Final Accounts of companies

The MBL Company Ltd. operates its activities in small town near Mtwara. The following trial balance relate to MBL Company Ltd. as at 31st December, 2021

Details	Dr (TZS)	Cr (TZS)
100,000 Equity shares of TZS 1,000@ fully paid		100,000,000
8% Redeemable preference shares TZS 1,000@ fully paid		100,000,000
Retained profit		70,000,000
10% Debenture		50,000,000
Sales		585,000,000
Purchases	200,000,000
Opening inventory 1st January 2021	20,000,000
Bank and cash	20,000,000
Motor lorries – at cost	360,000,000
Accumulated depreciation		110,000,000
Freehold property	165,000,000
Repairs expenses	22,000,000
Drivers' wages	60,000,000
Maintenance wages	15,000,000
Parts and consumables	70,000,000
Licenses and insurance	20,000,000
Administration salaries	20,000,000
Sundry administrative expenses	12,000,000
Drivers' overnight expenses	6,000,000
Directors' salaries	25,000,000
Total	1,015,000,000	1,015,000,000

Additional information:

1. Drivers' claims for TZS 150,000 relating to overnight expenses had not been taken into account;
2. Closing inventory as at 31st December, 2021 had a value of TZS 33,000,000;
3. It was estimated that, there was a prepayment of TZS 4,000,000 with regard to licenses and insurance at the end of the year 2021;
4. Depreciation of TZS 62,500,000 is to be charged on vehicles for the year to 31st December, 2021;
5. Income Tax was estimated at TZS 22,400,000.
6. There is a proposed dividend of TZS 20,000,000;
7. The appropriation of after-tax profit for year ended 31st December, 2021 was as follows:
   • MB Company Ltd. management proposed a dividend of TZS 200 for each paid up equity share.
   • Dividend on the 8% preference shares has not yet been paid up to the balance sheet date.
   • On 31st December, 2021 TZS 2,000,000 were transferred to general reserves

You are required to prepare:

1. MBL's income statement for the year ended 31st December, 2021.
2. A statement of financial position as at 31st December, 2021.

Details	TZS	TZS
Sales	585,000,000
Less: Cost of Goods Sold
Opening inventory	20,000,000
Add: Purchases	200,000,000
Goods available for sale	220,000,000
Less: Closing inventory	33,000,000	187,000,000
Gross Profit		398,000,000
Less: Expenses
Depreciation expense	62,500,000
Repairs expenses	22,000,000
Drivers' wages	60,000,000
Maintenance wages	15,000,000
Parts and consumables	70,000,000
Licenses and insurance	16,000,000
Less: Insurance prepayment	4,000,000	12,000,000
Administration salaries	20,000,000
Sundry administrative expenses	12,000,000
Drivers' overnight expenses	6,150,000
Add: Drivers' claims unpaid	150,000	6,300,000
Directors' salaries	25,000,000
Interest on debenture	5,000,000
Total Expenses		313,650,000
Profit Before Tax		84,350,000
Less: Income Tax		22,400,000
Profit After Tax		61,950,000
Less:
8% Preference shares dividend	8,000,000
Proposed equity share dividend	20,000,000
Transfer to general reserves	2,000,000
Total Appropriations		30,000,000
Retained Profit		31,950,000

Details	TZS	TZS
Non-current assets
Freehold property	360,000,000
Motor lorries at cost	172,500,000
Less: Accumulated depreciation	165,000,000	7,500,000
Current assets
Bank and cash	20,000,000
Closing inventory	33,000,000
Prepayment	4,000,000
Total assets		187,500,000
Equity and liabilities
Equity
1,000 equity shares fully paid	100,000,000
8% Redeemable preference shares of TZS 1,000 @ fully paid	100,000,000
General reserves	2,000,000
Retained earnings	101,950,000
Non-current liabilities
10% Debenture	50,000,000
Current liabilities
Unpaid driver's claim	5,000,000
Unpaid debenture interest	20,000,000
Unpaid proposed dividend on equity shares	8,000,000
Unpaid proposed dividend on preference shares	22,400,000
Unpaid tax	20,000,000
Total equity and liabilities		409,500,000