|
|
3,000,000
|
|
Share premium
|
|
2,400,000
|
|
Trade debtors
|
9,900,000
|
|
|
Trade creditors
|
|
4,440,000
|
|
Purchases and sales
|
126,600,000
|
144,000,000
|
|
Discounts allowed
|
150,000
|
|
|
Discounts received
|
|
390,000
|
|
Freehold buildings:
|
|
|
|
At cost
|
15,000,000
|
|
|
Provision for depreciation
|
|
1,500,000
|
|
Fixtures and fittings:
|
|
|
|
At cost
|
19,200,000
|
|
|
Provision for depreciation
|
|
7,680,000
|
|
Stock April 2007
|
12,600,000
|
|
|
Returns outwards
|
|
2,400,000
|
|
Selling and distribution expenses
|
5,010,000
|
|
|
Establishment expenses
|
3,900,000
|
|
|
Administration expenses
|
1,680,000
|
|
|
Bad debts written off
|
120,000
|
|
|
Provision for doubtful debts
|
|
540,000
|
|
Profit and loss account at 1.4.2007
|
|
10,860,000
|
|
Goodwill
|
4,800,000
|
|
|
Bank Overdraft
|
_______
|
750 000
|
|
|
198,960,000
|
198,960,000
|
Additional information:
1. The debtors balance includes Sh.600,000 due from Otieno who has now been declared bankrupt and it has been decided to write-off this debt as a bad debt.
2. The provision for doubtful debts is to be adjusted to 5 % of trade debtors at 31 March 2008.
3. Establishment expenses prepaid at 31 March 2008 amount to Sh. 120,000. The difference is to be written off during the year.
4. Administration expenses accrued due at 31 March 2008 amounted to sh.210,000.
5. The company paid the interest on the loan stock for the year ended 31 March 2008 on 28 May 2008.
6. Gross profit is at the rate of 20% of sales.
7. Depreciation is provided annually on the cost of fixed assets held at the end of the year at the following rates:
Freehold buildings 2 %
Fixtures and fittings 10%
8. The company's directors propose that the preference share dividend be paid, a dividend of 10% on the ordinary shares to be paid and to transfer an amount of Sh.7,500,000 to General Reserve.
Required:
Post the sales ledger and the purchases ledger control accounts for the month of December 2009 and derive the respective debit and credit closing balances on 31December 2009.
Required
Prepare a cash flow statement for the year ended 31st March 2010 in accordance to IAS7 using the indirect method