Description
Legal Practice Management
- a) The following trial balance was extracted from the books of E. Wamithi, a small scale trader on 31st March, 2011
Shs Shs
Sales 60,000
Capital 30,000
Purchases 30,000
Sales Returns 5,000
Carriage in 2,000
Wage outstanding 2,000
Purchase Returns 1,000
Carriage out 3,000
Rent received 1,000
Depreciation on plant 4,000
Reserve for doubtful debts 1,000
Plant account 20,000
Salaries and wages 3,000
Sundry creditors 6,000
Drawings 10,000
Bad debtors 2,000
Loans 38,000
Premises 20,000
Stock 1.4.2010 25,000
Sundry debtors 15,000
139,000 139,000
Additional information:
- Stock on 31.3.2011 was Kshs.40,000. A fire broke out in the go-down and destroyed stock worth Kshs.5,000. Insurance company had accepted the claim in full.
- Provide for bad debts @ 10% and provide for discount on debtors @ 5% and on creditors @ 10%.
- Depreciate buildings at the rate of 15% p.a.
- Rent outstanding amounted to Kshs.1,000.
- Closing stock includes samples worth Kshs.2,000.
Required:
From the above data, prepare an income statement and a balance sheet as at 31st March, 2011.
(10 marks) (b) Explain the importance of qualitative characteristics in the financial accounting reports.
(5 marks)
ATP 106 Legal Practice Management - Nov 2012
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