Trial Balance of Transit Ltd.
Example 1
Just before you launch yourself into the question that follows remember that everything you have learnt about double entry bookkeeping and the presentation of year end accounts is valid in the context of companies, subject only to the points we have added in this session.
The following is the trial balance of Transit Ltd at 31 March 2008.
Issued share capital (ordinary shares of Sh1 each)
Leasehold properties, at cost
Motor vans, at cost (used for distribution)
Provision for depreciation on motor vans to 31 March 2007
Administration expenses
Distribution expenses
Stock, 31 March 2007
Purchases
Sales
Directors’ remuneration (administrative)
Rents receivable
Investments at cost
Investment income
7% Debentures
Debenture interest
Bank interest
Bank overdraft
Debtors and creditors
Interim dividend paid
Profit and loss account, 31 March 2007
Sh
75,000
2,500
7,650
10,000
12,000
138,750
25,000
6,750
1,050
162
31,000
1,260
311,122
Sh
42,000
1,000
206,500
3,600
340
15,000
730
24,100
17,852
311,122
You ascertain the following:
All the motor vans were purchased on 1 April 2005. Depreciation has been, and is to be, provided at the rate of 20% per annum on cost from the date of purchase to the date of sale. On 31 March 2008 one van, which had cost Sh900, was sold for Sh550, as part settlement of the price of Sh800 of a new van, but no entries with regard to these transactions were made in the books.
The estimated corporation tax liability for the year to 31 March 2008 is Sh12,700.
It is propose
