ABC Limited list of balances on December 31, 2019 $000 Sales 727,911 Cost of sales 394,481 Distribution costs 70,262 Administrative expenses 90,530 Other operating expenses 32,150 Other operating...

ABC Limited list of balances on December 31, 2019
$000
Sales 727,911
Cost of sales 394,481
Distribution costs 70,262
Administrative expenses 90,530
Other operating expenses 32,150
Other operating income 16,300
Finance costs paid 900
Corporation tax charge for (Note 4) 46,208
Defe
ed taxation (Note 3) 6,280
Corporation tax payable (taken to Statement of Financial 20,648 ·
Position)
Property, plant & equipment 153,300
Accumulated depreciation 61,300
Long-term receivables 3,650
Trade receivables 150,126
Allowance for bad debts 7,506
Other receivables and prepayments 5,513
Cash and bank deposits 66,722
Issued ordinary share capital 200,000
General reserve 2,000
Profit & Loss Account: January 1, XXXXXXXXXX,419
Long term loan 6,000
Trade payables 98,880
Other payables and accruals 21,625
Ordinary dividends paid 30,000
Closing inventories 276,027
i_oh· .. q~ longi!
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4. Decrease corporation tax by $1,526,000.
5. Allowance for bad debts is 5% of trade debtors.
6. Interest rate of 15% per annum is charged on the long term loan. No
interest was outstanding at the beginning or at the end of the financial
year.
7. Issued share capital on January 1, 2019, and on December 31, 2019 is
I 00,000,000 ordinary shares
8. Authorized share capital: 500,000,000 ordinary shares
9. All finance costs were paid during the financial year.
IO.The following relates to 2018:
$000
Sales 950,450
Cost of sales 575,565
Profit before interest & taxation 159,550
Taxation charge 35,600
I I .Property, plant and equipment:
Assets Cost Accumulated
(Jan 1, 2019) Depreciation
(Jan 1, 2019)
$000 $000
Land 8,920
Buildings 41,000 2,970
Plant & machinery 32,200 12,880
Furniture, fixtures &
equipment
9,200 7,165
Motor vehicles 60,000 17,480
Charge for the
year
$000
1,025
6,440
1,740
12,000
During the year equipment acquired amounted to $2,480,000 and equipment
costing $500,000 with accumulated depreciation of $400,000 was disposed of
for $150,000.
c. Prepare the Statement of Financial Position as at December 31, 2019.
Comparative figures are required.
d. Prepare the Statement of Cash Flow for the year ended December 31,
2019.
e. Calculate the following ratios for ABC Limited for both years ended 31
December 2018 and 2019 and provide a
ief assessment of the results.
(Show your workings):
1. Return on year-end capital employed (profit before interest and
tax over total assets less cu
ent liabilities)
11. Net asset ( equal to capital employed) turnover
m. Net profit (before tax) margin
1v. Cu
ent ratio
v. Closing inventory holding period (in days)
v1. Trade receivables' collection period (in days)
v11. Trade payables' payment period (based on cost of sales) (in days)
vm. Gearing ( debt over debt plus equity)
hirther instructions:
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ABC Limited Balance Sheet as at December 31, 2018:
Assets
Non-Cu
ent Assets
Property, Plant & Equipment
Long term receivable
Total non-cu
ent assets
Cu
ent Assets
Inventories
Trade receivables
Cu
ent portion of long term receivable
Other receivables and prepayments
Cash and bank deposits
Total cu
ent assets
Total assets
Equity and Liabilities
Shareholders' Equity
Share capital
General reserve
Profit and Loss Account
Total equity
Non-Cu
ent Liabilities
Long term loan
Other interest-free long-term debts
Total non-cu
ent liabilities
Cu
ent Liabilities
Trade creditors
Other payables and accruals
Corporation tax payable
Cu
ent portion of long-term loan
Total cu
ent liabilities
Total liabilities
Total equity & liabilities
$000
110,825
3,650
114,475
265,206
161,735
1,000
4,083
52,777
484,801
599,276
200,000
2,000
151,419
353,419
6,000
6,280
12,280
195,955
16,500
19,122
2,000
233,577
~45,857
S99,276