Homework Answers
| a] | Current assets/Current liabilities = 8400/4000 = | 2.10 |
| The universal standard ratio is 2. Hence, the ratio is satisfactory. | ||
| b] | Gross profit % = 5000/21000 = | 23.81% |
| c] | Average mark % on purchases = 21000/16000-1 = | 31.25% |
| d] | Capital yield to the owner = 2400/30000 = | 8.00% |
| e] | No. Since the return from the building society investment is less | |
| that the capital yield, the investor would not do better by | ||
| investing in the building society. |
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The following details appears in the final accounts of a sole trader's business. 8 400 Current...
The following details appeared in the final accounts of a sole trader's business
Current assetsR8 400Current liabilities 4 000Gross profit 5 000Net profit 2 400Purchases 16 000Sales 21 000Capital 30 000The opening and closing stocks, being identical figures, are not shown.
Style Limited (Adapted from Dyson p 245, 10.9) | 2018 £ 000 000 2017 £ 000...
Style Limited (Adapted from Dyson p 245, 10.9) | 2018 £ 000 000 2017 £ 000 2017 £000 £000 000 000 1,900 1,500 420 685 Income Statement Sales (all credit) Cost of Goods Sold Opening stock Purchases (all credit) 80 100 2018 £ 000 Statement of Financial Position Fixed Assets (NBV) Current Assets Inventory 250 Trade debtors 850 Bank 1,100 Less : Current Liabilities Bank overdraft Trade creditors 995 100 1,400 1,500 200 375 1,075 Less closing stock 100 Gross...
Comment on: a) the company's performance for the year to 30 June 2018 b) the limitations...
Comment on:
a) the company's performance for the year to 30 June 2018
b) the limitations of ratio analysis
Style Limited (Adapted from Dyson p 245, 10.9) 2018 £ 000 2017 £ 000 2017 000 000 000 000 000 1,900 1,500 420 685 Income Statement Sales (all credit) Cost of Goods Sold Opening stock Purchases (all credit) 80 2018 £ 000 Statement of Financial Position Fixed Assets (NBV) Current Assets Inventory 250 Trade debtors Bank 1,100 Less: Current Liabilities Bank...
The balance sheet of a sole trader revealed the following position. Fixed Assets R R Land...
The balance sheet of a sole trader revealed the following position. Fixed Assets R R Land and buildings Equipment at cost less depreciation 9 170 15 570 Goodwill at cost less amounts written off 10 250 34 990 Investment in shares at cost 2 200 Current assets Trading stock Sundry debtors less bad debt written off Cash at bank 45 840 19 350 10 920 76 110 13 300 = A Less: current liabilities Sundry creditors and Accruals 77 600...
Indicate what is meant by the following ratio calculations. 1. Liquidity Ratios Current Ratio = Current...
Indicate what is meant by the following ratio calculations. 1. Liquidity Ratios Current Ratio = Current Assets Current Liabilities = 515800 626900 = 0.82 : 1 Quick Ratio = Quick Assets Current Liabilities = 42700 + 205800 626900 = 0.40 Cash Ratio = Cash & Cash Equivalents Current Liabilities = 42700 626900 = 0.0681 : 1 2. Turnover / Activity Ratios Inventory Turnover = COGS Average Inventories...
You are to study the following financial statements for two furniture stores and then answer the...
You are to study the following financial statements for two furniture stores and then answer the question which follow. Financial Statements A B $’000 $’000 $’000 $’000 Income Statements Sales 2,500 1,600 Opening Inventory 190 110 Add Purchases 2,100 1,220 Less Closing Inventory (220) (2,070) (160) (1,170) Gross profit 430 430 Less; Directors remuneration 70 120 Wages and salaries 180 130 Other expenses 14 (264) 10 (260) Net profit 166 170 Statement of financial position...
Q1. You are to study the following financial statements for two furniture stores and then answer...
Q1. You are to study the following financial statements for two furniture stores and then answer the question which follow. Financial Statements A B $’000 $’000 $’000 $’000 Income Statements Sales 2,500 1,600 Opening Inventory 190 110 Add Purchases 2,100 1,220 Less Closing Inventory (220) (2,070) (160) (1,170) Gross profit 430 430 Less; Directors remuneration 70 120 Wages and salaries 180 130 Other expenses 14 (264) 10 (260) Net profit 166 170 Statement of financial...
Thelma Blinkley is the sole proprietor of the "Retro Lounge' a business that sells retro banana...
