The following trial balance was extracted from the books of joyce mello as at 30 April 2017: Sh"000" Sh"000" Inventory as at 1 may 2016 50,000 Purchases 170,020 Returns outward 4,600 Cash in hand 13,400 Bank balance 32,660 Buildings at cost 50,000 Sundry expenses 840 Stationery 1,640 Legal fees 280 Allowance for doubtful debts 3,500 Trade receivables and trade payables 36,000 39,670 Salaries 39,000 Capital 116,800 Selling and distribution cost 1,600 Discounts allowed and discounts received 6,300 4,600 Sales 229,950 Equipment at cost 5,000 Rates and insurance 4,000 Returns inward 1,550 Accumulated depreciation(1 may 2016): Buildings Equipment 11,400 1,770 412,290 412,290 Additional information: - Allowance for doubtful debts is to be increased to 5,000,000 - Rates due as at 30 April 2017 amounted to sh 500,000 - Inventory as at 30 April 2017 was valued at sh 52,000,000 - Drawings amounting to sh 10,000,000 have been debited to the capital account - Depreciation is to be charged on cost as follows: Asset Rate per annum Buildings 5% Equipment 10% - Insurance amounting to sh 200,000 relates to the year ending 30 April 2018. Required: The income statement for the year ended 30 April 2017 .

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following trial balance was extracted from the books of joyce mello as at 30 April 2017:

	Sh"000"	Sh"000"
Inventory as at 1 may 2016	50,000
Purchases	170,020
Returns outward		4,600
Cash in hand	13,400
Bank balance	32,660
Buildings at cost	50,000
Sundry expenses	840
Stationery	1,640
Legal fees	280
Allowance for doubtful debts		3,500
Trade receivables and trade payables	36,000	39,670
Salaries	39,000
Capital		116,800
Selling and distribution cost	1,600
Discounts allowed and discounts received	6,300	4,600
Sales		229,950
Equipment at cost	5,000
Rates and insurance	4,000
Returns inward	1,550
Accumulated depreciation(1 may 2016): Buildings Equipment		11,400 1,770
	412,290	412,290

Additional information:

- Allowance for doubtful debts is to be increased to 5,000,000

- Rates due as at 30 April 2017 amounted to sh 500,000

- Inventory as at 30 April 2017 was valued at sh 52,000,000

- Drawings amounting to sh 10,000,000 have been debited to the capital account

- Depreciation is to be charged on cost as follows:

Asset	Rate per annum
Buildings	5%
Equipment	10%

- Insurance amounting to sh 200,000 relates to the year ending 30 April 2018.

Required:

The income statement for the year ended 30 April 2017 .

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