5. Preparation of financial statements
A section of Accounting, 7707
Listing 10 of 227 questions
Jabir owns an electrical wholesale business. The following balances appeared in his books on 30 September 2021. $ Inventory 8 000 Purchases 109 000 Trade payables 11 600 Revenue 160 000 Trade receivables 22 600 Operating expenses 35 200 The inventory on 1 October 2020 was $11 000. All sales and purchases were on a credit basis. REQUIRED Calculate the gross profit and profit for the year. Calculate the gross margin. Advise Jabir on two actions he could take to improve his gross margin. Calculate the trade receivables turnover. Round up your answer to the next whole day. Jabir wants to increase his credit sales and is considering allowing his credit customers an extra 14 days above his current trade receivables turnover. REQUIRED Advise Jabir whether he should allow his credit customers an extra 14 days above his current trade receivables turnover. Justify your answer. Calculate the trade payables turnover. Round up your answer to the next whole day. Jabir’s credit suppliers are prepared to double the rate of his trade discount provided he increases his current monthly purchases by 20%. REQUIRED Advise Jabir whether he should increase his current monthly purchases by 20% to earn the additional trade discount. Justify your answer.
7707_w21_qp_22
THEORY
2021
Paper 2, Variant 2
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Questions Discovered
227