2017 SEMESTER 2 FINANCIAL ACCOUNTING 1B

ASSIGNMENT LETTER
Programme(s)
BBA, BAcc., Dip. Acc., BEd., Advance Dip in Edu.

2017

SEMESTER (2)

[FINANCIAL ACCOUNTING 1B]
[AFE3692]
DUE DATES
Assignment 1
Assignment 2
Assignments
Resubmissions
Vacation School

28 July 2017
01 September 2017
29 September 2017
29 August- 01 September 2017

Page 1 of 16

Only Semester 2 modules
Only Semester 2 modules
All assignments of Semester 2
modules
All CODeL Programmes

2017

Assignments

[FINANCIAL ACCOUNTING 1B – AFE3692]
Dear Student,
Welcome to the University of Namibia and to the Centre for Open, Distance and e-Learning (CODeL) in particular.
We hope your studies will be rewarded with success. We kindly advise that you get all the relevant information and
booklets available for distance students from your nearest UNAM centre (including the 2017 CODeL Letter to
Distance Mode Students and the Online Assignment Submission Guide on Moodle). These documents will
provide advice on how to approach your studies and will guide you through your study materials as well as providing

useful administrative information in submitting assignments.
Study materials
Your study guide is essentially your “teacher/lecturer”. However, in addition you are required to visit the library to
consult prescribed books and recommended readings that are indicated in the study guide. You are also responsible
to purchase any prescribed textbooks required for your respective courses/modules. Furthermore, you are strongly
advised to follow the guidelines in the Online Assignment Submission Guide on Moodle.
Submission of assignments
It is very important to complete and submit a clean, clear and well-argued assignment for marking. Make sure that
you have answered the questions correctly. It is the responsibility of you as a student to make sure that every page of
the completed assignment is correctly numbered before submitting your assignment. From 2017, ALL assignments
would be submitted through the Moodle Learning Management System. This is an online platform where you will
access all your modules and related information such as course outline, course notes and other learning materials
that your tutor may choose to share, as well as communicate with your tutors and with fellow students through forum
discussions or other available communication tools. Moodle is accessible here: http://elearning.unam.edu.na (please
refer to the 2017 CODeL Letter to Distance Mode Students). You should complete and submit all assignments on
or before the given due date in the assignment letter if you wish to be admitted to the next examination. No
hardcopies are allowed, all assignment are to be uploaded through Moodle.
Assignments should be submitted in PDF and Microsoft Word formats – only.
Make sure that you submit one assignment as one file/document. Do not create and upload several folders;
do not zip the documents. Have 1 one document/file for 1 (ONE) entire assignment.

 Assignments for modules with formulas can be handwritten, scanned in one document and uploaded on
Moodle accordingly.
 Make sure you submit a document that is readable and virus free.
 Make sure you upload the right file with the relevant assignment content.
 After submitting your assignment on Moodle do verify on the file you uploaded. Always try to submit your
assignment few days before the due date, this will allow you to double-check all the needy-greedy.
NO LATE SUBMISSIONS WILL BE TOLERATED. NO LATE submission due to not adhering to the above
advises or guidance WILL BE ACCEPTED.




Due Dates
All assignment due dates for 2017 are published on the cover of this letter. With the shift from manual to online
assignment submission, due dates would be automated. This means that you would be required to submit your
assignments on the due date set on your assignment before 11h59 PM. After the date has passed (i.e. 12h00AM the
next day) the assignment submission will be disabled and you would no longer be able to submit your
assignment.
Due to challenges with Internet connectivity and speed, large files may take too long to upload, which is a big risk if
you submit a few minutes to the deadline. You are therefore strongly advised not to wait until the last minute to

submit your assignments so that you can report potential challenges and avoid disappointments. If you were used to
submitting late assignments through the portal, you are cordially cautioned that this would no longer be possible with
automated due dates on Moodle.
Timely submission of all assignments on or before the given due date is crucial for the timely calculation of your CA
mark and determining admission to exams. Take note that assignments should never be submitted directly to
individual tutors or any other staff members of the University of Namibia.

