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Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 4RE: Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020....
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Compare and contrast the company's performance for the years 2019 and 2020

A C K Q 2 3 A) 2019 INCOME STATEMENT FOR THE YEARS ENDING 31 AUGUST 2020 4 FORMULA USED 2020 2019 i) GROSS MARGIN PROFIT 975,000-460,000 x100 FORMULA USED 5 REVENUE 6 COST OF SALES 7 GROSS PROFIT 8 TOTAL EXPENSES 9 NET PROFIT £950,000.00 £975,000.00 52,82% GROSS MARGIN PROFIT 950,000-455,000 x100 95.20% 975,000 950,000 £ 455,000.00 £ 495,000.00 £ 320,000.00 £460,000.00 £515,000.00 ii) NET PROFIT MARGIN 205,000 x100 £310,000.00 21% NET PROFIT MARGIN 175,000 x100 18,42% 975,000 £175,000.00 £ 205,000.00 950,000 10 iii) CURRENT RATIOS 85,000 30,000 11 STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2,83 CURRENT RATIOS 82,000 30,000 2,83 12 13 2020 2019 iv) QUICK RATIOS 85,000-20,000 2,16 QUICK RATIOS 14 NON-CURRENT ASSETS 15 CURRENT ASSETS 82,000-22,000 40,000 £ 70,000.00 £65,000.00 1,5 30,000 16 CASH AT THE BANK £ 45,000.00 £ 22,000.00 £ 15,000.00 £ 82,000.00 £ 152,000.00 £23,000.00 £ 55,000.00 v) TRADE RECEIVABLES DAYS 10,000 x365 3,74 17 TRADE RECEIVABLES DAYS 15,000 x365 5,73 INVENTORY £20,000.00 £ 10,000.00 £ 85,000.00 975,000 950,000 18 TRADE RECEIVABLES 19 TOTAL CURRENT ASSETS vi) TRADE PAYABLES 30,000 x365 23,80 TRADE PAYABLES 40,000 x365 455,000 32,08 20 TOTAL ASSETS £150,000.00 460,000 21 NON CURRENT LIABILITIES 22 CURRENT LIABILITIES £26,000.00 vii) INVENTORY TURNOVER 460,000 455,000 22,000 23 INVENTORY TURNOVER 20,6 23 TRADE PAYABLES £40,000.00 £ 63,000.00 £ 89,000.00 £30,000.00 RATIOS 20,000 RATIOS 24 TOTAL LIABILITIES 25 NET ASSETS £56,000.00 £ 94,000.00 26 B) 27 EQUITY £ 200,000.00 £ 205,000.00 28 SHARE CAPITAL £200,000.00 29 £ 175,000.00 30 TOTAL EQUITY £89,000.00 £94,000.00 31 32 33 34 35 1. B) TRIAL BALANCE 2. A) PROFIT AND LOSS 3.A) 田 B.
Transcribed Image Text:A C K Q 2 3 A) 2019 INCOME STATEMENT FOR THE YEARS ENDING 31 AUGUST 2020 4 FORMULA USED 2020 2019 i) GROSS MARGIN PROFIT 975,000-460,000 x100 FORMULA USED 5 REVENUE 6 COST OF SALES 7 GROSS PROFIT 8 TOTAL EXPENSES 9 NET PROFIT £950,000.00 £975,000.00 52,82% GROSS MARGIN PROFIT 950,000-455,000 x100 95.20% 975,000 950,000 £ 455,000.00 £ 495,000.00 £ 320,000.00 £460,000.00 £515,000.00 ii) NET PROFIT MARGIN 205,000 x100 £310,000.00 21% NET PROFIT MARGIN 175,000 x100 18,42% 975,000 £175,000.00 £ 205,000.00 950,000 10 iii) CURRENT RATIOS 85,000 30,000 11 STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2,83 CURRENT RATIOS 82,000 30,000 2,83 12 13 2020 2019 iv) QUICK RATIOS 85,000-20,000 2,16 QUICK RATIOS 14 NON-CURRENT ASSETS 15 CURRENT ASSETS 82,000-22,000 40,000 £ 70,000.00 £65,000.00 1,5 30,000 16 CASH AT THE BANK £ 45,000.00 £ 22,000.00 £ 15,000.00 £ 82,000.00 £ 152,000.00 £23,000.00 £ 55,000.00 v) TRADE RECEIVABLES DAYS 10,000 x365 3,74 17 TRADE RECEIVABLES DAYS 15,000 x365 5,73 INVENTORY £20,000.00 £ 10,000.00 £ 85,000.00 975,000 950,000 18 TRADE RECEIVABLES 19 TOTAL CURRENT ASSETS vi) TRADE PAYABLES 30,000 x365 23,80 TRADE PAYABLES 40,000 x365 455,000 32,08 20 TOTAL ASSETS £150,000.00 460,000 21 NON CURRENT LIABILITIES 22 CURRENT LIABILITIES £26,000.00 vii) INVENTORY TURNOVER 460,000 455,000 22,000 23 INVENTORY TURNOVER 20,6 23 TRADE PAYABLES £40,000.00 £ 63,000.00 £ 89,000.00 £30,000.00 RATIOS 20,000 RATIOS 24 TOTAL LIABILITIES 25 NET ASSETS £56,000.00 £ 94,000.00 26 B) 27 EQUITY £ 200,000.00 £ 205,000.00 28 SHARE CAPITAL £200,000.00 29 £ 175,000.00 30 TOTAL EQUITY £89,000.00 £94,000.00 31 32 33 34 35 1. B) TRIAL BALANCE 2. A) PROFIT AND LOSS 3.A) 田 B.
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