Week 6 class exercise.docx - UNITED STATES INTERNATIONAL...

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UNITED STATES INTERNATIONAL UNIVERSITY CHANDARIA SCHOOL OF BUSINESS MOD6000: ACCOUNTING FOR NON-ACCOUNTANTS WEEK 6 CLASS EXERCISE Illustration One The following are the summarized accounts of Pole Pole Ltd. For the years ended 31 st December 2011 and 2012: Statement of Financial Position as at 2011 2012 Cost 000 Depreciation 000 Net 000 Cost 000 Depreciation 000 Net 000 Land 1,00 0 200 800 1,80 0 220 1,58 0 Plant and machinery 200 80 120 220 100 120 920 1,70 0 Investments 1,00 0 1,60 0 Motor vehicles 860 1,26 0 Stock 1,10 0 1,30 0 Debtors 800 1,00 0 Bank 60 - 4,74 0 6,86 0 Ordinary shares Sh. 20 800 1,00 0 Share premium 240 280 Revaluation reserve - 400 Profit and loss account 500 500 10% debentures 2,00 0 3,00 0 Creditors 800 1,20 0 Proposed dividends 400 400 Bank overdraf - 80 4,74 0 4,74 0 Income Statement 2011 2012 Sh.000 Sh.000 Sales 4,000 4,000 Cost of sales 2,000 2,400 Gross profit 2,000 1,600 Expenses 1,200 1,200 Net profit 800 400 Dividends 400 400 Balance brought forward 100 400 Balance carried forward 500 500 Required Calculate for the years 2011 and 2012 the following ratios: (i) Accounts receivables period; (ii) Accounts payable period; (iii) Current ratio; (iv) Quick assets (acid test) ratio; 1
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(v) Gross profit margin;
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