Scribd Logo
Upload

Welcome to Scribd!

  • 119 views

    Balance Sheet & Y Statement 18 PDF

    Uploaded by

    Mercians RX

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Balance Sheet & Y Statement 18 PDF

    Uploaded by

    Mercians RX
    119 views2 pages

    Original Title

    Balance sheet & Y statement 18.pdf

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    119 views2 pages

    Balance Sheet & Y Statement 18 PDF

    Uploaded by

    Mercians RX

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    –2– M18/3/BUSMT/SP2/ENG/TZ0/XX

    Section A

    Answer one question from this section.

    1. Fishers

    Fishers manufactures baseball caps. In 2017, it sold 75 000 caps. The variable cost per cap was
    $6. 70 % of Fishers’s annual sales occur from April to September. Starting in March, Fishers
    experiences a significant increase in current assets and current liabilities, which start to decrease
    in October.

    Table 1: Selected data for Fishers for 2017 (figures in $000s)

    Sales revenue $900


    Fixed costs $55

    Table 2: Selected forecasted financial information for Fishers for 2018

    Increase in number of baseball caps sold 10 %


    Increase in variable costs per cap $1.00
    Fixed costs $55 000
    Interest $30 000
    Income tax expense 20 % of net profit before tax

    Sales price per cap will remain the same as in 2017.

    [Source: © International Baccalaureate Organization 2018]

    (a) Define the term current assets. [2]

    (b) Using Table 1, calculate Fishers’s net profit before interest and tax for 2017 (show all
    your working). [2]

    (c) Using Table 2, calculate the following forecasted figures for 2018:

    (i) sales revenue; [1]

    (ii) total variable costs; [1]

    (iii) income tax; [1]

    (iv) net profit after interest and tax. [1]

    (d) Explain why Fishers experiences a significant increase in current assets and current
    liabilities from March to October. [2]
    –3– M18/3/BUSMT/SP2/ENG/TZ0/XX

    2. Visionary Toys (VT)

    Visionary Toys (VT) produces highly innovative toys for children. VT began operation in January
    2017 and its unique selling point/proposition (USP) is producing toy parts with a 3D printer. The
    financial director presented financial information for VT at the end of 2017. He was concerned
    about VT’s liquidity.

    Table 1: Revenue and expense information for the year 2017 and balance sheet items at
    31 December 2017

    Cash $1000
    Net fixed assets $27 000
    Interest paid $250
    Creditors $4000
    Debtors $3500
    Accumulated retained profit
    $10 000
    – end of 2017
    Costs of goods sold $7500
    Sales revenue $27 250
    Short-term loans $1500
    Overdraft balance $2000
    Expenses $7000
    Share capital $13 500
    Dividends paid $2500
    Long-term liabilities $5000
    Stock of toy parts $4500

    [Source: © International Baccalaureate Organization 2018]

    (a) Define the term unique selling point/proposition (USP). [2]

    (b) (i) Construct a fully labelled balance sheet for VT for the end of 2017. [5]

    (ii) Calculate the acid test (quick) ratio for VT for 2018. [1]

    (c) Explain one way VT could improve its liquidity. [2]

    Turn over

    You might also like