1.

You have been provided with the following summarised accounts of Golden
Times Ltd. For the year ended 31 March 2000:

Balance sheet as at 31 March 2000

Fixed assets: Sh. Sh. Sh.
Freehold property (Net book value) 480,000
Plant and machinery (Net book value) 800,000
Motor vehicles (Net book value) 200,000
Furniture and fittings (Net book value) 200,000
1,680,000
Current Assets:
Stocks
1,000,000
Debtors
400,000
Investments
120,000
1,500,000
Current liabilities:
Trade creditors
Bank overdraft 238,400

Corporation tax 878,400

Dividends payable 176,000

107,200 (1,400,000) 120,000

Financed by: 1,800,000

Authorised share capital 800,000
Sh.1 ordinary shares
Issued and fully paid: 400,000 Sh.1 400,000
Ordinary shares
200,000
Capital reserve
800,000
Revenue reserve
Loan capital: 400,000 10% Sh.1
Debentures 400,000
1,800,000

Profit and loss account for the year ended 31 March 2000
 Sh.
Sales (credit) 4,000,00
0

Profit after charging all expenses except

interest on debentures 440,00
0
Less: debenture interest
40,00
Profit before tax
0
Corporation tax
400,00
0

Less: ordinary dividend proposed 176,00

0
Retained profit transferred to revenue
reserve 224,00
0
107,20
0
116,80
0

The following additional information was available:

1. The purchases for the year were Sh.2,160,000 while the cost of sales was
Sh.3,000,000.
2. The market price for Golden Times Ltd. Ordinary shares as at 31 March
2000 was Sh.5
3. The company estimates the current value of its freehold property at
Sh.1,100,000.

Required:
(a) Compute the following ratios for Golden Times Ltd.:

(i) Return on capital employees (1 mark)

(ii) The profit margin (2 marks)
(iii) The turnover of capital (1 mark)
(iv) Current ratio; (1 mark)
(v) Liquid ratio; (2 marks)
 (vi) Number of days accounts receivable are outstanding; (1
mark)
(vii) Property ratio; (2 marks)
(viii) Stock turnover ratio; (1 mark)
(ix) Dividend yield ratio; (1 mark)
(x) Price earnings ratio. (2 marks)

(b) Comment on Golden Times Ltd. Liquidity stating the reference points to
which relevant ratios can be compared.
(6 marks)
(Total: 20 marks)
2. Wananchi Pools Ltd. set up a business on 1 July 1999 to sell snooker tables
of a standard size and quality. The company began with Sh.600,000 in the
bank. The tables are purchased for Sh.5,400 each and sold for Sh.7,500
each. A friend of the managing director introduced ART Ltd. a hire
purchase company to Wananchi Pools Ltd. ART requires a deposit of
Sh.2,100 followed by 18 months instalments of Sh.375 each, the first one
payable one month after purchase. Wananchi Pools Ltd. decided to deal in
hire-purchase business on terms and conditions to those ART on deposits
and instalments.

During the year ended 30 June 2000, Wananchi Pools Ltd. bought a total of 300
tables and sold 210 of them. Hire purchase sales were 12 in April 2000, 20 in May
2000 and 30 in June 2000, but 2 of those sold in April were repossessed in June
with the deposit and one instalment having been paid. One of the repossessed
tables was damaged and had to be repaired for Sh.1,800 while the other one was
hardly damaged and could be treated as new stock..
At the year ended 30 June 2000, the following trial balance was extracted:
Sh. Sh.
Capital 600,000

Purchases 1,620,000

Sales 2,133,000

Debtors 470,250

Creditors 43,200

Expenses 135,000

Drawings 480,000

Bank balances 70,950 _______

2,776,200 2,776,200

Required:
(a) Trading, profit and loss account for the year ended 30 June 2000.
(8 marks)
(b) (i) Hire purchase debtors account. (3 marks)
(ii) Repossessions account. (2 marks)
(c) Balance sheet as at 30 June 2000. (7
marks)
(Total: 20 marks)

3. In relation to Government Accounting explain briefly what is meant by the

following terminologies:

(a) Public Accounts Committee. (5 marks)

(b) Consolidated fund. (5 marks)
(c) Appropriations-in-aid. (5 marks)
(d) Paymaster General. (5 marks)
(Total: 20 marks)