The following information is available for Ziyana: Statement of Financial Position at 31st December 2016 2015...

The following information is available for Ziyana:
Statement of Financial Position at 31st December
		2016		2015

Assets
Non-current assets
Cost/valuation		11000000		8000000
Acc Depn		-5600000		-4800000
Carrying amount		5400000		3200000
Current Assets
Inventories	3400000		3800000
Receivables	3800000		2900000
Cash at bank	400000	7600000	100000	6800000
Current liabilities
Trade payables	3700000		3200000
Tax	700000	-4400000	600000	-3800000
Non-current Liablities
10% Loan notes		-3000000		-2000000
		5600000		4200000
Equity and liabilities
Equity
Ordinary share capital		1000000		1000000
Revaluation surplus		1500000		1000000
Retained earnings		3100000		2200000
		5600000		4200000
Summarised statements of profit and loss for the year ended 31st December 2016

Profit from operations			2650000
Finance cost (loan note interest)			-300000
Income tax expense			-700000
Profit for the year			1650000

Notes

(a) During the year non-current assets which had cost £800,000, with a carrying value amount of £350,000, were sold for £500,000 (b) The revaluation surplus arose from the revaluation of some land that was not being depreciated (c) The 2015 income tax liability was settled at the amount provided for at 31st December 2015 (d) The additional loan notes were issued on 1st January 2016. Interest was pad on 30th June and 31st December 2016 (e) Dividends paid during the year amounted to £750,000.

Required
(a) Prepare the company’s statement of cash flows for the year ended 31st December 2016, using indirect method

(b) Calculate the current ratio, quick ratio and gearing ratio for Ziyana for the year ended 31st December 2016 if the following transaction occurred on that date: (i) Customers paid £1,000,000 (ii) A further £1,000,000 10% loan notes were issued (iii) Suppliers were paid £2,000,000

Expert Solution

jeff jeffy answered 2 years ago

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