Accounting Answers

khadi and village industries, being a part of MSME were facing some issues related to sales with big brand apparel industry competitors. the length of production is small and labour intensive whereas the inventory holding period and average collection are huge. Reducing operations is also not a way to deal in this solution.You are appointed as a finance manager in the company to deal with the problem of working capital management. You further faces the problem of compromising between liquidity and profitability. What strategies you would adopt as finance manager to solve this problem

working capital is the excess of current assets over current liabilities but companies like hul,godrej, bharti airtel, hero motocorp, faces the negative working capital in their operating life. thus their current lliabilities exceed their current assests in some years.what is your belief in this regard,can working capital ever be negative or zero for any company? if yes than what shall be the repercussions if a company has(a) dearth of working capital (b)overloades of working capital

working capital is the excess of current assets over current liabilities but companies like hul,godrej, bharti airtel, hero motocorp, faces the negative working capital in their operating life. thus their current lliabilities exceed their current assests in some years.what is your belief in this regard,can working capital ever be negative or zero for any company? if yes than what shall be the repercussions if a company has(a) dearth of working capital (b)overloades of working capital

One column total of a special journal is posted at month-end to only two general ledger accounts. One of these two accounts is Accounts Receivable. What is the name of this special journal? What is the other general ledger account to which that same month-end total is posted?

Natural Company plans to sell 40,000 boxes of teabags during January. The company has 6,000 boxes on hand on January 1 and requires 15% of the next months' sales on hand at the end of the month. Budgeted sales for the month of February and March, are 35,000 and 45,000 boxes, respectively. Budgeted production for January would be:
a) 40,000 boxes
b) 35,000 boxes
c) 39,250 boxes
d) 40,750 boxes

A. The following is a macroeconomic model of Utopia. The Utopian currency is the Utopian dollar (#).
Y = C + I + G + NX (National Income Identity)
C = C0 + cYd
(Consumption Function)
I = I0 (Investment Function)
G = G0 (Government Expenditure Function)
X = 20 (Export Expenditure)
M = 35 (Import Expenditure)
Y
d
= Y – T (Disposable Income)
Required:
i. Compute the value of the balance of payments (BOP). (1 mark)
ii. State the BOP position. (1 mark)
iii. Explain the BOP position you found in (ii) (1 mark)
iv. State and explain one (1) strategy for the Utopian government to improve the BOP position. (2 marks)

What are the advantages of privatising a public company (public broadcaster)?

Computer Garage sells iPad for cash sh at 80,0000 inclusive of one year unlimited International warranty of any manufacturers defects. The management is concerned about the rising cost of warranty and have recommended provisions to be created with effect from 2014.Estimates from the sale department indicates the following.
Defect type minor ,major and replacement.
Percentage of units sold 2% ,0.5% ,0.1% .
Estimated cost per unit 2300, 6000 and 18600 .
Summary of cashbook and warranty contains the following
Year ended 31st March 2014 ,31st March 2015 ,31 st March 2016.
Warranties paid (ksh) 654,000 ,450,900, 346 200.
Warranty contracts in force ( units) 15,000 ,24,800 ,18,400 .
Required.
Compute the warranty provisions required at each year.
Prepare the provisions for product warranty account.

Table 1. Return on Assets

Asset GBP

Budgeted profits for the year 10,575,000

Asset base at the start of the year 58,925,000

Budgeted asset base at the end of the year 69,500,000

Average asset base 64,212,500

ROA (using average of opening and closing assets) 16.5%


Calculate the budgeted ROA for sales outputs of 4,200,000 and 4,500,000 units. Assume that any additional profits over the original budget will be invested in the business and therefore increase the budgeted closing asset base.

Asset GBP

Budgeted profits for the year 10,575,000

Asset base at the start of the year 58,925,000

Budgeted asset base at the end of the year 69,500,000

Average asset base 64,212,500

ROA (average of opening and closing assets) 16.5%

Calculate the budgeted ROA for sales outputs of 4,200,000 and 4,500,000 units.