Murungi Company limited extracted the following trial balance as at 31 Dec 2009. DR CR Shs Shs Share

Murungi Company limited extracted the following trial balance as at 31 Dec 2009.

		DR		CR
		Shs		Shs
Share Capital
250,000 Ordinary shares of Shs 100 each				25,000,000
125,000 10% Preference Shares of Shs. 100				12,500,000
10% debentures				10,000,000
Freehold premises at cost		25,000,000
Motor vehicles		7,500,000
Fixture and fittings		1,300,000
Plant and Machinery at cost		2,500,000
Profit and Loss account, 1 Jan 2009				2,685,000
Sales				59,475,000
Stock at 1 Jan 2009		10,775,000
Bad debts written off		125,000
Purchases		16,900,000
Dividends Paid at 30 Jun 2009
Preference dividend		625,000
Ordinary dividend		1,250,000
Debenture Interest paid at 30 Jun 2009		500,000
Trade Debtors/Creditors		2,700,000		1,500,000
Accumulated Depreciation as at 1 Jan 2004
Plant & Machinery				1,025,000
Motor Vehicles				2,250,000
Fixture and fittings				800,000
Salaries and wages		4,100,000
Cash and Bank Balances		4,775,000
Investments		22,500,000
Office Expenses		2,300,000
General Reserves				1,000,000
Selling and distribution Expenses		13,750,000
Directors EmolumentsAuditors Remuneration Preliminay expense Sundry Income Bank Charges Income from Investments	3,700,000 800,000 1,200,000 60,000 122,360,000		1,625,0004,500,000 122,360,000

Additional information available at 31 December 2009

1) Stock Shs. 3,750,000

2) Depreciate fixed Assets as follows;

Motor vehicles at 20% on cost

Fixtures and Fittings at 12 ½% on Book value.

There were no disposals and acquisition of current assets during the year.

3) Expense due but unpaid include salaries and wages shs. 62,500 and office expenses paid in advance amount to shs. 120,000

4) Provision for Bad debts is to be Set at 2 ½ % of Sundry Debtors

5) Debenture interest is payable half yearly, the half year to 31 December 2009 being due on that date.

6) Corporation tax is chargeable at 30 % on the current profits for the year of taxation liabilities

7) The directors of Murungi Co. Ltd. Recommend appropriation as follows;

i) The preminary expense to be witten off ii) Transfer to General reserves shs 1,500,000 be made from Profit and loss account iii) Payment of final dividend of 12 ½% on the ordinary Share Capital

Required;

Trading, Profit and loss Account for the year ended 31 December 2009 (10 marks )

Profit and loss Appropriation account (4 Marks)

Balance sheet as at 31 December 2009 (6 Marks)