Question

Case Study 1: LQU Company SAOG (the "Company") is an Omani joint stock company registered under the Commercial Companies Law of the Sultanate of Oman The registered address, principal office and the manufacturing facility is located at Muscat, Sultanate of Oman The Company's shares are listed in the Muscat Securities Market. The principal activities of the company are the manufacture and sale of shipping equipment including associated works The given below are the details of the balances as at the end of the year 2019. The company had a balance of RO 325,000 in their Investments account. Along with that the company had cash and cash equivalents which included cash in hand RO 2,065, Bank balance in current accounts RO 1,065,582. • The inventories at the end period included Raw material of RO 2.647,538, Finished stock RO 946,811, Work in progress RO 163,273 and other consumables of RO 423,554. • The Trade and other receivables were calculated to be RO 58,000 for advances and deposits Prepayments of RO 43,688 and Accounts receivables of RO 5.235,403. • The Trade and other payables included accrued expenses of RO 1,048,781, Trade payables of RO 1.627.724 and Other payables of RO 140,892 • The provision for tax for the year was calculated to be RO 224,597 • The company also had short term borrowings which comprised of short-term loans of RO 500,000 and Loans against trust receipts of RO 3,049,783 • Property plant and equipment includes the following assets as given below with their respective amounts of cost and accumulated depreciation as at the year-end Cost RO Accumulated Depreciation RO Buildings 2.507,427 1.895,037 Plant and Machinery 11.891.000 8.507.355 Extrusion Equipment 4,998.000 4.992 377 Office and other equipment 469,000 449.755 Furniture and fittings 162.000 157,727 Motor vehicles 68,000 65.652 Computer installations 346,368 315.969 The depreciation was charged for the year as follows: RO Depreciation on Plant and Buildings 49.987 Machinery, Buildings to be Plant and Machinery 846,681 included in cost of sales and the Extrusion Equipment Nil remaining depreciation is Office and other equipment 26.691 allocated as general and Fumiture and fittings 14,660 administrative cost Motor vehicles 4.324 Computer installations 11322

Answer 1

• Statement of Financial	Position
  Equity & Liabilities	Amount	Asset	Amount
  Equity Share Capital	3,357,145	Cash in Hand	2,065
  Legal Reserve	1,119,000	Bank Balance in Current Account	1,065,582
  Retained earnings	3,509,041	Investment Account	325,000
  		Less: Unrelised Loss	(12,290)
  		Net Investment	312,710
  		Inventory
  		Raw Material	2,647,538
  Borrowings		Finished Stock	946,811
  Short Term Borrowings	500,000	WIP	163,273
  Loan againts Trust receipts	3,049,783	Other Consumables	423,554
  Current Liabilities		Current Assets
  Accrued Exp	1,048,781	Advances & Deposits	58,000
  Trade Payables	1,627,724	Prepayment	43,688
  Other payables	140,892	Accounts Receivable	5,235,403
  Deferred Tax Liability	82,800	Propert, Plant & Equipment
  Employee end of service benefits	296,784	Buildings	612,390
  		P&M	3,383,645
  Provision for tax	224,597	Extrusion Equiments	5,623
  		Office & other equipment	19,245
  		Furniture and Fittings	4,273
  		Motor Vehicles	2,348
  		Computer installation	30,399
  Total Equity & Capital	14,956,547	Total Assets	14,956,547

  Income Statement
  Sales	18,623,000
  Less: Cost of Goods Sold
  Raw Materials	13,091,758
  Labour Cost	982,357
  Other Production Cost	289,243
  Depreciation on Building	49,987
  Depreciation on P&M	846,681
  Gross Profit	3,362,974
  Other Income
  Insurance Claims	5,300
  Gain from disposal of asset	332,747
  Total Income	3,701,021
  Less: Admin Cost
  Salaries and staff related cost	854,431
  Directors Remuneration	30,157
  Other Admin Overheads	316,835
  Directors sittig fees	20,308
  Depreciation on PPE other than Building & P&M	56,997
  Less: SellingCost
  Outward Freight Charges	492,901
  Travelling and Sales Commission	95,396
  Other Distribution Cost	358,845
  Profit before tax and interest	1,475,151
  Finance Cost	157,186
  Profit before Tax	1,317,965
  Tax Expenses	190,959
  Profit after Tax	1,127,006
  Other Comprehensive Income adjustment for available for sale investments	(12,290)
  Comprehensive Income	1,114,716
  Basic EPS	0.17
  Net Assets Per Share	1.19