Page 2 of 16

Plagiarism Control
It has been observed that some students copy information from the Internet and paste into their assignments without
acknowledging the sources of the information. This is called plagiarism. A copy of the Policy on Plagiarism and
Cheating has been provided to you through the UNAM website. Please note that plagiarism and copying and pasting
would not be tolerated and shall result in your assignments declared null and void. All assignments submitted through
Moodle would be checked for plagiarism using plagiarism detection software. You will receive a report on the overall
overlapping of your assignment with the sources you have used. You are therefore strongly urged to acknowledge
EVERY source that you use for your assignment by using the appropriate referencing style prescribed by your
lecturers (APA Referencing guides are available freely online). Find one here: http://www.uofa.edu/docs/apadocumentation.pdf
Any assignment found with high overlapping scores or with evidence of clear attempts to cheat such as submitting an
assignment that is not your own would result in serious consequences (please refer to the Policy on Plagiarism and

Cheating provided).
LATE SUBMISSION OF ASSIGNMENTS or WRITING OF TESTS
Late assignment will not be accepted nor marked. If there is a reason why you cannot meet the due date,
please consider cancelling the module within the cancellation deadlines or contact Student Support
Coordinator for advice.

Vacation schools
Attending vacation school is COMPULSORY and the vacation school timetable will be made available at your nearest
UNAM centre and through the UNAM portal.
My UNAM Portal /Moodle
We recommend that you regularly (at least thrice a week) access My UNAM Portal (for administrative and academic
information) and Moodle (for learning and assessment information) on the UNAM website for further information at
the following URLs: http://my.unam.edu.na and http://elearning.unam.edu.na
Closing remarks
If you study conscientiously, your efforts will be rewarded. Should you need any assistance or clarification on the
module contents, you can reach the relevant staff members at the contact details as given below:

Tutor:

Hilja Haufiku

061-2064803

hhaufiku@unam.na

Charlene Kaereho

061-2063729

ckaereho@unam.na

Josua Lukas (Matati)

065-2232267

ljosua@unam.na

For Subject content related matters only

Student Support

Lecturers/Coordinators:
Distance Education Officer:

lxoagus@unam.na
Lizzy Xoagus

061-2063608

– not ixoagus but l (L) for
Lizzy

Moyyo Jussy

061-2063715

jmoyyo@unam.na

Kooper G.

061-2063249

gkooper@unam.na

Assignment marks

Examination Officer:
Examination Matters

eLearning Coordinator:

NOTE: For additional information consult the CODeL Prospectus and UNAM General Information and Regulations
Prospectus.

Page 3 of 16

STUDENTS – KINDLY NOTE: REFER TO RULES AND REGULATIONS in this letter BEFORE UPLOADING
YOUR ASSIGNMENT ON MOODLE.
Resubmission is applicable to students who submitted their
assignments and score a mark of 0-39%. When you obtained 40% and above in your assignment, you don’t
qualify to resubmit your assignment.

afeAssignment 01
QUESTION 1

(15 Marks:

27 Minutes)

1.1

The aim of financial statements is to provide information about the:
A.
Business finances
B.
Financial position, performance and cash flow information of the business
C.
Economic resources of the business

1.2

The financial position of a company is shown in the:
A.
Statement of financial position
B.
Statement of changes in equity
C.
Statement of profit or loss

1.3

The financial performance of a company is shown in the:
A.
Statement of financial position
B.
Statement of changes in equity
C.
Statement of profit or loss

1.4

Financial statements are based on two underlying assumptions, namely:
A.
The accrual basis and the going concern assumption
B.
The cost and benefit basis
C.
The financial statement and analysis basis

1.5

Information is material if:
A.
Its omission or misstatement could influence the economic decisions of
management.
B.
Its omission or misstatement could influence the economic decisions of users of
the financial statements.
C.
Its omission or misstatement does not influence the economic decisions of the
users of the financial statements.

1.6

An asset can be defined as:
A.
A resource, managed by the entity, as a result of a past event, the purchase of
which is expected to result in future benefits flowing into the entity.
B.
A resource, managed by the entity, as a result of a future event, the purchase of
which is expected to result in future benefits flowing into the entity.
C.
A resource, controlled by the entity, as a result of a past event, the purchase of
which is expected to result in future benefits flowing into the entity.

1.7

A liability is considered to be a:
A.
Past obligation
B.
Present obligation
C.
Future obligation

1.8

Income is recognised in the following statement:
A.
Statement of changes in equity
Page 4 of 16

1.9

B.
Statement of financial position
C.
Statement of profit or loss & other comprehensive income
Expenses result in the statement of profit or loss profit:
A.
Increasing
B.
Decreasing
C.
Remaining the same

1.10

Measuring elements of the financial statements can be done using:
A.
Historical cost, current cost, realisable value and present value
B.
A calculator
C.
Historical cost, current cost, realisable cost and cost-benefit analysis.

