Ombese owns and manages a small manufacturing business. The following balances have been extracted from her...

 

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Ombese owns and manages a small manufacturing business. The following balances have been extracted from her books of accounts at 31 December 2021. Dr. Purchase of Raw materials Fuel and Light Administration salaries Factory wages Carriage outwards Rent and business rates Sales Return inwards General office expenses Repairs to plant and machinery Inventory at 1 January 2021: Raw materials Work-in-Progress Finished goods Sundry accounts payable Capital account Freehold premises Plant and Machinery Accounts receivable Accumulated provision for depreciation on Plant and Machinery Cost in Hand Additional information: 1. Inventory in hand at 31 December 2021: Raw materials Sh 25,000 Work in progress Sh 11,000 Finished goods Sh 26,000 2 ( 280,000 21,000 17,000 59,000 4,000 21,000 7,000 9,000 9,000 r 21,000 14,000 23,000 410,000 80,000 20,000 11,000 984,000 Cr. ii. Statement of financial position as at 31 December 2021. 482,000 37,000 457,000 2. Depreciation of 10% on Plant and Machinery using the Straight line method 3. 80% of fuel and light and 75% of rent and rates to be charged to manufacturing 4. Allowance for doubtful debts: 5% of sundry accounts receivable 5. Sh 4,000 outstanding for Fuel and Light 6. Rent and business rates paid in Advanced sh 5,000 7. Market value of finished goods sh 382,000 Required: 8,000 i. Manufacturing account and Statement of profit or loss for the year ending 31 December 2021 984,000 QUL a) Financial Ratios are crucial tools for analyzing financial statements. However, they have some limitations. Highlight the five key limitations of financial ratios Ombese owns and manages a small manufacturing business. The following balances have been extracted from her books of accounts at 31 December 2021. Dr. Purchase of Raw materials Fuel and Light Administration salaries Factory wages Carriage outwards Rent and business rates Sales Return inwards General office expenses Repairs to plant and machinery Inventory at 1 January 2021: Raw materials Work-in-Progress Finished goods Sundry accounts payable Capital account Freehold premises Plant and Machinery Accounts receivable Accumulated provision for depreciation on Plant and Machinery Cost in Hand Additional information: 1. Inventory in hand at 31 December 2021: Raw materials Sh 25,000 Work in progress Sh 11,000 Finished goods Sh 26,000 2 ( 280,000 21,000 17,000 59,000 4,000 21,000 7,000 9,000 9,000 r 21,000 14,000 23,000 410,000 80,000 20,000 11,000 984,000 Cr. ii. Statement of financial position as at 31 December 2021. 482,000 37,000 457,000 2. Depreciation of 10% on Plant and Machinery using the Straight line method 3. 80% of fuel and light and 75% of rent and rates to be charged to manufacturing 4. Allowance for doubtful debts: 5% of sundry accounts receivable 5. Sh 4,000 outstanding for Fuel and Light 6. Rent and business rates paid in Advanced sh 5,000 7. Market value of finished goods sh 382,000 Required: 8,000 i. Manufacturing account and Statement of profit or loss for the year ending 31 December 2021 984,000 QUL a) Financial Ratios are crucial tools for analyzing financial statements. However, they have some limitations. Highlight the five key limitations of financial ratios