Please solve all questions pleaseSales cycle Healthcare Bhd is a listed pharmaceutical comnpany. Its principal sctivities are producinsedical and beauty-based products. Below is an extract from the statement of profit otNast and the statement of financial position for the last two financial years of the company.31 Dee 2614 De 7(MYR 0) IMYRStatement of profit or loss extractRevenue37,410(17,600)Cost of sales31,820Gross profit(21,265)19,81010,555Operating expensesAdministrationSelling and distributionInterest payable(6,175)(6,600)(4,905)(3,445)(505)(525)Investment income725Profit/(loss) before tax8,950(15)Statement of financial position extractCash and bank1,265(4,750)Account receivables11,70010,000Additional information:(i) Sales are made to companies, with income being in the form of cash and credits. Creditsales are given to trusted customers with a term of n/60. The current year accountsreceivable includes a long overdue balance of MYR 1,700 which is outstanding morethan a year. However, the company does not record any allowance for doubtfulaccounts.(ii) All items sold are delivered to the customer using Healthcare Bhd's own delivery vans.The directors of Healthcare Bhd indicate that the company has had a difficult year,but are pleased to present some acceptable results to the members.Required:a) As part of your risk assessment procedures for Healthcare Bhd, identify and provide apossible explanation for the unusual changes in the income statement.b) Confirmation of the end-of-year bank and account receivables balances are importantaudit procedures. Discuss the audit objectives pertaining to the procedures.

a) The unusual changes in the income statement is Cost of sales. Inspite of the Sales figure going…

Required: a) As part of your risk assessment procedures for Healthcare Bhd, identify and provide a possible explanation for the unusual changes in the income statement. b) Confirmation of the end-of-year bank and account receivables balances are important audit procedures. Discuss the audit objectives pertaining to the procedures.

Required: a) As part of your risk assessment procedures for Healthcare Bhd, identify and provide a possible explanation for the unusual changes in the income statement. b) Confirmation of the end-of-year bank and account receivables balances are important audit procedures. Discuss the audit objectives pertaining to the procedures.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 10QE: Checkpoint Systems is a leading provider of source tagging, handheld labeling systems, retail...