2.

Match Column A to Column B:
Column A
2.1 The framework
Qualitative characteristic of
2.2 financial statements
2.3 Faithful representation
Balance between qualitative
2.4 characteristics
2.5 Element of the financial statements

QUESTION 2

Column B
Relevance, materiality and faithful
A representation
It is necessary to find the trade-off
between various qualitative
B characteristics.
C Assets, equity and liabilities
To be reliable, information must faithfully
D represent the transactions.
States that financial statements should
be based on two underlying
E assumptions.

(15 Marks:
Page 5 of 16

27Minutes)

A recent graduate, Bob, struggled to find work as an accountant. While at home one day, he
noticed large trucks with full-grown trees driving past. They were going to a new housing
9development in his street, where landscapers were developing the gardens and planting
mature trees as instant landscape features.
Because Bob had grown up in a farming area and worked on farms in his vacations, he had
some knowledge about growing trees and decided that he would do some research and find a
gap in the market for something similar.
He and his friend Neo, who had some inherited money, started a small business selling fullgrown palm trees. The palm trees were in high demand from municipalities all over South Africa.
While visiting his university lecturer. Bob asked her advice as to what would be the best way to
register the business so that it would benefit both himself and Neo. (Bob had no start-up capital
of his own and the two friend would have to borrow more money to get the business going). As
he left the university area, he noticed a vacant piece of land that had previously been used as a
fruit farm. It looked fertile and suitable for growing young palm trees and also storing sourced
(purchased) older palm trees.
Once Neo had agreed and become involved in this business idea, the two friends decided to
[put in an offer to purchase the property on 1 July after the registration of their business. A
purchase price of R900 000 was paid on 31 July 20x0
The property was then registered in the deeds office on 15 August 20x0 in the name of Breezy
Palms Enterprises. The property was now theirs to do with as they pleased.
The purchased price was paid from Noes capital of R30 000 and Loan (from One Love Bank).
This agreement was entered into on 31 July 20x0 at an interest rate of 10% payable monthly
with the capital portion of the loan being payable in monthly instalments over a period of 10
years.
On 1 September, they brought in another company, Trees Planters CC, who would supply and
plant the trees that would generate a revenue over many years. Trees Planters charged them
R10 000 for every hectare of trees planted.
Bob and Neo then agreed to an additional maintenance contract with Trees Planters CC,
stipulating that they would maintain and prune the young trees to ensure that they grew upright
over the next 10 years , for an annual fee of R15 000.
During the current year, Breezy Palms Enterprise incurred R150 000 on the purchase and
planting of the trees was well as R15 000 on the pruning and maintenance of the trees.
Bob and Neo took care of the sourcing of mature trees themselves, which cost them R3 000 a
month in adverting, labour and transport.
Bob and Neo employed an expert to do a profitability study. The report from the expert revealed
that they could expect a return on investment of 23% over the period of 10 years.

Page 6 of 16

The accountants showed every cost incurred as an expense in the current year. The financial
director feels that a part of the transactions above may be stated as an asset.

You are required to:
Provide a well- reasoned argument with reference to the accounting frameworks as to whether
the treatment of the above transactions was appropriate. Your answer should distinguish
between these transactions
1.
2.
3.
4.

The purchase of land
Loan from One Love Bank
Interest on Loan
Planting, pruning and maintenance of young trees.

QUESTION 3

(20 Marks:

Page 7 of 16

36 Minutes)

Onkoshi Ltd is a public company listed on the Namibian Stock Exchange (NSX). The company
applies International Financial Reporting Standards (IFRS) to prepare its financial statements
and has elected to present its statement of profit or loss and other comprehensive income
according to the function of expenses method.
The company’s financial accountant prepared the following statement of profit or loss and other
comprehensive income for the year ended 31 December 2016:
Statement of profit or loss and other comprehensive income for the year 2016
Revenue
Cost of sales
Gross profit
Depreciation
Salaries and wages
Telephone expenses
Dividend declared
Surplus on revaluation of property, plant and equipment
Other expenses
Purchase of property, plant and equipment
Issue of ordinary shares at par
Profit for the year

12 000 000
(5 000 000)
8 000 000
(15 000 000)
(6 500 000)
(75 000)
(125 000)
225 000
(8 000 000)
(4 250 000)
1 000 000
(12 150 000)

Required:
2.1

Briefly explain to the financial accountant why dividends declared of N$ 125 000 should
not be presented in the statement of profit or loss and other comprehensive income as
an expense. Your answer should refer to the relevant definition in the conceptual
framework.

