UNIVERSITY OF TECHNOLOGY MAURITIUS FINANCIAL ACCOUNTING COURSEWORK ON DERBY LIMITED The Company works in the Tourism industry in Mauritius. It started operations on 1 January 2018 and the following ledger balances appear in the books of accounts afterthe closing ofthe Final Accounts as at 31 December 2018. LEDGER BALANCES AS AT 31 DECEMBER 2018 RS 000's Trade Debtors 2,500 Share Capital 3,500 Motor Vehicles (At Cost) 1,500 Property (at Cost) 5,000 10% Debentures 4,000 Plant 8t Machinery [At Cost) 2,500 Share Premium 500 Trade Creditors 3,000 Inventory 1,500 Income Tax Payable 70 Plant a Machinery (Agg. Depreciation) 475 Retained Earnings 1,000 Furniture 8t. Fittings (At Cost) 500 Other Receivables 45 Furniture at Fittings (Agg Depreciation) 100 General Reserve 300 Motor Vehicles (Agg Depreciation) 600 Bank balance 100 Other Creditors 100 During the year to 31 December 2019, the summary of transactions is as follows: Banking Credit Revaluation Transactions Transactions Remarks R5 R5 Issue of Shares 1,000,000 Payment to Debenture Holders 400,000 Paid on 31 March 2019 Interest paid on Debenture 400,000 Paid on 31 March 2019 Property Revalued by a professional Valuer 6,500,000 0n 1 April 2019 Received from Trade Debtors 7,300,000 Payment to Trade Creditors 5,000,000 Expenses paidlsee details below) 2,230,000 Income Tax paid 70,000 Sales 1,500,000 3,500,000 Purchases 1,450,000 3,000,000 Dividend Paid 100,000 Additional Information 1 The Debentures were raised in April 2013 and the repayment is in 10 equal yearly instalments. The first instalment and the payment of interest to them were made on 31 March 2019 2 The depreciation policy ofthe company is as follows: Plant St Machinery Furniture is Fittings MotorVehicles 10% on Diminishing Balance Method 10% on Straight Line Method 20% on Straight Line Method The Company charges a full year depreciation in the year of purchase and none in the year ofdisposal 3 Included in the purchases is the acquistion of an imported second-hand vehicle on 1 April 2019 for Rs 450,000 that was settled by cheque 4 Included in the Sales is the disposal of furniture for Rs 50,000 that was settled by cheque 5 The cost of the furniture disposed was Rs 100,000 and its aggregate depreciation was Rs 20,000 6 The Expenses paid duringthe year are made up or the following: Administrative Salaries Rent, Rates & Taxes Electricity 0 Telephone Printing & Stationary Licenses St Insurances MotorVehicle Expenses Salesmen Salaries Salesmen Commission Carriage outwards Audit fees 7 The MotorVehicIes were exclusively used by the Salesmen Rs 1,200,000 300,000 150,000 50,000 25,000 150,000 240,000 35,000 30,000 50,000 2,230,000 8 Closing Stock is valued using the FIFO method and its cost is Rs 3,800,000 and its Net Realisable Value is Rs 3,500,000 9 Included in the Insurances is a Motor Insurance Policy for Rs 12,000 for the period 1 April 2019 to 31 March 2020 10 Included in Debtors at 31 December 2018 is a Provision for Bad Rt Doubtful Debts of R5100,000 11 included in Carriage Outwards is an amount of Rs 10,000 paid fortransporting goods from the supplier to the company's warehouse 12 Make a Provision of 5% on Debtors for Bad & Doubtful Debts at 31 December 2019 13 The following bills were due but unpaid at 31 December 2019: Electricity & Telephone Rent Rs 30,000 20,000 14 A Provision of Rs 60,000 is to be made for Corporate Taxation and Rs 75,000 for Audit fees 15 Discount received of Rs 10,000 from Suppliers and Discount Allowed of Rs 15,000 to customers were not recorded in the books of accounts 16 Dividend Proposed Rs 150,000 Required: 1 Using an Excel spreadsheet prepare an Extended Trial balance at 31 December 2019 in the rollawing sequence: a. Opening Trial Balance at 01 January 2019 b. Banking Transactions during the year c. Credit Transactions during the year d.CurreCtiDn of Errors e. Closing Trial Balance at 31 December 2019 f. Year End Adjustments g. Prot 0 Loss Account h. Balance Sheet 2 Usingthe Excel spreadsheet for the Extended Trial balance at 31 December 2019, prepare the roliawing in ms lformat a.Statement of Profit 8. Loss Account it Other Comprehensive Income for the year ended 31 December 2019 b. Statement of Changes in Equity for the year ended 31 December 2019 c. Statement of Financial Position at 31 December 2019 with comparative figures for 2018 d. Statement of Cash Flows for the year ended 31 December 2019 using the Indirect Method 3 Calculate the following ratios for both 2013 and 2019 and comment on the same a. Working Capital Ratio b. Acid Test Ratio c. Debts Ratio d. Gearing Ratio 4 Calculate the lollowlng ratios for 2019 only and comment on the same a. Receivables Collection Period b. Payables Collection Period c. Inventory Turnover Period d. Return on capital Employed [ROCE) 5 Explain why Pr not equivalent to Cash using examples 6 Explain why Cash Flow is important in business 7 In light at Covid 19,the Wakashio effect and the uncertainty o! the opening of the Mauritius Irontiers to Tourists, what are the implications for the company? 5 Prepare the Notes to the Financial Statements forthe year ended 31 December 2019 Total Marks mmbwmnuw marrow babe 2 2 2 2 5 5