Legal Practice Management
- Tom and Mark Advocates have been in practice for several years. They share profits and losses equally.
Their summarized financial statements for the year ended 30th September 2009 are as follows:
Tom and Mark Advocates
Balance Sheet as of 30th September 2009
|Fixed Assets||Shs ‘000’||Shs ‘000’|
|Furniture and Fittings||96|
|Investment in NSE
|Cash at Bank – Office||1,212|
Accrued Salaries 132 (396)
Receipts and Payments Accounts
For The Year Ended 30th September 2010
|Fees for Services Rendered||3,552||Equipment purchased||596|
|Clients deposit for land buying||1,536||Drawings:|
|Clients deposit for a criminal case||1,296||Tom||300|
|Received from clients for disbursements:||Mark||300|
|Stationery||48||Deposit on land|
|Transport||60||Purchase contract for Client||920|
|Telephone and Postage||292|
|Printing & Stationery||152|
|Motor Vehicle Expenses||392|
|Water and Electricity||140|
|Salaries and Wages||960|
Depreciation is to be provided for reducing balance at 121/29/0 for furniture, 15% for equipment, and 25% for motor vehicles.
- Fees in arrears at the year-end were Kshs.1,280,000. The Advocates have agreed to create a reserve against the fees in arrears.
- During the year, the criminal case client was defended in court. The Advocate raised an interim note for Kshs.500,000 but no entries have been made in the books.
- Disbursements for stationery, transport, and miscellaneous expenses, Kshs.4,000 have been charged to the clients’ account.
- Accrued expenses were Kshs.20, OOO, Kshs. 108,000 and Kshs.112,000 for telephone, rent, and salaries respectively.
(a) The Advocates’ income and expenditure account for the year ended 30th September 2010.
(5 Marks) (b) The client’s account(s) for the same period.
(c) Balance Sheet as at 30th September, 2010ATP 106 Legal Practice Management r 2014-1