2.2

Provide a critical analysis of the above-mentioned statement of profit or loss and other
comprehensive income in terms of IAS 1 and the conceptual framework.

QUESTION 4

(50 Marks:
Page 8 of 16

90 Minutes)

You are the recently appointed accountant of Okaukuejo Ltd. The following list of balances as at
31 December 2015 and additional information is presented to you:
Account details

Amount in (N$)

Issued share capital:
Ordinary share capital ( 1 500 000 shares of N$ 1 each)
12% Declared Preference share capital (200 000 shares of N$ 2.5 each)
Retained earnings (01/01/2015)
General reserve
Share premium
2% Etosha Mortgage bond
Trade and other payables
Land and buildings at cost
Delivery vehicles at cost
Office furniture at cost
Computer equipment at cost
Accumulated depreciation:
Delivery vehicles
Office furniture
Computer equipment
Inventory (01/01/2015)
Trade and other receivables
Cash and cash equivalents
Sales
Rental income
Purchases
Return inwards
Return outwards
Freight on purchases
Freight on sales*
Sales commission*
Salaries and wages
Fuel and maintenance expenses*
Stationery
Telephone expenses
Water and electricity
Credit losses
Provision for credit losses (01/02/2015)
*Sales distribution expenses

The company’s authorized share capital consists of:



2 000 000 ordinary shares of N$ 1 each
500 000 12% preference shares of no par value

The following additional information should be taken into consideration:
1. The inventories amounted to N$ 55 000 on 31 December 2015.
2. Carriage on purchases of N$ 1 525 is not yet paid.

Page 9 of 16

1 500 000
500 000
965 235
70 000
125 000
1 575 000
75 215
1 750 000
550 275
235 132
150 000
125 135
85 000
55 000
20 000
105 000
185 000
1 525 000
60 000
650 000
10 000
15 000
2 500
3 500
15 000
350 000
1 750
15 000
6 752
18 500
1 321
5 100

3. Part of the administration building was rented out from 01 August 2015 for N$ 15 000
per month.
4. On 01 July 2015, a delivery van that was purchased on 31 July 2013 for N$ 35 000 and
with an accumulated depreciation of N$ 12 000 on 01 January 2015, was sold for N$ 16
500 cash.
5. Depreciation is provided for as follows:
 No depreciation is provided for on land and buildings
 Office furniture- 15% per annum on cost
 Delivery vehicles- 20% per annum on diminishing balance method (used for the
distribution of sales only)*
 Computer equipment- 25% on cost
6. Water and electricity for the month of December amounted to N$ 1 026. This account
was only received on 05 January 2016 and is not recognized yet.
7. The loan was received on 01 January 2014 and is secured by land and buildings, the
interest rate is 2% per year on the outstanding balance and the loan is repayable in
annual instalments of N$ 87 500 over 20 years every 31 October. Provision should be
created for interest on loan for 31 December 2015.
8. The telephone expense of N$ 702 is still outstanding and must be paid.
9. The allowance for credit losses must be adjusted to 5% of outstanding debtors.
10. The company purchased land and buildings (Erf 151, Klein Windhoek) on 01 January
2014 for N$ 1 750 000 by taking out a loan from Etosha bank. The company’s
accounting policy states that land and buildings should be revalued. Mr Namutoni, a
sworn appraiser, revalued the land and buildings on 31 December at a fair value of
N$ 2 100 000. No entries pertaining to the revaluation have been recorded.
11. The shareholders approved a final dividend of 25c per share on 31 December 2015.
12. Assume a tax rate of 28%.

