CAT1

BBF211;Financial Analysis and Reporting CAT1 24/3/2022 Choose any two. Question one The following is the trial balance at 30th June 2003 of KYU Wholesaler Ltd. Account Titles Debit000 Credit000 Purchases and Sales 412,800 704,000 Transport on purchases 7,600 Discounts 9,200 27,200 Wages and salaries 38,400 Advertising 1 3,600 Insurance 6,400 Transport on sales 31,200 Interest on 13% Bonds 5,200 Salesmen commission 16,400 Rent and rates 36,000 Electricity 18,800 Directors Remuneration 40,000 Repairs and maintenance 4,400 Interim dividend at shs. 100 a share paid 1.1.03 12,000 Furniture and fittings 61,600 Accum. Depreciation on Furniture and fittings 33,200 Motor vehicles 28,800 Accum. Depreciation Motor vehicles 20,400 Debtors and Creditors 190,000 70,000 Goodwill at cost 128,000 Share capital shs. 1,000 Ordinary shares 120,000 Stock at 01.07.02 114,000 Retained profits 42,800 Share premium 60,000 Bank 16,800 13% Bonds, 2002/2003 80,000 Totals 1,174,400 1,174,400 Notes a) Prepayments and Accruals at 30.06.03 are; Prepayments000 Accruals000 Salaries 500 2,900 Insurance 1,600 Salesmen commission 2,000 Auditors Remuneration 5,200 b) It has been confirmed that shs. 5,000,000 from a debtor who has been declared bankrupt are irrecoverable and therefore should be written off as bad debts. The company decides to allow for doubtful debts at 2% of the remaining debtors. c) Corporation tax is charged at 30% on profits d) Depreciation is at 10% straight line for furniture and fittings, and 25% reducing balance for motor vehicles e) Stock at 30.06.03 is valued at shs. 125,600,000 f) Transfer shs. 15,000,000 to Bonds Redemption Reserve. g) A final dividend of shs. 200 per share is proposed. REQUIRED presentation to the directors; (i) A statement of financial position as at 30.06.03 (ii) Statement of comprehensive income for the year ending 30.06.03 Question two, On 1st April 2008, BATU Ltd issued 50,000 ordinary shares of Shs. 1,000 each at a premium of Shs. 200 per share payable as follows: Application Shs. 200 per share Allotment (Including premium) Shs. 500 per share Call (four months after allotment) Shs. 500 per share Applications were received for 90000 shares. On 1st June 2008 allotment was made as follows: Applications for 15,000 shares were rejected and a refund made to the applicants. 45,000 applications were accepted in full. Allotment was made to the remainder pro rata. Excess monies from applicants were utilized towards allotment and call monies due for them. REQUIRED a) General legder entries to record the above transactions b) Explain with calculations how the amounts originally received in the pro rata allotment were utilized. Question three, a) Explain any four approaches of analyzing financial statements (8marks) b) Mention any four components of financial statements (8marks) c) Explain any four ways of issuing shares to the public (9marks)