FeClient Current liabilities: Accounts payable Accruals 150,000 60,000 210,000 1,250,000 160,000 45,000 205,000 1,275,000 Additional Information 1. Net Income for the year amount to Kshs.250,000. Dividends of Shs.140,000 were declared and paid cash 2. The only non-cash expense was depreciating which totalled Shs,60,000. 3. Marketable securities costing Shs.15,000 were sold for Shs.35,000 cash, resulting in a Shs.20,000 non-operating gain. 4. The company purchased plant assets for Shs. 100,000 making a Shs.30,000 cash deposit and signed a hire purchase contract for the balance of the purchase price Required: Prepare a cashflow statement using the indirect method. (15 marks) [Total : 20 marks] 00:6 inre 30 25 Kenya Airways Required: Calculate for each years the following ratios: i) Current ration ii) Quick ratio iii) Average Collection period iv) Average Sales period v) Debt-Equity ratio vi) Profit margin vii) Return on total assets viii) Return of shareholders' equity b) (25 marks) Using the above ratio, comment on the results of the expansion program (5 marks) [Total : 30 marks Question Four (5 marks) a) Why is a cashflow statement prepared? b) You have been provided with the following statement of financial position as at December 31 by the managing director of Mwembe Auto spares to assist with preparation of a cashflow statement. 2013 2014 Assets Non Current Assets: Plant & Equipment (Net) 600,000 640,000 Current Assets Cash Marketable Security Inventory Account Receivable 50,000 40,000 320,000 240.000 650,000 1,250,000 45,000 25,000 330,000 235,000 635.000 1,275,000 160,000 Total Assets Financial by Equity Ordinary share Retained Earnings 160,000 380,000 540,000 490,000 650,000 Non-Current liabilities Hire purchase loan Bank loan 500,000 500,000 70,000 350.000 420,000 Page 5 of 6