Solve in English stop using swahili

Sales revenue is given. Cost of sales requires calculating closing inventory, which is derived from the gross profit margin.

• Sales = Sh. 91,000
• Gross Profit (20% of Sales) = $0.20 \times \text{Sh. } 91,000 = \text{Sh. } 18,200$
• Cost of Sales = Sales - Gross Profit = $\text{Sh. } 91,000 - \text{Sh. } 18,200 = \text{Sh. } 72,800$
• Opening Inventory (1 July 2015) = Sh. 26,400
• Purchases = Sh. 68,000
• Closing Inventory = Opening Inventory + Purchases - Cost of Sales $= \text{Sh. } 26,400 + \text{Sh. } 68,000 - \text{Sh. } 72,800 = \text{Sh. } 21,600$

• Selling and distribution expenses: Sh. 2,750
• Administrative expenses: Sh. 5,300 (from trial balance) - Sh. 500 (prepayment, additional info 2) = Sh. 4,800
• Discounts allowed: Sh. 1,350
• Bad debts written off: Sh. 640 (additional info 4)
• Increase in allowance for doubtful debts:
  • Trade receivables (before write-off) = Sh. 14,640
  • Trade receivables (after write-off) = $\text{Sh. } 14,640 - \text{Sh. } 640 = \text{Sh. } 14,000$
  • New allowance = 5% of Sh. 14,000 = Sh. 700 (additional info 5)
  • Old allowance (1 July 2015) = Sh. 610
  • Increase in allowance = $\text{Sh. } 700 - \text{Sh. } 610 = \text{Sh. } 90$
• Depreciation - Machinery: 10% of Sh. 18,000 (cost) = Sh. 1,800 (additional info 6)
• Depreciation - Furniture:
  • Cost = Sh. 6,000
  • Carrying value (1 July 2015) = Sh. 6,000 - Sh. 2,160 (accumulated depreciation) = Sh. 3,840
  • Depreciation = 20% of Sh. 3,840 = Sh. 768 (additional info 6)
• Insurance expense: Sh. 2,100 (total paid for 3 years) / 3 years = Sh. 700 (additional info 3)

Furaha Ltd.
Income Statement for the year ended 30 June 2016
(All figures in Sh. '000)

• Freehold property (cost): Sh. 28,000
• Machinery:
  • Cost: Sh. 18,000
  • Accumulated depreciation (1 July 2015): Sh. 5,400
  • Depreciation for the year: Sh. 1,800
  • Total accumulated depreciation = $\text{Sh. } 5,400 + \text{Sh. } 1,800 = \text{Sh. } 7,200$
  • Net book value = $\text{Sh. } 18,000 - \text{Sh. } 7,200 = \text{Sh. } 10,800$
• Furniture:
  • Cost: Sh. 6,000
  • Accumulated depreciation (1 July 2015): Sh. 2,160
  • Depreciation for the year: Sh. 768
  • Total accumulated depreciation = $\text{Sh. } 2,160 + \text{Sh. } 768 = \text{Sh. } 2,928$
  • Net book value = $\text{Sh. } 6,000 - \text{Sh. } 2,928 = \text{Sh. } 3,072$
• Total Non-Current Assets = $\text{Sh. } 28,000 + \text{Sh. } 10,800 + \text{Sh. } 3,072 = \text{Sh. } 41,872$

• Closing Inventory: Sh. 21,600 (calculated in part a)
• Trade Receivables (Net):
  • Original: Sh. 14,640
  • Less: Bad debts written off: Sh. 640
  • Adjusted receivables: $\text{Sh. } 14,000$
  • Less: Allowance for doubtful debts (new): Sh. 700
  • Net trade receivables = $\text{Sh. } 14,000 - \text{Sh. } 700 = \text{Sh. } 13,300$
• Bank balance and cash in hand: Sh. 2,100
• Prepayments:
  • Administrative costs prepayment: Sh. 500
  • Insurance prepayment: Sh. 1,400 (Sh. 2,100 total paid - Sh. 700 expense for the year)
  • Total Prepayments = $\text{Sh. } 500 + \text{Sh. } 1,400 = \text{Sh. } 1,900$
• Total Current Assets = $\text{Sh. } 21,600 + \text{Sh. } 13,300 + \text{Sh. } 2,100 + \text{Sh. } 1,900 = \text{Sh. } 38,900$
• Total Assets = $\text{Sh. } 41,872 + \text{Sh. } 38,900 = \text{Sh. } 80,772$

• Ordinary Share Capital: Sh. 30,000
• 10% Preference Share Capital: Sh. 20,000
• Share Premium: Sh. 5,000
• Retained Earnings:
  • Opening (1 July 2015): Sh. 12,330
  • Add: Profit for the year: Sh. 6,242
  • Less: Interim Preference Dividend paid: Sh. 800
  • Less: Interim Ordinary Dividend paid: Sh. 1,200
  • Less: Proposed Ordinary Dividend (6% of Sh. 30,000): Sh. 1,800
  • Less: Proposed Preference Dividend (10% of Sh. 20,000): Sh. 2,000
  • Retained Earnings (30 June 2016) = $\text{Sh. } 12,330 + \text{Sh. } 6,242 - \text{Sh. } 800 - \text{Sh. } 1,200 - \text{Sh. } 1,800 - \text{Sh. } 2,000 = \text{Sh. } 12,772$
• Total Equity = $\text{Sh. } 30,000 + \text{Sh. } 20,000 + \text{Sh. } 5,000 + \text{Sh. } 12,772 = \text{Sh. } 67,772$

• Non-Current Liabilities:
  • 8% Debentures: Sh. 2,000
• Current Liabilities:
  • Trade Payables: Sh. 7,200
  • Proposed Dividends:
    • Proposed Ordinary Dividend: Sh. 1,800
    • Proposed Preference Dividend: Sh. 2,000
    • Total Proposed Dividends = $\text{Sh. } 1,800 + \text{Sh. } 2,000 = \text{Sh. } 3,800$
  • Total Current Liabilities = $\text{Sh. } 7,200 + \text{Sh. } 3,800 = \text{Sh. } 11,000$
• Total Equity and Liabilities = $\text{Sh. } 67,772 + \text{Sh. } 2,000 + \text{Sh. } 11,000 = \text{Sh. } 80,772$

Furaha Ltd.
Statement of Financial Position as at 30 June 2016
(All figures in Sh. '000)