Profit statement for the year ended 30 June
1999 2000
Sh. Sh.
Sales 3,000,000 4,800,000
Less: cost of goods sold 1,650,000 2,700,000
Gross profit 1,150,000 2,100,000
Less: trading expenses 675,000 825,000
Trading profit 675,000 1,275,000
Less: Debenture interest 37,500 37,500
Net profit before taxation 637,500 1,275,000
Less: Corporation tax 240,000 480,000
Net profit after taxation 397,500 757,500
Less: Ordinary share dividend 187,500 262,500
Undistributed profit for the year 210,000 495,000
Balance sheet as at 30 June 1999 2000
Sh. Sh. Sh. Sh.
Fixed assets at cost 1,500,000 2,100,000
Less: Depreciation 300,000 1,200,000 375,000 1,725,000
Current assets:
Stock 600,000 825,000
Debtors 375,000 525,000
Cash 120,000 1,350,000
Less: current liabilities 1,095,000
Creditors 217,500 300,000
Taxation 240,000 480,000
Proposed dividend 187,500 262,500
Bank overdraft _______ 97,500
(645,000) (1,140,000)
1,650,000 1,935,000
Financed by:
Ordinary share capital
(Authorised and issued) 750,000 750,000
Undistributed profits 525,000 1,020,000
10% debentures 375,000 165,000
1,650,000 1,935,000
Required:
(i) Compute six accounting ratios for both 1999 and 200(1 which you feel would be of particular value in assessing the Profitability and Liquidity of Munyah Ltd. (12 marks)
(ii) Comment on the current position of the company with the aid of the accounting ratios computed in (i) above and any other information that you consider to be relevant. (3marks)
QUESTION THREE
Mr. Otuom Polo is the sole proprietor of a small business. The following trial balance was extracted from his books at 31 March 2000.
Sh. ‘000’ Sh. ‘000’
Capital 4,896
Freehold land and buildings (at cost) 3,600
Plant and machinery at cost 3,480
Provision for depreciation – plant and machinery 1,680
Delivery vans 960
Provision for depreciation – delivery vans 672
Loose tools at valuation on 1 April 1999 288
Stocks 1 April 1999 2,232
Purchases 4,440
Loose tools 192
Sales 15,840
Wages and Salaries 5,288
Rates and Insurance 384
Repairs and maintenance of buildings 240
Sales expenses including vehicle running costs 344
Electricity and power 1,440
Industrial training levy 72
Administration expenses 672
Provision for doubtfuldebts 240
Debtors and Creditors 1,984 1,928
Drawings 480
Bank 864
Cash in hand 24 _____
26,120 26,120