The financial year of Sand limited ends on 30 September.

During the year ended 30 September 2016 the following transactions took place.

1. The compny made a profit for the year of $20 750.
2. An interim dividend of $4500 was paid on the ordinary shares.
3. The total dividend on the 12% preference shares was paid.
4. A transfer of $5000 was made to the general reserve.

Required

a) Complete the following statementof changes in equity for the year ended 30 September 2016.

Ordinary Share Capital...Preference Share Capital...General Reserve...Retained Earnings...Total

On 1st October.......................................................100000....................................50000....................................14000.......................31000....................195000

Profit for the year

Preference Dividend paid

Ordinary Dividend Paid

Transfer to General Reserve

On 30 September 2016

Sand Limited provided the following information at 30 September 2016.

$

3% Debentures (repayable 2020) 15000

Premises at Cost 135200

Equipment at cost 37600

Motor Vehicles at cost 54000

Provision for depreciation - equipment 7520

Motor Vehicles 10800

Trade Receivable 10840

Trade Payable 7460

Other receivables 472

Other payable 130

Bank 4294 credit

Inventory 12613

Provision for doubtful debts 271

Required

b) Make a statement of financial position at 30 September 2016.

Sand Limited sells and buys on both cash and credit terms. Credit customers are allowed 28 days in which to pay their accounts. The credit suppliers allow Sand Limited 30 days in which to pay their accounts. The following information was available for the year ended 30 September 2016.

Sales $ Purchase $

Cash 67500 28600

Credit 152500 94000

Required

c) Calculate the collection period for trade receivables. Use the amount of trade receivables before the provision for doubtful debts.

d) Calculate the payment period for trade payables.

c) Comment on your answers to (c) and (d)