Question
Let us assume that XYZ Ltd undertook the following transactions in March 2016. (18 marks) 2016 Transactions January 1 Balances brought forward: Cash GH230; Bank
Let us assume that XYZ Ltd undertook the following transactions in March 2016. (18 marks)
2016 |
| Transactions |
January
| 1 | Balances brought forward: Cash GH230; Bank GH 4756
|
2 | The following paid their accounts by cheque, in each case deducting 5 per cent cash discounts: R Boateng GH140; E Takyi GH220; R Henaku GH300 (all amounts are pre-discount). | |
4 | Paid rent by cheque GH120 | |
6 | J Quarshie lent XYZ Ltd GH1000 paying cheque | |
8 | XYZ Ltd paid the following accounts by cheque in each case deducting a 2per cent cash discount: N Badu GH360; P Tawiah GH480; C Hinson GH800 (all amounts are pre-discount). | |
10 | XYZ Ltd paid motor expenses in cash GH44 | |
12 | H Hammond pays his account of GH77, by cheque GH74, deducting GH3 cash discount | |
15 | XYZ Ltd paid wages in cash GH160 | |
18 | The following paid their accounts by cheque, in each case deducting 5 per cent cash discount: C Awuakye GH260; Winner Ltd GH340; H Manu GH460 (all amounts are pre-discount) | |
21 | Cash withdrawn from the bank GH350 for business use | |
24 | Cash drawings GH120 | |
25 | XYZ Ltd paid T Sowah his account of GH140, by cash GH133, having deducted GH7 cash discount | |
29 | Bought fixtures paying by cheque GH650 | |
31 | Received commission by cheque GH 88 |
Required:
- Prepare a three-column cash book for XYZ Ltd, balancing it on January 31, 2016. (18 marks)
- Outline two (2) tools for financial statement analysis. (2 marks)
5)
The following is an extract of financial records of ABC ltd as at 31 December 2017.
2017 2016
GHS GHS
Sales 34,000 28,000
Gross profit 23,000 18,500
Net profit 8,000 7,500
Inventory 3,900 3,600
Current asset 7,200 5,500
Current liabilities 6,900 6,000
Net assets 22,000 19,000
Required
Compute and interpret the following ratios for the company: (16 marks)
- Gross profit margin
- net profit margin
- asset utilization ratio
- current ratio
- quick ratio
- Mention four weakness of ratio analysis. (4 marks)
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