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SEMINAR QUESTIONS
Question 1:
The premises of the Bayson Manufacturing Company Ltd in downtown Dar es
Salaam were gutted down by fire and most of the vital documents lost. Assume
that you are the head of a team that has been assigned with the task of
reconstructing the firm’s financial statements ready for the inevitable external
audit exercise that is to start at the end of the month. In the course of
performing your duties you have established that the firm had credit sales of TZS
450 million last year and various pieces of information not destroyed by the fire
indicate the following financial ratios relationship:

Total assets turnover 5 times

Cash to total assets 4 percent
Accounts receivable turnover 15 times
Inventory turnover 20 times
Current ratio 2.5 times
Debt to total asset 41 percent

Required:
Prepare a balance sheet for Bayson Manufacturing Company as at December
31st, 2003 using the following format:

Balance sheet as at December 31st, 2003

Assets  TZS  Liabilities and Owners Equity TZS 
Cash ………..  
Accounts Receivable ………… Current debt …………….
Inventory ………… Long-term debt ……………
Total Current Assets …………. Total debt …………
Non-Current Assets(Fixed Assets) …………. Net worth ……………
Total Assets ……….. Total debt and Owners Equity …………
       

Question 2:
Explain the following statement. “While the balance sheet can be thought of as a
snapshot of the firm’s financial position at a point in time, the income statement
reports on operations over a period of time.”

Question 3:
The ABC Ltd has credit sales of TZS 75 million. Given the following ratios, fill in
the balance sheet below:

Total assets turnover 2.5 times

Cash to total assets 2 percent
Accounts receivable turnover 10 times
Inventory turnover 15 times
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Current ratio 2 times

Debt to total assets 45 percent

Balance sheet as at ……..

Assets  TZS  Liabilities and Owners Equity TZS 
Cash ………..  
Accounts Receivable ………… Current debt …………….
Inventory ………… Long-term debt ……………
Total Current Assets …………. Total debt ……………
Non-Current Assets(Fixed Assets) …………. Net worth ……………
Total Assets ……….. Total debt and Owners Equity ……………
       

Question 4:
The financial manager has assigned you with the task of completing the below
balance sheet of Chakubanga Ltd for the period of June 30th, 2002. The sales (all
on credit) are amounted to TZS 112.5 million. Also the following ratios will be
useful:

Total assets turnover 3.75 times

Cash to total assets 3 percent
Accounts receivable turnover 15 times
Inventory turnover 22.5 times
Current ratio 2 times
Debt to total assets 67.5 percent

Balance sheet as at ……..

Assets  TZS  Liabilities and Owners Equity TZS 
Cash ………..  
Accounts Receivable ………… Current debt …………….
Inventory ………… Long-term debt ……………
Total Current Assets …………. Total debt ……………
Non-Current Assets(Fixed Assets) …………. Net worth ……………
Total Assets ……….. Total debt and Owners Equity ……………
       

Question 5:
Construct the current assets section of the balance sheet (i. e. cash, accounts
receivable, Inventory, total current assets) from the following data:

Yearly sales (credit) TZS 42 million

Inventory turnover 7 times
Current liabilities TZS 8 million
Current ratio 2 times
Average collection period 36 days