See similar textbooks

Similar questions

Based on the information below, calculate the profit margin for Starbuck’s and Dunkin and choose the company that is strongest. Starbuck's Dunkin Brands Revenues 6,310 Revenues 350 Net Income 852 Net Income 66 EBITDA 1,510 EBITDA 122
The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results: North South Sales $3,720,000 $3,220,000 Operating income 930,000 730,000 Taxable income 785,000 510,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. North: Answer South: Answer b. What are the respective residual incomes of the North and South divisions? North: Answer South: Answer c. Which division has the better return on investment and which division has the better residual income figure? Return on investment: Answer Residual Income: Answer
CVP Corporation manufactures pharmaceutical products sold through a network ofsales agents. The agents are currently paid an 12% commission on sales with a yearly bonusof 2% of profit after tax (PAT); that percentage was used when CVP prepared the followingbudgeted income statement for the calendar year ending September, 2021 CVP CorporationBudgeted Income StatementFor the Year ending September 30, 2021 (Rs ’000 omitted) Sales Rs 52,750Cost of goods soldVariable Rs 16,880Fixed 13,950 30,830Gross Profit Rs. 21,920Selling & Administrative costsCommissions Rs 6,330Fixed advertising cost 2,950Fixed administrative cost 2,530 11,810Operating Income (EBIT) Rs 10,110Fixed Interest cost 1,225Income before income taxes (EBT) Rs 8,885Income Taxes (30%) 2,666Net Income (PAT) Rs 6,219Since the completion of income statement, CVP has learned that its sales agents arerequiring a 6% increase in their commission rate (to 18%) for the upcoming year. As a result,CVP’s president has decided to…
You are a consultant for Glory Ltd, a quoted company operating in the manufacturing sector. Following are aStatement of Profit or Loss and Statement of Financial Position with comparatives for the year ended 31stDecember 2018.Statement of Profit or Loss for the year ended 31 st December, 201820182017GHSGHSSales revenue3,095,5761,909,051Cost of sales2,402,6091,441,950Gross profit692,967467,101Interest receivable7442,782Administration expenses333,466222,872Operating profit360,245247,011Interest18,11521,909Profit before taxation342,130225,102Income tax expense74,20031,272Profit for the year267,930193,8303Statement of Financial Position as at 31 December 2018Assets20182017GHSGHSNon-current assetsProperty, plant and equipment 802,180656,071Current assetsInventory64,42286,550Trade receivables905,679807,712Prepayment and accrued income 97,02245,729Cash at bank and in hand 1,32768,3631,068,4501,008,354Total assets1,870,6301,664,425Equity and liabilitiesEquityOrdinary shares258,178258,178Income…
Hardy is a public listed manufacturing company. Its summarised financial statements for the year ended 30 September 2019 (and 2018 comparatives) are: 2010 RM’000 2009 RM’000 Revenue 29,500 36,000 Cost of sales (25,500) (26,000) Gross profit 4,000 10,000 Distribution costs (1,050) (800) Administrative expenses (4,900) (3,900) Investment income 50 200 Finance costs (600) (500) Profit (loss) before taxation (2,500) 5,000 Income tax (expense) relief 400 (1,500) Profit (loss) for the year (2,100) 3,500 Income statements for the year ended 30 September: Statements of financial position as at 30 September: 2010 2009 RM’000 RM’000 RM’000 RM’000 Assets Non-current assets Property, plant and equipment 17,600 24,500 Investments at fair value through profit or loss 2,400 20,000 4,000…
Hardy is a public listed manufacturing company. Its summarised financial statements for the year ended 30 September 2019 (and 2018 comparatives) are: 2010 RM’000 2009 RM’000 Revenue 29,500 36,000 Cost of sales (25,500) (26,000) Gross profit 4,000 10,000 Distribution costs (1,050) (800) Administrative expenses (4,900) (3,900) Investment income 50 200 Finance costs (600) (500) Profit (loss) before taxation (2,500) 5,000 Income tax (expense) relief 400 (1,500) Profit (loss) for the year (2,100) 3,500 Income statements for the year ended 30 September: Statements of financial position as at 30 September: 2010 2009 RM’000 RM’000 RM’000 RM’000 Assets Non-current assets Property, plant and equipment 17,600 24,500 Investments at fair value through profit or loss 2,400 20,000 4,000…
Hardy is a public listed manufacturing company. Its summarised financial statements for the year ended 30 September 2019 (and 2018 comparatives) are: 2010 RM’000 2009 RM’000 Revenue 29,500 36,000 Cost of sales (25,500) (26,000) Gross profit 4,000 10,000 Distribution costs (1,050) (800) Administrative expenses (4,900) (3,900) Investment income 50 200 Finance costs (600) (500) Profit (loss) before taxation (2,500) 5,000 Income tax (expense) relief 400 (1,500) Profit (loss) for the year (2,100) 3,500 Income statements for the year ended 30 September: Statements of financial position as at 30 September: 2010 2009 RM’000 RM’000 RM’000 RM’000 Assets Non-current assets Property, plant and equipment 17,600 24,500 Investments at fair value through profit or loss 2,400 20,000 4,000…
Stay Handy company is a large company providing door to door delivery service forgroceries and other daily need items. In the most recent year, company had 60 millionmembers, through which provided it a revenue of $33,347 in the most recent year. Thedetails relating to Costs and expenses for the year were as follows:ParticularsCost of revenueSelling, general, and administrative expensesDepreciation and amortizationAmount (S in millions)§14 958S§7 9948,150Form the total cost of revenue 30% was fixed and the selling, general and administrativeexpenses are fixed to the extent of 70% to the number of members. How manymemberships does the company need to break-even? (All interim calculations and finalanswers should be rounded off to one decimal place)
Our company is a manufacturer and has the following data available for the current year: sales, $550,000; sales discounts, $20,000; sales returns and allowances, $15,000; and cost of goods sold, $200,000. What is the amount reported on the income statement for net sales? $530,000 $515,000 $500,000 $330,000
Planet Ltd produces fridges and freezers, which are sold to retailers. The financial statements for the last three years are as follows: Income statements for the year ending 31st December 2021 2022 £000 £000 Revenue 336,250 427,038 Cost of sales (126,675) (190,012) Gross profit 209,575 237,025 Administration expenses (73,290) (95,795) Distribution expenses (14,678) (8,720) Operating profit 121,407 121,931 Interest (8,750) (11,250) Profit before tax 118,142 166,326 Tax (22,531) (22,136) Profit for the year 90,126 88,545 Statements of financial position as at 31st December 2021 2022 ￡000 ￡000 Non-current assets Property, plant and equipment 286,250 327,650 Current assets Inventories 37,000 28,000 Trade receivables 42,000 43,500 Cash 19,632 24,570 98,632 96,070 Total assets 384,882…
Planet Ltd produces fridges and freezers, which are sold to retailers. The financial statements for the last three years are as follows: Income statements for the year ending 31st December 2021 2022 £000 £000 Revenue 336,250 427,038 Cost of sales (126,675) (190,012) Gross profit 209,575 237,025 Administration expenses (73,290) (95,795) Distribution expenses (14,678) (8,720) Operating profit 121,407 121,931 Interest (8,750) (11,250) Profit before tax 118,142 166,326 Tax (22,531) (22,136) Profit for the year 90,126 88,545 Statements of financial position as at 31st December 2021 2022 ￡000 ￡000 Non-current assets Property, plant and equipment 286,250 327,650 Current assets Inventories 37,000 28,000 Trade receivables 42,000 43,500 Cash 19,632 24,570 98,632 96,070 Total assets 384,882…
Planet Ltd produces fridges and freezers, which are sold to retailers. The financial statements for the last three years are as follows: Income statements for the year ending 31st December 2021 2022 £000 £000 Revenue 336,250 427,038 Cost of sales (126,675) (190,012) Gross profit 209,575 237,025 Administration expenses (73,290) (95,795) Distribution expenses (14,678) (8,720) Operating profit 121,407 121,931 Interest (8,750) (11,250) Profit before tax 118,142 166,326 Tax (22,531) (22,136) Profit for the year 90,126 88,545 Statements of financial position as at 31st December 2021 2022 ￡000 ￡000 Non-current assets Property, plant and equipment 286,250 327,650 Current assets Inventories 37,000 28,000 Trade receivables 42,000 43,500 Cash 19,632 24,570 98,632 96,070 Total assets 384,882…