The financial position as at 31st December, 2019 was as follows: EQUITY AND LIABILITIES GH¢ GH¢ Stated capital:
The financial position as at 31st December, 2019 was as follows:
|
EQUITY AND LIABILITIES |
GH¢ |
GH¢ |
|
Stated capital: |
|
|
|
Ordinary share [40,000 at GHC12.50 each] |
|
500,000 |
|
|
|
160,000 |
|
|
|
660,000 |
|
Long term capital |
|
140,000 |
|
|
|
800,000 |
|
NON-CURRENT ASSETS |
|
|
|
Building and Land |
|
400,000 |
|
Equipment |
|
182,000 |
|
Motor Vehicles |
|
48,000 |
|
|
|
630,000 |
|
CURRENT ASSETS |
|
|
|
Inventory |
40,000 |
|
|
Accounts Receivables |
20,000 |
|
|
Cash at bank |
124,000 |
|
|
|
184,000 |
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
(14,000) |
170,000 |
|
TOTAL ASSETS |
|
800,000 |
Additional Information
The Company has produced the following estimates:
1) The accounts payable figure of GH¢14,000 stated in the financial statement would be
paid in January, 2020.
The following credit purchases are settled a month after the month of purchase, after
deducting two percent (2%) discount.
|
|
GH¢ |
|
January |
28,000 |
|
February |
42,000 |
|
March |
36, 000 |
|
April |
45,000 |
|
May |
41,000 |
|
June |
37,000 |
2) Sales for January will be GH¢51,300 and will increase at the rate of 20% per month until March. In April, sales will rise to GH¢80,000 and this will rise by10% per month thereafter.
Sales will be divided equally between cash and credit sales. Credit customers are expected to pay two months after the sales.70% of sales will be generated by sales agents who will receive 10% commission on sales. The commission is payable one month after the sales.
3) The company intends to purchase further equipment in August for GH¢45,000. However, a deposit of 20% is supposed to be made in June.
4) Accounts receivable as at 31/12/2010 will be settled in January, 2020.
5) Other overheads will be GH¢6,500 per month for the first three months and GH¢8,400 thereafter. Wages and salaries will be GH1¢6,000 per month. Both types of expense will be payable when incurred.
6)
Required:
Prepare a monthly
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