REQUIRED:
Prepare the following financial statements for Okaukuejo Ltd:
1. Statement of profit or loss and other comprehensive income for the year ended 31
December 2015 according to the function of expenses method to comply with the
requirements of IFRS and Companies Act 71 of 2008.
2. Statement of changes in equity for the year ended 31 December 2015 to comply with the
requirements of IFRS and Companies Act 71 of 2008 .
3. Extracted statement of financial position as at 31 December 2015 to comply with the
requirements of IFRS and Companies Act 71 of 2008 with the following notes:
3.1
Basis of presentation
3.2
Statement of significant accounting policies
3.3
Property, plant and equipment
3.4
Equity

Page 10 of 16

Assignment 02

QUESTION 1

(26 Marks:

47 Minutes)

Company A buys and sells brand jeans from a small factory shop in Keetmanshoop. The
company started trading on 01 January 2017.
The following transactions took place in January:
1.
2.
3.
4.

Obtained a loan of N$ 50 000 from Namibia Financing Bank to fund the initial operations.
Purchased a delivery van for N$ 20 000, paid with cash from the bank loan.
Purchased 200 pairs of jeans from various suppliers on credit for N$ 150 per pair.
Sold 200 pairs of jeans for N$ 500 per pair. Half of these jeans were sold for cash, the
other half were sold on credit.
5. Paid employees salaries of N$ 4 000 by cheque.
6. Paid the monthly factory-shop rent of N$ 5 000 in cash to the landlord.
7. Interest of N$ 500 accrued on the outstanding loan balance. This interest is payable on
the first day of the next month.
8. Depreciation on the delivery vehicle amounted to N$ 600 for the month.
9. Sent a cheque to suppliers in payment of 150 of the 200 pairs of jeans purchased during
the month.
10. Received cash payments for 60 pairs of jeans purchased by debtors during the month.
The remainder are expected to pay in February.

REQUIRED:
1.

(a)

Prepare the statement of profit or loss and other comprehensive income for the
month of January. (4 Marks)

(b)

Calculate Company A’s net cash received in January in respect of operating
activities. (3 Marks)

(c )

Calculate the differences between net cash received in respect of operating
activities and net profit. (3 Marks)

(d)

Provide reasons for the difference between net cash received in respect of
operating activities and net profit. (4 Marks)

2.

Prepare the bank account in the general ledger of Company A for the month of January.
(6 Marks)

3.

Prepare the statement of cash flows for the month of January using the direct method.
(6 Marks)

Page 11 of 16

QUESTION 2

(30 Marks:

54 Minutes)

The following abridged information is available:
Waterberg LTD
Statement of financial position as at as at 31
December 2012
ASSETS
Non-current assets
Property plant and equipment
Investments in associates (non-cash movement)
Current assets
Inventories
Trade receivables

546 200
453 200
93 000
49 800
16 000
33 800

457 700
405 200
52 500
34 700
15 800
18 900

Total assets

596 000

492 400

EQUITY AND LIABILITIES
Total equity
Share capital
Share premium
Revaluation surplus
Retained earnings
Total liabilities
Non-current liabilities
Long-term borrowings
Current liabilities
Trade and other payables
Current tax payable
Shareholders for dividends
Current portion of long-term borrowings
Bank overdraft

383 500
20 000
9 000
60 000
307 500
213 000
177 000
177 000
36 000
7 500
7 000
4 000
5 000
12 500

239 500
10 000
3 000
46 500
180 000
252 900
182 000
182 000
70 900
17 900
12 000
3 000
3 000
35 000

TOTAL EQUITY AND LIABILITIES

596 000

492 400

Waterberg LTD
Statement of profit or loss and other comprehensive
income for the year ended 31 December 2012
Revenue
Cost of sales
Gross profit
Other expenses
Share of profit of associates
Dividends received
Retained equity profit of associates
Page 12 of 16

2012

2011

N$

N$

N$
550 000
(300 000)
250 000
(99 000)
54 500
14 000
40 500

205 500
(57 450)
148 050

Profit before tax
Income tax expense
Profit for the year

Waterberg LTD
Statement of changes in equity for the year ended 31 December 2012
Share capital Share
premium

Balance at 31 December 2011
Profit for the period
Dividends
Issue of share capital
Balance at 31 December 2012

10 000
10 000
20 000

3 000
6 000
9 000

Revaluation
surplus

N$
46 500
46 500

Retained
earnings

180 000
148 050
(20 550)
—
307 500

Total equity

239 500
148 050
(20 550)
16 000
383 000

Additional information
1. Profit before tax is stated after taking the following into account:
Finance costs
Depreciation on machinery and equipment
Profit on sale of machinery and equipment

N$
18 000
58 000
1 500

2. During the year, machinery and equipment was purchased for N$12 500 to replace
machinery and equipment with a carrying amount of N$2 500, which was sold.
3. Property, plant in equipment consisted of the following:
2012
2011
N$
N$
Land at cost
295 500 296 500
Machinery and equipment at carrying amount
156 700 108 700
REQUIRED
Prepare the cash flow statement, using the direct method, of Waterberg Ltd for the year ended
31 December 2012 in accordance with International Financial Reporting Standards and
Schedule 4 of the Companies Act, 1973 (as amended) with the following notes:
1.
2.
3.
4.

