Reference no: EM133328130
Case: Henry is a new accounting recruit at Green Fields & Co Certified Public Accountants. He has been undergoing a rigorous training and orientation exercise at the firm. A client of the firm, Grout Industries Company Limited (GICL) whose Accountant left abruptly for greener pastures, has brought a list of account balances to aid in the preparation of the final accounts of the Company. This assignment has been referred to Henry to test his financial accounting skills.
The list of account balances as at 31st December 2021 is shown below.
Particulars Amount in UGX
Revenue 31,600,000
Purchases 18,000,000
Opening inventory (1st January 2021) 4,500,000
Storage costs 850,000
Sales persons Salaries and commissions 200,000
Administrative Salaries 3,000,000
General Administrative expenses 580,000
General distribution expenses 490,000
Loan interest paid 100,000
Dividends: interim dividend paid 40,000
Purchase returns 900,000
Purchases Discount 600,000
Non-current assets: cost 18,000,000
Accumulated Depreciation 1 Jan. 2021 3,900,000
Trade accounts Receivable 6,900,000
Accounts Payable 3,800,000
Balance at bank 2,080,000
10% loan (repayable 2025) 12,000,000
Retained earnings 15,240,000
The following information is also available
(i) Inventory as at 31st December 2021 amounted to shs 3,000,000.
(11) A review of the trade accounts receivable total of shs. 6,900,000 shows that debts totaling 400,000/= should be written as bad debts.
Required:
QUESTIONS
- Evaluate four major ways through which a company like GICL can raise capital for expansion purposes
- With illustrations, show how you would interpret Financial statements to the different stake holders using the data provided.
- Identify what you would consider important to appear in your end of year Final accounts for Twekambe industries .
- Explain the meaning of Non -current Assets in business setting?
- Explain the rationale of the Accounting Equation to the various beneficiaries of Accounting information?