Thelma Blinkley is the sole proprietor of the "Retro Lounge' a business that sells retro banana lounges. Thelma is a good friend of both Ms Blake and Mr Jones and they frequently refer clients to each other business. They have been so impressed with the quality of accounting work done for them by Michell & Co Accounting Specialists Pty Ltd and in particular with your work that they have suggested that Thelma come to see you for assistance in preparing...
The following figures relate to a hospitality business. 35% of all sales and 80% of all...
The following figures relate to a hospitality business. 35% of all sales and 80% of all purchases are on credit. Using accepted ratios and percentages comment on the gross and net profits, the current ratio and the acid test, debtors and creditors payment periods, stock turnover, and return on capital employed. Trading and profit and loss account for year ending December 31st 2014 £000's 2014 60,000 24,000 36,000 15.000 21,000 9.750 11,250 Sales Cost of sales Gross profit Wages Net...
Sales (all on credit) Cost of goods sold Average inventory Average accounts receivable Interest expense Income...
Sales (all on credit) Cost of goods sold Average inventory Average accounts receivable Interest expense Income tax expense Net income Average investment in assets Average stockholders' equity $2,750, 000 1,781,00 375,000 282,000 45,000 84,000 159,000 1,800,000 895,000 Required a. From the information given: 1. Compute the inventory turnover. (Round your answer to 2 decimal places.) 2. Compute the accounts receivable turnover. (Round your answer to 2 decimal places 3. Compute the total operating expenses. 4 Compute the gross profit percentage....
Style Limited (Adapted from Dyson p 245, 10.9) | 2018 £ 000 000 2017 £ 000 2017 £000 £000 000 000 1,900 1,500 420 685 Income Statement Sales (all credit) Cost of Goods Sold Opening stock Purchases (all credit) 80 100 2018 £ 000 Statement of Financial Position Fixed Assets (NBV) Current Assets Inventory 250 Trade debtors 850 Bank 1,100 Less : Current Liabilities Bank overdraft Trade creditors 995 100 1,400 1,500 200 375 1,075 Less closing stock 100 Gross...
Comment on:
a) the company's performance for the year to 30 June 2018
b) the limitations of ratio analysis
Style Limited (Adapted from Dyson p 245, 10.9) 2018 £ 000 2017 £ 000 2017 000 000 000 000 000 1,900 1,500 420 685 Income Statement Sales (all credit) Cost of Goods Sold Opening stock Purchases (all credit) 80 2018 £ 000 Statement of Financial Position Fixed Assets (NBV) Current Assets Inventory 250 Trade debtors Bank 1,100 Less: Current Liabilities Bank...
The balance sheet of a sole trader revealed the following position. Fixed Assets R R Land and buildings Equipment at cost less depreciation 9 170 15 570 Goodwill at cost less amounts written off 10 250 34 990 Investment in shares at cost 2 200 Current assets Trading stock Sundry debtors less bad debt written off Cash at bank 45 840 19 350 10 920 76 110 13 300 = A Less: current liabilities Sundry creditors and Accruals 77 600...
Thelma Blinkley is the sole proprietor of the "Retro Lounge' a business that sells retro banana lounges. Thelma is a good friend of both Ms Blake and Mr Jones and they frequently refer clients to each other business. They have been so impressed with the quality of accounting work done for them by Michell & Co Accounting Specialists Pty Ltd and in particular with your work that they have suggested that Thelma come to see you for assistance in preparing...
The following figures relate to a hospitality business. 35% of all sales and 80% of all purchases are on credit. Using accepted ratios and percentages comment on the gross and net profits, the current ratio and the acid test, debtors and creditors payment periods, stock turnover, and return on capital employed. Trading and profit and loss account for year ending December 31st 2014 £000's 2014 60,000 24,000 36,000 15.000 21,000 9.750 11,250 Sales Cost of sales Gross profit Wages Net...
Sales (all on credit) Cost of goods sold Average inventory Average accounts receivable Interest expense Income tax expense Net income Average investment in assets Average stockholders' equity $2,750, 000 1,781,00 375,000 282,000 45,000 84,000 159,000 1,800,000 895,000 Required a. From the information given: 1. Compute the inventory turnover. (Round your answer to 2 decimal places.) 2. Compute the accounts receivable turnover. (Round your answer to 2 decimal places 3. Compute the total operating expenses. 4 Compute the gross profit percentage....
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