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Ca) Calculate liquidity ratios and interpret your answer

Ca) Calculate liquidity ratios and interpret your answer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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18:08 A b A + LPM 108 ASSIG... Required (a) Prepare the Manufacturing account for the year ended 31 March 1991 (10 marks) (b) Extract the Balance Sheet as at that date. (10 marks) QUESTION 5 The following balances are extracted from the books of XYZ Ltd at the end of May 2008 and 2009 2009 2008 Details Kshs Kshs Debtors 105,000 85.000 Stock 35,000 45,000 Creditors 63,000 40,000 Provision for taxation 25,000 20,000 Proposed dividend 30,000 30,000 Bank overdraft 17,000 25,000 Sales 1,200,000 1,200,000 Purchases 1.000,000 1,000,000 Required (a) Calculate liquidity ratios and interpret your answer (b) Calculate Average Collection Period for the 2 years' (c) Calculate Average Payment Period for the 2 years (d) Interpret your answers. 8/8 II
Transcribed Image Text:18:08 A b A + LPM 108 ASSIG... Required (a) Prepare the Manufacturing account for the year ended 31 March 1991 (10 marks) (b) Extract the Balance Sheet as at that date. (10 marks) QUESTION 5 The following balances are extracted from the books of XYZ Ltd at the end of May 2008 and 2009 2009 2008 Details Kshs Kshs Debtors 105,000 85.000 Stock 35,000 45,000 Creditors 63,000 40,000 Provision for taxation 25,000 20,000 Proposed dividend 30,000 30,000 Bank overdraft 17,000 25,000 Sales 1,200,000 1,200,000 Purchases 1.000,000 1,000,000 Required (a) Calculate liquidity ratios and interpret your answer (b) Calculate Average Collection Period for the 2 years' (c) Calculate Average Payment Period for the 2 years (d) Interpret your answers. 8/8 II
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