QUESTION 1

You have just been appointed as the financial controller of Sanchez & Gomez Limited, a privately owned entity operating in the fashion wholesale business. You have been asked to attend the forthcoming monthly management meeting and report on aspects of the entitys financial position. You are aware that during the previous financial year the management team has been concerned about the liquidity of the company, and its working capital management. The following information is available from the management accounts for the year ended 30 December 2015:

Prepare a brief report that analyses the working capital and liquidity position of Sanchez & Gomez limited. Include the calculations for the relevant ratios, in your report.

QUESTION 2

6 months to 30 June 2014 "000" 6 months to 30 Dec 2014 "000" 1050 550 1100 950 Inventories at period end Receivables at period end Cash and cash equivalents at period end Trade payables at period end 150 1400 800 250 Short term borrowings at period end Revenue for the period 2250 2000 1500 1300 Cost of sales for the period eneous transactions for Zest The follow 135 marks ember each year. The busines Financial ye Date for September 20.12. Ignore VAT. ck-up of 33.333% on cost. Business's llowing are miscellaneous to siness uses the perpetual inven ocial year on 30 September e method with a mark-up of 33.333% on co Transaction details The owner took a product for Purchased an office come et from stock for personal use, selling price = R7 000.00 "Puter on credit from Simplex Computers (Pty) Ltd R 14 500.00 Credit sales of trading invented "ventory, selling price price =R21 470.00. A debtor returned some of the the goods purchased from Zestra Stores on 26 September 20.12. The he cost price of the goods in question was R 4 200.00 Rent for September for R8 6 R8 600 is not yet paid by the end of September 20.12 Allowance for credit losses Ses needs to be increase by R300. Accrued wages of R3 500 for September 20.12 are not yet recorded. Make the necessary adjustments. Required Show how the above w the above transactions will affect the accounting equation and enter how ccounts in the general leger will be affected 6 months to 30 June 2014 "000" 6 months to 30 Dec 2014 "000" 1050 550 1100 950 Inventories at period end Receivables at period end Cash and cash equivalents at period end Trade payables at period end 150 1400 800 250 Short term borrowings at period end Revenue for the period 2250 2000 1500 1300 Cost of sales for the period eneous transactions for Zest The follow 135 marks ember each year. The busines Financial ye Date for September 20.12. Ignore VAT. ck-up of 33.333% on cost. Business's llowing are miscellaneous to siness uses the perpetual inven ocial year on 30 September e method with a mark-up of 33.333% on co Transaction details The owner took a product for Purchased an office come et from stock for personal use, selling price = R7 000.00 "Puter on credit from Simplex Computers (Pty) Ltd R 14 500.00 Credit sales of trading invented "ventory, selling price price =R21 470.00. A debtor returned some of the the goods purchased from Zestra Stores on 26 September 20.12. The he cost price of the goods in question was R 4 200.00 Rent for September for R8 6 R8 600 is not yet paid by the end of September 20.12 Allowance for credit losses Ses needs to be increase by R300. Accrued wages of R3 500 for September 20.12 are not yet recorded. Make the necessary adjustments. Required Show how the above w the above transactions will affect the accounting equation and enter how ccounts in the general leger will be affected