SIBT ACCG106 Final Exam Revision Questions.docVIP

SIBT ACCG106 Final Exam Revision Questions Cash Flow Statement The following information is available for Steele Industries Ltd as at 31 December 2008. Payment of long-term debt $200,000 Collections from accounts receivable 210,600 Cash payments to purchase plant assets 76,000 Collection of interest revenue 13,700 Payment of cash dividends 48,500 Income tax expense and payments 39,200 Proceeds from sale of plant assets 31,800 Cash receipt of dividend revenue 19,300 Payments of salaries 94,100 Depreciation expense 72,400 Cash sales 203,900 Proceeds from the issue of shares 300,000 Payments for interest expense 60,400 Payments to suppliers 294,700 Cash balance: December 31, 2007 55,500 Cash balance: December 31, 2008 ? Required: (a) Prepare the Statement of Cash Flows for the year ended December 31, 2008 using the direct method. (8 marks) Ratio Analysis The following ratios were prepared for ABC Ltd for three years. Ratio Year 1 Year 2 Year 3 Industry Average Net profit margin 12% 11% 9% 12% Current ratio 2.4:1 2.2:1 1.8:1 2.0:1 Inventory turnover 110 days 102 days 87 days 95 days Debtors settlement 51 days 55 days 68 days 51 days Quick ratio 1.1:1 1.0:1 1.1:1 1.0:1 Gross profit margin 36% 35% 37% 34% Required: Examine the given ratios. Year 3 is the current year. Compare Year 3’s ratios with ratios from previous years and the industry averages. Comment on any two (2) of the following aspects of the business: profitability liquidity efficiency Cash Budgets P.10.7 Ken Martin, manager of Lonnie Car Repairers, has requested that you prepare a cash budget for the months of December and January. He has provided the following information to assist in this task: Projected cash balance at the end of November is $30 000. Actual revenue for October and November and projected revenue for December and January are as follows: Analysis of past records has shown that credit sales are collected over a three-month period, with 50 per cent being collected i