Professional Documents
Culture Documents
1. In March 2021, Jay started a company. The company had the following transactions in February:
(12 Marks)
a. Invested 14000 cash in companies share capital.
b. Bought office equipment for cash, 6000.
c. Provided services for cash, 9000.
d. Bought office supplies on credit, 1500.
e. Billed customers for services, 7500.
f. Used office supplies, 800.
g. Collected payments for customer billed in (e), 6800.
h. Paid for office supplies bought in (d) on account, 1200.
i. Billed customers for services, 2100.
j. Paid Jay’s salary, 6000.
k. Paid office rent, 1000.
l. Issued shares to a friend for 12000.
m. Paid a dividend, 1200.
Analyze the effect of the transactions in March 2021 on the related assets, liability, and equity
items. Prepare company’s March balance sheet, statement of profit and loss.
2. Discuss the significance of cash flow statement in managerial decision making (3 marks) and
comment your opinion on the following statement ‘Negative cash flow isn’t always a bad thing
and positive cash flow isn’t always a good thing’. (3 marks) (6 Marks)
3. List out five important qualitative contents you will investigate in the annual report and their
implication to stakeholders. (7 marks)