The following schedule of assets and liabilities relates to Kona Enterprises. Their year-end is 28 February. 2022 2023 Income received in advance 2 000 1 000 Input VAT 3 000 3 500 Output VAT 6 500 11 500 Prepaid expenses 7 500 5 000 Accumulated depreciation: Equipment 30 000 35 000 Equipment 90 000 100 000 Fixed deposit (maturing on 31 May 2023) 40 000 40 000 Savings account 13 500 18 500 Bank overdraft 0 4 500 Accrued expenses 16 000 10 500 Accrued income 9 500 12 000 Trade receivables 34 000 41 500 Trading inventory 105 000 115 000 Land and Buildings 950 000 950 000 Mortgage loan: Vida Bank 450 000 380 000 Trade payables 150 000 170 000 REQUIRED: Q.4.1 Calculate the level of working capital (total current assets) as at the financial years ended 28 February 2022 and 28 February 2023. (8) Q.4.2 Calculate the total for current liabilities as at the financial year ending 28 February 2022 and 2023. (6) Q.4.3 Calculate the net working capital as at the two dates for statement of financial position, as well as the current ratio for each year. Comment on the company’s liquidity position and the related risk it poses to potential financiers
The following schedule of assets and liabilities relates to Kona Enterprises. Their year-end is 28 February.
2022
2023
Income received in advance
2 000
1 000
Input VAT
3 000
3 500
Output VAT
6 500
11 500
Prepaid expenses
7 500
5 000
Accumulated
30 000
35 000
Equipment
90 000
100 000
Fixed deposit (maturing on 31 May 2023)
40 000
40 000
Savings account
13 500
18 500
Bank overdraft
0
4 500
Accrued expenses
16 000
10 500
Accrued income
9 500
12 000
Trade receivables
34 000
41 500
Trading inventory
105 000
115 000
Land and Buildings
950 000
950 000
Mortgage loan: Vida Bank
450 000
380 000
Trade payables
150 000
170 000
REQUIRED:
Q.4.1
Calculate the level of
(8)
Q.4.2
Calculate the total for current liabilities as at the financial year ending 28 February 2022 and 2023.
(6)
Q.4.3
Calculate the net working capital as at the two dates for
Round all answers to two decimal places.;
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