Description

BOOK KEEPING & ACCOUNTING

 

Ouma Musa carries on a business dealing with the sale of household goods. Its total balances for the year ended 31 ^st December, 2013 are as follows:

	Dr. ‘000’	Cr. ‘000’
Motor Vehicles	3,000
Fixtures	2,000
Stock at 1.1.13	1,000
Sales		15,000
Purchases	7,000
Rent	1,000
Salaries and Wages	1,000
Electricity	500
Telephone	400
Motor vehicle expenses	500
Discounts	600	500
Retu rns	1,000	500
Debtors	4,000
Creditors		3,000
Cash	2,000
Bad debts	500
Provision for bad debts		500
Drawings	1,000
Capital		6 000
	25,500	2

Additional information:

Rent outstanding at the end of the year amount is Shs. 200,000

Salaries and wages paid in advance amount to Shs. 10,000

Accrued electricity is Shs.50,000

Prepaid telephone bills is Shs. 100,000

Stock as at 31 ^st December, 2013 amounted to Shs. 3,000,000

Provision for bad and doubtful debts is to be set at 10% of debtors

Depreciation is to be provided on motor vehicles and fixtures at 10% and 20^th respectively on cost.

Required

1. a) Income Statement and Balance Sheet (statement of financial position) as at 31 ^st December,

2013

(20 Marks) b) Explain the main branches of accounts and their relevance to legal profession.

(5 marks)

 

BOOK KEEPING & ACCOUNTING 1-1-2