QUESTION TWO a) The summarized statements of financial position of Dakyebi Ltd at 31 December 2016 and 2017 are as follows. 2017 2016 GH000 GH000 Issued share capital 150,000 100,000 Share premium 35,000 15,000 Retained earnings 41,000 14,000 Long-term loans 30,000 70,000 Payables 48,000 34,000 Bank overdraft. 14,000 Tax payable 33,000 21,500 Proposed dividends 15,000 7,500 Depreciation: Plant and machinery 54,000 45,000 Fixtures and fittings 15,000 13,000

421,000 334,000

Freehold property at cost 130,000 110,000 Plant and machinery at cost 151,000 120,000 Fixtures and fittings at cost 29,000 24,000 Inventories 51,000 37,000 Trade receivables 44,000 42,800 Long-term investments 4,600 Cash at bank 11,400 200

421,000 334,000

The following information is relevant: (a) There had been no disposal of freehold property in the year. (b) A machine tool which had cost GH8,000,000 (in respect of which GH 6,000,000 depreciation had been provided) was sold for GH3,000,000, and fixtures which had cost GH5,000,000 (in respect of which depreciation of GH2,000,000 had been provided) were sold for GH1,000,000. Profits and losses on those transactions had been dealt with through the statement of profit or loss. (c) The statement of profit or loss charge in respect of tax was GH22,000,000. (d) The premium paid on redemption of the long-term loan was GH2,000,000, which has been written off to the statement of profit or loss. (e) The proposed dividend for 2016 had been paid during the year. Page 5 of 6 (f) Interest received during the year was GH450,000. Interest charged in the statement of profit or loss for the year was GH6,400,000. Accrued interest of GH440,000 is included in payables at 31 December 2016 (nil at 31 December 2017). (g) The government stock is a long term investment. Required: Prepare a cash flow statement for the year ended 31 December 2017, in accordance IAS 7 using the indirect method. [20 marks] b) State four (4) external sources of that give indication of impairment loss [4 marks] c) State six (6) benefit of the cash flow statement [6 marks]

QUESTION THREE a) Asetsenapa Commercial Bank is one of the clients of your firm. During your visit at the end of 2018 financial year, the following information relating to bank was given to you. GH Stated Capital 1,465,000 Loans to customers 700,000 Savings and deposits 500,000 Commission and Fees 70,000 Other Operating Expense 190,000 Balance with Bank of Ghana 150,000 National Stabilization levy 40,000 Overdrafts 100,000 Treasury Bills 385,000 Investment and security 200,000 Other operating income 160,000 Non-current Asset 500,000 Income tax 35,000 Interest on loan to customers 175,000 Interest on savings and deposit 85,000 Interest on Overdraft 10,000 Depreciation charged for the year 15,000 Accumulated depreciation 20,000

You are required to prepare the following i. Trial balance for Asetsenapa Commercial Bank Ltd for the year ended 31st December, 2018 [9 marks]

ii. Income and expenditure for the year ended 31st December, 2018 [6 marks] Statement of financial Position as at 31st December, 2018 [5 marks]

b) Below are the financial ratios for the year 2018 for Okay Limited, a company engaged in the buying and shipment of agricultural products. The ratios for the industry have also been provided.

Okay Industry Limited Average Quick ratio 0.52:1 0.84:1 Current ratio 1.20:1 1.80:1 Debtors collection period 46 days 41 days Creditors payment period 70 days 50 days Inventory holding period 58 days 48 days Dividend yield 3.6% 9 % Debt to equity 85% 45% Dividend cover 1.4 times 3.4 times Gross profit margin. 18% 28% Net profit margin 8% 12.8% Return on capital employed 28% 14% Net assets turnover 4.2 times 1.9 times

You are required to assess the performance of Okay Ltd. in comparison with the industry in respect of the profitability, Liquidity, Efficiency and Shareholder's' investment. [10 marks]