past-year-balance-sheet-and-pl-account-questions.pdf

past-year-balance-sheet-and-pl-account-questions.pdf - 3 2...

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M06/3/BUSMT/SP2/ENG/TZ0/XX 2206-5104 – 3 – Turn over 2. Teddybears Picnics Ltd Teddybears Picnics Ltd produces teddy bears. Financial information includes: 2004 ($) 2005 ($) Fixed assets 10 000 10 000 Sales revenue 22 000 24 000 Cash 1 200 1 000 Stock 4 800 5 200 Debtors 2 900 3 200 Cost of sales 8 400 8 900 Creditors 3 200 3 400 Retained profit 8 700 9 900 Overheads 4 400 5 000 Long term liabilities 7 000 6 100 (a) Define the following terms: (i) fixed assets (ii) current assets (iii) current liabilities . [6 marks] (b) Construct a profit and loss account for Teddybears Picnics Ltd for each of the years 2004 and 2005. [5 marks] (c) Produce a balance sheet for Teddybears Picnics Ltd for each of the years 2004 and 2005. [6 marks] (d) Identify three ways in which Teddybears Picnics Ltd can improve their net profit. [3 marks]
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N06/3/BUSMT/SP2/ENG/TZ0/XX 8806-5014 – 6 – 5. Seifert Sawmill The Seifert Sawmill has operated in Sweden for 80 years. Daniel Seifert, the managing director, provided the following data on a proposal to set up a Sawmill in Latin America. Table 1 Fixed costs $800 000 per annum Variable costs $1000 per batch Selling price $4000 per batch Forecast sales 500 batches per annum Table 2 The fixed costs per annum: $ The variable costs: $ Directors fees 200 000 Rent 250 000 Annual logging licence 100 000 Depreciation 70 000 Interest 150 000 Other expenses 30 000 Direct labour 300 per batch Machine hire 100 per batch Electricity 100 per batch Vehicle running costs 100 per batch Materials 400 per batch Seifert Sawmills has hired a management consultancy firm, Business Dynamics, to assess the business environment in Latin America. The following is a summary of their findings: the local and regional construction industry is showing strong signs of recovery from recession the recent national elections resulted in the PBP political party being re-elected with policies favouring the business community the local currency has been pegged to the US dollar in an attempt to improve business confidence and contain inflation the trade union movement in Latin America is getting stronger. There is a widespread belief among employees that trade unions offer the only real hope of improving living standards global and local environmental groups are gaining in popularity and political influence there is a growing use of synthetic materials in the construction industry rather than timber. (a) Use the data in Table 1 to prepare a break-even chart for Seifert Sawmill . [6 marks] (b) Identify on your chart the margin of safety and profit if 500 batches are sold. [2 marks] (c) Assuming 500 batches are sold, construct a forecast profit and loss account using the data provided in Table 2. [6 marks] (d) Use a PEST/STEP framework to evaluate two external factors which might influence Seifert Sawmill’s decision to set up a sawmill in Latin America. [6 marks]
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