Client:Model File Ltd Prepared by: MK Date: 15/04/07

Period ended: 31st December 2006 Reviewed by: AB Date: 20/04/07

6.04

Subject: Adjusting Journal Entries ASK -

20/04/07
W.P. Balance sheet Profit and loss a/c
DETAILS Ref Dr Cr Dr Cr

1 Trade receivables-Gari Nzuri Ltd H.04/1 600,000

Disposal account B.03/4 600,000
(Being transfer entry proceeds from disposal of KZZ 001)

2 Disposal account B.03/4 526,727

Motor Vehicle-cost B.03/3 526,727
(Being transfer entry cost of KZZ 001 to disposal account)

3 Depreciation B.03/5 131,682

Provision for depreciation B.03/5 131,682
(Being reversal of depreciation charged on KZZ 001)

4 Profit on disposal T.02 73,273

Disposal account B.03/4 73,273
(Being transfer entry cost of KZZ 001 to disposal account)

5 Depreciation B.03/5 11,528

Provision for depreciation B.03/5 11,528
(Being reversal of depreciation overcharged on computers)

6 Repairs and maintenance U.10/2 1,980,000

Land and building B.03/4 1,980,000
(Being accounting for Construction expenses for additional rooms now capitalised)

7 Depreciation B.03/5 35,756

Provision for depreciation B.03/5 35,756
(Being increase in depreciation due expenses now capitalised)

8 Legal and professional fees U.08/2 450,234

Land and building B.03/4 450,234
(Being transfer entry of legal fees on purchase of building now capitalised)

9 Prepaid Operating Lease Q.01 1,000,000

Land and building B.03/4 1,000,000
(Being transfer entry of Cost of Land to Prepaid Operating Lease)

10 Amortisation of prepaid operating lease B.03/5 14,925

Accumulated Amortisation Q.01 14,925
(Being increase in depreciation due expenses now capitalised)

11 Charge for the year U.08/4 400,000

Provision for impairment H.01 400,000
(Being impairment provision against Run Till Dawn which appears doubtful of recovery)

12 Impairment provision U.08/4 767,770

Trade Debtors Suppliers Limited H.04/1 767,770
 (Being accounting for impaired receivables)

13 Directors Remuneration R.04/1 5,340,000

Salaries and wages U.06/1 5,340,000
(Being reclassification of Directors Salary)

14 Goods in transit F.01 500,900

Cost of sales U.01 500,900
(Being accounting for Goods In Transit as at 31st December 2006)

15 Other receivables H.02/1 1,856,000

Trade payables K.04/1 1,856,000
(Being reclassification of debtors with credit balances)

15 Trade receivables H.04/1 1,446,600

Trade payables K.04/1 1,446,600
(Being reclassification of creditors with debit balances)

16 Tax payable N.03/1 1,906,802

Current taxation N.01 1,906,802
(Being accounting for tax payable for the year)

16 Deferred tax 0.01 170,956

Deferred tax credit 0.01 170,956
(Being accounting for deferred tax for the year)
TOTAL 8,747,900 8,554,580 8,465,253 8,658,573
Difference -

Reconciliation of Client's Management Accounts to Audited Financial statements

Shs
Profit as per client management accounts 3,587,810
Less: total of debits to profit and loss account (8,465,253)
Add: total of credits to profit and loss account 8,658,573
Profit as per audited financial statements 3,781,129

Signed on behalf of client by: Simon Makonde

Signature: SM