You Have Been Provided With The Following Summarised Accounts of Golden Times LTD
You Have Been Provided With The Following Summarised Accounts of Golden Times LTD
You Have Been Provided With The Following Summarised Accounts of Golden Times LTD
You have been provided with the following summarised accounts of Golden
Times Ltd. For the year ended 31 March 2000:
Profit and loss account for the year ended 31 March 2000
Sh.
Sales (credit) 4,000,00
0
1. The purchases for the year were Sh.2,160,000 while the cost of sales was
Sh.3,000,000.
2. The market price for Golden Times Ltd. Ordinary shares as at 31 March
2000 was Sh.5
3. The company estimates the current value of its freehold property at
Sh.1,100,000.
Required:
(a) Compute the following ratios for Golden Times Ltd.:
(b) Comment on Golden Times Ltd. Liquidity stating the reference points to
which relevant ratios can be compared.
(6 marks)
(Total: 20 marks)
2. Wananchi Pools Ltd. set up a business on 1 July 1999 to sell snooker tables
of a standard size and quality. The company began with Sh.600,000 in the
bank. The tables are purchased for Sh.5,400 each and sold for Sh.7,500
each. A friend of the managing director introduced ART Ltd. a hire
purchase company to Wananchi Pools Ltd. ART requires a deposit of
Sh.2,100 followed by 18 months instalments of Sh.375 each, the first one
payable one month after purchase. Wananchi Pools Ltd. decided to deal in
hire-purchase business on terms and conditions to those ART on deposits
and instalments.
During the year ended 30 June 2000, Wananchi Pools Ltd. bought a total of 300
tables and sold 210 of them. Hire purchase sales were 12 in April 2000, 20 in May
2000 and 30 in June 2000, but 2 of those sold in April were repossessed in June
with the deposit and one instalment having been paid. One of the repossessed
tables was damaged and had to be repaired for Sh.1,800 while the other one was
hardly damaged and could be treated as new stock..
At the year ended 30 June 2000, the following trial balance was extracted:
Sh. Sh.
Capital 600,000
Purchases 1,620,000
Sales 2,133,000
Debtors 470,250
Creditors 43,200
Expenses 135,000
Drawings 480,000
2,776,200 2,776,200
Required:
(a) Trading, profit and loss account for the year ended 30 June 2000.
(8 marks)
(b) (i) Hire purchase debtors account. (3 marks)
(ii) Repossessions account. (2 marks)
(c) Balance sheet as at 30 June 2000. (7
marks)
(Total: 20 marks)