Edit question Question text "The Sales account is closed at the end of accounting period". Indicate whether the statement is true or false (1 marks)

Select one: True False

Question 22 Not yet answered Marked out of 1.00 Flag question Edit question Question text The equity multiplier helps creditors: (1 mark)

Select one: A.

Evaluates entities cash flows B. Evaluates future earnings C. Evaluates entities profitability D. Evaluates entities lending risk Question 23 Not yet answered Marked out of 1.00 Flag question Edit question Question text What does the accounts receivable turnover ratio tell us? ( 1 mark)

Select one: a. Average times receivables are collected b. How often receivables are collected c. Bad debts balance at the year end d. How many times receivables are collected Question 24 Not yet answered Marked out of 10.00 Flag question Edit question Question text Discuss the main weakness on financial statement analysis by ratio analysis. You may type or upload a write up. ( 10 marks). Question 25 Not yet answered Marked out of 15.00 Flag question Edit question Question text The following are the financial statements of Tahidi Limited. Statement of Financial position as at 31st October 2018 Sh.million 2019 Sh.million

Non-current assets:

Property, plant and Equipment 380 305

Intangible assets 250 200

Investments - 25

630 530

Current assets:

Inventory 150 102

Accounts receivable 390 315

Short-term investments 50 -

Cash 2 1

592 418

Total assets 1222 948

Equity and reserves:

Share capital 200 150

Share premium 160 150

Revaluation reserves 100 91

Revenue reserves 160 100

620 491

Non-current liabilities:

Debenture 170 50

Current liabilities:

Accounts payable 127 119

Bank overdraft 85 98

Taxation 120 110

Proposed dividends 100 80

432 407

Total equity and liabilities 1222 948

Additional information: 1. 5,000,000 ordinary shares of Sh. 10 each were issued during the year at a price of Sh. 12 per share. 2. Fixtures and fittings which had an original cost of Sh. 8.5 million and a net book value of Sh. 45 million were sold for Sh. 32 million during the years. 3. The proceeds of the sale of long term investment amounted to Sh. 30 million. 4. The following information relates to tangible non-current assets: 2019 Sh.million 2018 Sh.million

Cost 720 595

Accumulated depreciation 340 290

Net book value 380 305

You are to required prepare and upload: Statement of cash flows, in conformity with the requirements of International Accounting Standard (IAS) 7 Statement of Cash Flows for the year ended 31st October 2019. ( 15 marks)

Question 26 Not yet answered Marked out of 25.00 Flag question Edit question Question text The following balances were extracted from the books of Wamu Estate Agency Limited as at 30 September 2019:

Sh.'000

Ordinary shares of Sh.20 each. 1,000,000

8% preference shares Sh.20 each. 100,000

Share premium 80,000

6% loan 100,000

Accounts payable 175,000

Accounts receivables 830,000

Rental income 3,262,000

Estate commission 1,430,000

Buildings at cost 5,000,000

Provision for depreciation: Buildings 750,000

Fixtures and fittings at cost 1,340,000

Provision for depreciation: Furniture 256,000

Operation cost 101,000

Administration cost 123,000

Bad debts written off 24,000

Provision for doubtful debts 33,000

Retained profit 1 October 2018 1,462,000

Land at cost 1,500,000

Goodwill 160,000

Bank overdraft 430,000

Additional information: 1. Provide depreciation at the following rate: building at 2% using straight line method and Furniture at 10% on reducing balance method. 2. Accounts receivable balance includes Sh. 10,000 due from Musa who has now been declared bankrupt. In the circumstances, it has been decided to write the debt off as a bad debt. 3. The provision for doubtful debts as at 30 September 2019 is to be 5% of trade debtors. 4. Operation costs prepaid as at 30 September 2019 amounted to Sh.4,000. 5. Administration costs outstanding as at 30 September 2019 amounted to Sh.7,000. 6. The company paid the interest on the loan for the year ended 30 September 2019 on 30 October 2019. 7.The company's directors propose that the preference share dividend be paid and a dividend of 10% the ordinary shares be paid. 8. Provide for directors fees at shs. 200,000 and audit fees at shs.160,000. 9. Tax rate is 30% You are required to prepare and upload the following: (i) Statement of income for the year ended 30 September 2019. (12 marks) (ii) Statement of financial position as at 30 September 2019. (13 marks)