(a) Xesta Limited (XL) operates an incubation centre for its new product(s) ideas. This centre purchases raw materials and any complete output is sold at a price as part of its test marketing independently. The centre fixes prices to make a standard gross profit percentage on sales of 25%.The following information is available for the year ended 28 February 2019.Inventory (1 March 2018) Shs 243 million; purchases for the year Shs 595.6 million; purchase returns Shs 41.2 million; inventory (28 February 2019) shs 261.7 million. Required: Compute the sales made by the centre for the year ended 28 February 2019.
(a) Xesta Limited (XL) operates an incubation centre for its new product(s) ideas. This centre purchases raw materials and any complete output is sold at a price as part of its test marketing independently. The centre fixes prices to make a standard gross profit percentage on sales of 25%.The following information is available for the year ended 28 February 2019.Inventory (1 March 2018) Shs 243 million; purchases for the year Shs 595.6 million; purchase returns Shs 41.2 million; inventory (28 February 2019) shs 261.7 million.
Required: Compute the sales made by the centre for the year ended 28 February 2019.
(b)
The following information relates to the main operations of Xesta Limited (XL) for the year ended 28 February 2019.
1. On 1 March 2018, the summary of assets and liabilities were as follows; cash at Hand Shs 42,300,000; shs Cash at Bank Shs 40,800,000; Trade payables Shs 60,500,000 and rent outstanding Shs 2,480,000.
2. The following information relates to transactions that look place during the financial year. Customers who buy on credit pay by cheque, and payments to suppliers are made by cheque. On every Saturday, weekly collections are sent to the bank after paying weekly salaries shs 300,000; miscellaneous expenses shs.50,000 per week, and weekly drawings shs 100,000.
3. The company made the following payments by cheque, payments to supplier’s shs 85,400,000; Rent shs 5,430,000; Insurance premium shs 1,853,000.The Company also deposited a total shs 123,900,000 to its bank account. Received a cheque of shs 15.5 million from the customers who bought items on credit and cash sales for the period were shs 132,600,000.
4. At the reporting date, the balances were as follows; Trade receivables shs 62,420,000; Trade payables shs 64,000,000; Inventory shs 50,400,000; and Rent outstanding shs 1,260,000.
Required: prepare the statement of profit or loss for Xesta Limited (XL), for the year ended 28 February 2019 and the
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