Section AONE compulsory question Question 1 Yes Manufacturin

Section AONE compulsory question Question 1 Yes Manufacturing Sendirian Berhad was organized five ycars ago and manufactures toys. Its most recent three years\' balance sheets and income statements are reproduced below YES MANUFACTURING SENDIRIAN BERHAD Balance Sheets 30 Junc, Year 5, Year 4 and Ycar 3 Year 5 Year 4 Year 3. Assets Cash Receivabics (nct) Inventory Othcr current assets Plant and cquipment (net) Total asscts RM 12,000 RM 15,000 RM 16,000 60,000 52,000 4,000 70,000 RM 502,000 RM 308,000 RM 202,000 183,000 142,000 5,000 160,000 80,000 97,000 6,000 110,000 Liabilities and equity Accounts payablc Tax payable Long-tcrm liabilities Common stock, RM5 par value Retained earnings fotal liabilities and cquity RM 147,800 30,000 120,000 110,000 94,200 RM502.000 RM 50,400 14,400 73,000 110,000 60,200 RM 308,000 RM 22,000 28,000 22,400 80,000 49,600 RM 202,000 YES MANUFACTURING SENDIRIAN BERHAD Consolidated Income Statements 30 June, Year 5, Year 4 and Year 3 Year 5 ear 4 Year 3 Nct sales Cost of goods sold (iross profit RM1,684,000 RM1,250,000 RM1,050,000 512,000) 538,000 927,000) 757,000 810,000) 440,000 43,300 36,000 Marketing and administrative cost (670,000)_(396,700 (467,760 Operating income Interest cost Earnings before income tax Income tax Net income 70,240 240 68,000 28,000 RM 45,000 RM 21,600 RM 40,000 87,000 12,000 75,000 (30,000 14,000)

Solution

year 5 year 4 current assets cash 1200 15000 receivabes 183000 80000 inventory 142000 97000 other current assets 5000 6000 total current assets 331200 198000 current liabilities accounts payable 147800 50400 tax payable 30000 14400 total current liabilities 177800 64800 working capital 153400 133200 2. current ratio Current ratio = Current assets / Current liabilities year 5 year 4 current assets cash 1200 15000 receivabes 183000 80000 inventory 142000 97000 other current assets 5000 6000 total current assets 331200 198000 current liabilities accounts payable 147800 50400 tax payable 30000 14400 total current liabilities 177800 64800 current ratio 1.86 3.06 3. Acid test ratio acid test ratio = Quick assets/current liabilities year 5 year 4 quick assets cash 1200 15000 receivabes 183000 80000 Total quick assets 184200 95000 current liabilities accounts payable 147800 50400 tax payable 30000 14400 total current liabilities 177800 64800 current ratio 1.04 1.47 4. accounts receivable turnover accounts receivable turnover = net sales / average accounts receivable average accounts receivable = (beginning a/r + ending a/r)/2 year 5 year 4 net sales 1684000 1250000 average inventory 131500 70000 (80000+183000)/2 (60000+80000)/2 accounts receivable turnover 12.81 17.86