Basis of presentation
Statement of significant accounting policies summary
Cash and cash equivalent
Reconciliation of profit before tax with the cash generated from operations

Page 13 of 16

QUESTION 3

(10 Marks:

18 Minutes)

The following information relates to Pretty Sam at 30 June:
20.2
N$
160 000
20 000
11 000
160 000
11 000
2 000
14 000
15 000
24 000
11 610
2 000

Land and buildings at cost price
Vehicles at cost price
Accumulated depreciation: Vehicles
Capital
Investment
Cash and bank
Account receivable
Inventory
Long-term loan
Bank overdraft
Profit of the year
Accrued interest on loan

20.1
N$
149 000
9 000
7 000
157 000
10 000
18 000
14 000
20 000
2 000
-

Additional information
1
2
3

Interest received on the investment amounted to N$ 1 000.
Interest at 10% per annum is payable on the opening balance of the long-term loan.
Taxation paid amounted to N$ 2 610

REQUIRED
Prepare the cash flow statement for the year ended 30 June 20.2. (Make use of the indirect
method.)

Page 14 of 16

QUESTION 4

(36 Marks:

65 Minutes)

The following are extracts from the statements of profit or loss and other comprehensive income
and the statements of financial position of Turbo Ltd in respect of the financial years 2013 and
2014:
EXTRACT FROM STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME
N$
N$
2014
2013
Sales
1 032 000
784 000
Cost of goods sold
682 800
470 000
Interest expense
16 000
20 000
Profit before tax (after interest)
234 000
154 400
Profit after tax
163 800
108 000
EXTRACT FROM STATEMENT OF FINANCIAL POSITION
N$
2014
Ordinary share capital
400 000
12% Preference share capital
250 000
Retained earnings340 000
Long term debt (10% p.a.)
160 000
Trade payable
171 800
Inventory
160 000
Trade receivable
155 040
Cash and cash equivalents
35 200
Non-current assets at carrying value
905 400

N$
2013
120 000
250 000
220 000
200 000
96 000
200 000
133 760
30 400
636 000

ADDITIONAL INFORMATION:
1. 70% of sales are on credit
2. All purchases are on credit.
3. Authorised ordinary shares- 1 000 000 shares of N$ 2 each
4. Authorised preference shares- 500 000 of N$ 3 each
5. The market price of the ordinary shares at the end of the financial year of 2014 is
N$ 7.50
YOU ARE REQUIRED TO:
1. Calculate the following ratios in respect of the year 2013 and 2014 and critically evaluate
the movements:
1.1 Profit margin (2)
1.2 Gross profit percentage (2)
1.3 Return on equity (2)
Page 15 of 16

1.4 Return on assets (2)
1.5 Financial leverage (2)
1.6 Current ratio (2)
1.7 Inventory holding period (2) (Inventory for 2012- N$ 180 000)
1.8 Trade payables payment period (2) (Trade payables for 2012- N$ 105 000)
1.9 Trade receivables collection period (2) (Trade debtors for 2012- N$ 147 500)
1.10
Debt equity ratio (2)
1.11
Debt ratio (2)
1.12
Times interest earned ratio (2)
1.13
Earnings per share (2)
1.14
Price earnings ratio (2)
2. What is the length of the working capital cycle of Turbo Ltd for X4? (1)
3. The Second National Bank of Namibia is attempting to evaluate Turbo Ltd, a loan
applicant, for a short-term loan. Consider the information provided and your calculations
in (1) above and prepare a report to The Second National Bank loan officer, Mrs Lorna
Simms, outlining those factors which might be useful to her in making her decision
before granting the loan to Turbo Ltd. (3)
4. State what limitations you see in your analysis and what additional information might be
helpful to the loan officer. (4)

Page 16 of 16