ACCT1002 Introduction to Financial Accounting Tutorial Questions 1
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ACCT1002 Introduction to Financial Accounting
Tutorial Questions 1
1.1
“Financial accounting and reporting provide financial information about the entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity?”
Discuss
1.2
What are the criteria that requires a proprietary company to prepare financial reports pursuant to the Corporations Act 2001 (Cth)?
1.3
Identify the four (4) financial statements and explain what information each financial statement provides.
1.4 and 1.5
Complete both 1.4 and 1.5 (Excel)
ICA1.4_1.5
1.6
Financial Ratio Analysis
|
XYZ, Inc. Balance Sheet (in millions of $) |
||
|
Current Assets |
2020 |
2021 |
|
Cash |
84 |
98 |
|
Accounts Receivable |
165 |
188 |
|
Inventory |
393 |
422 |
|
Total Current Assets |
642 |
708 |
|
|
|
|
|
Current Liabilities |
|
|
|
Accounts Payable |
312 |
344 |
|
Notes Payable (<1 Year) |
231 |
196 |
|
Total Current Liabilities |
543 |
540 |
|
Long-Term Debt |
531 |
457 |
|
Total Liabilities |
1,074 |
997 |
|
Owner's Equity |
500 |
550 |
|
Retained Earnings |
1,799 |
2,041 |
|
Total Owner's Equity |
2,299 |
2,591 |
|
Total Liabilities and Equity |
3,373 |
3,588 |
|
XYZ, Inc. Income Statements (in millions of $) |
||
|
XYZ, Inc. Balance Sheet (in millions of $) |
||
|
|
2020 |
2021 |
|
Sales |
2,311 |
2,872 |
|
Cost of Goods Sold |
1,344 |
1,685 |
|
Gross Profit |
967 |
1,187 |
|
Depreciation |
691 |
785 |
|
Earnings Before Interest & Taxes |
276 |
402 |
|
Interest |
141 |
120 |
|
Earnings Before Taxes |
135 |
282 |
|
Net Income (Profit) |
89.1 |
186.1 |
Required:
a) Calculate the Current Asset Ratio* for 2020 and 2021
b) Calculate the Gross Profit Margin** for 2020 and 2021
*Current Asset Ratio = Current assets/Current liabilities
**Gross Profit Margin = Gross profit/Sales x 100
c) Comment on the results.
2023-02-02