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Project Acc117

This document provides instructions for Group Project 2, which requires students to analyze financial statements for a sole proprietorship business called AKB Enterprise for the years ended June 30, 2020 and 2021. Students must calculate and interpret various financial ratios for both years, including current ratio, acid-test ratio, gross profit margin, net profit margin, return on investment, inventory turnover ratio, and average collection period. They must also compare and contrast the liquidity, profitability, and efficiency ratios between the two years. The assignment is worth a total of 50 marks and 15% of the course grade.

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Afiqah Alia
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71 views2 pages

Project Acc117

This document provides instructions for Group Project 2, which requires students to analyze financial statements for a sole proprietorship business called AKB Enterprise for the years ended June 30, 2020 and 2021. Students must calculate and interpret various financial ratios for both years, including current ratio, acid-test ratio, gross profit margin, net profit margin, return on investment, inventory turnover ratio, and average collection period. They must also compare and contrast the liquidity, profitability, and efficiency ratios between the two years. The assignment is worth a total of 50 marks and 15% of the course grade.

Uploaded by

Afiqah Alia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACC117/106/PROJECT2/OCTFEB2022

ACC117/106: GROUP PROJECT 2


CARRY MARK: 15%
TOTAL MARKS: 50

INTRODUCTION:
In this group assignment, a group of students are expected to analyse financial
statements using simple financial ratios for sole proprietorship business.

INSTRUCTIONS:
1. Form a group with a maximum of 4 members.
2. Answer all questions.

QUESTION 1

The following are the final accounts of AKB Enterprise for the year ended 30 June 2020
and 2021:

AKB Enterprise
Statement of Profit or Loss for the year ended 30 June 2020 and 2021
2020 2021
Sales 100,000 120,000
Less: Sales Return (3,200) (1,200)
Net Sales 96,800 118,800

Less: Cost of Goods Sold


Opening Inventory 25,200 12,000
Add: Purchases 34,800 24,500
60,000 36,500
Less: Closing Inventory (12,000) (48,000) (12,500) (24,000)
Gross profit 48,800 94,800
Add: other revenues 60,000 36,000
Less: Expenses (14,200) (44,200)
Net Profit 94,600 86,600
ACC117/106/PROJECT2/OCTFEB2022

AKB enterprise
Statement of Financial Position as at 30 June 2020 and 2021
2020 2021
Non-current Assets 169,000 187,000
Current Assets:
Inventory 12,000 12,500
Account Receivable 11,400 33,500
Bank 6,000 9,500
Prepaid expense - 1,000
29,400 56,500
198,400 243,500
Financed by:
Capital 146,400 146,400
Add: Net Profit 94,600 187,000 86,600 233,000

Current Liabilities 11,400 10,500


198,400 243,500

Required:

Based on the financial statements for the year ended on 30 June 2020 and 2021 given,
you are required to:

i) Calculate for both years:

a. Current ratio
b. Acid-test ratio
c. Gross profit margin
d. Net profit margin
e. Return on investment
f. Inventory turnover ratio
g. Average collection period (Assume there are 365 days in a year)
(30 marks)

ii) Interpret each of the ratios for both years.


(14 marks)

iii) Compare and contrast the liquidity ratios, profitability ratios and efficiency ratios
for both years.
(6 marks)
(Total: 50 marks)

END OF QUESTION PAPER

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