3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
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The following information is available for the Northern Division of Blackford Industrial Ltd: Statement of financial position at 30 April 2011 $000 $000 $000 Non-current assets at net book value Current assets Inventory Trade receivables Bank Current liabilities Trade payables Other payables Net current assets Capital employed Equity Ordinary share capital – $1 each Share premium Retained earnings Total shareholders’ funds Additional information for year ended 30 April 2011 $000 Total revenue 480 Cash purchases Cash paid to credit suppliers Operating expenses At 30 April 2010, the following balances were reported: $000 Inventory Trade payables REQUIRED Calculate the following amounts for the year ended 30 April 2011: cost of sales gross profit and profit for the year (net profit). An analysis of the Southern Division of Blackford Industrial Ltd for the year ended 30 April 2011 yielded the following results. Southern Division Mark-up 40% Gross profit percentage 28.57% Expenses to sales 20% Net profit percentage 8.57% Return on capital employed 18.00% Rate of inventory turnover 8.95 times Liquid ratio (acid test) 1.1:1 REQUIRED Northern Division Calculate each of the same ratios for the Northern Division of Blackford Industrial Ltd, for the year ended 30 April 2011. The calculations should be correct to two decimal places. Mark-up Gross profit percentage Expenses to sales Net profit percentage Return on capital employed Rate of inventory turnover Liquid ratio (acid test) Using the profitability ratios – compare the performance of the Northern and Southern Divisions of Blackford Industries and explain the significance of each ratio.
9706_s11_qp_22
THEORY
2011
Paper 2, Variant 2
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Questions Discovered
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