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

SECTION-B

ANSWER-3A-COMMON SIZE INCOME STATEMENT

PARTICULARS YEAR 9 YEAR 8

NET SALES 100% 100%

COST OF GOODS SOLD 82% 86%

GROSS PROFIT 18% 14%

OPERATING EXPENSES 16% 10%

INCOME BEFORE TAX 2% 4%

INCOME TAX 0.4% 1%

NET PROFIT 1.6% 3%

NOTES

1-SALES HAVE BEEN TAKEN THE BASE FIGURE

2-ALL THE FIGURES ARE PERCENTAGE OF SALE OF RESPECTIVE YEAR.

3-LITTLE BIT ADJUSTMENT IN DECIMALS HAVE BEEN DONE.

ANS II)-THE AREA OF OPERATING EXPENSES SHOULD BE MAJOR CONCERN FOR THE MANAGERIAL PERSON.BECAUSE AS WE CAN SEE THERE HAS BEEN MAJOR INCREASE IN OPERATING EXPENSES IN THE YEAR 9.AND BECAUSE OF IT NET PROFIT HAS ALSO GONE DOWN.HENCE MANAGERIAL PERSON SHOULD PAY ATTENTION AND FIND THE REASONS FOR SUCH INCREASE SO THAT COMPANY DOESN\'T SUFFER IN THE LONG RUN.

ANS 3B-CASH FLOW STATEMENT

CASH FLOW FROM OPEATING ACTIVITY

NET INCOME 50000

ADD-DECREASE IN INVENTORY 15000

INCREASE IN PAYABLES 6500

DEPRICIATION CHARGES 6500

LESS-INCREASE IN RECEIVABLES 13500

PROFIT ON SALE OF EQUIPMENT 1500

CASH FLOW FROM OPERATIONS 63000

INVESTING ACTIVITY

PURCHASE OF EQUIPMENT ( 25000)

SALE OF EQUIPMENT 2500

CASH FLOW FROM INVESTING ACTIVITY (22500)

FINANCINC ACTIVITY

LOAN TAKEN 20000

LESS - DIVIDEND PAID 40000

CASH FLOW FROM FINANCING ACTIVITY (20000)

INCREASE IN CASH AND CASH EQUIVALENTS 20500

ADD- OPENING CASH 10000

CLOSING CASH 30500(GIVEN)