Which of the following is a ratio which is used to measure how much a business owes in relation to itssize

Asset turnover

Profit margin

Gearing

Return on capital employed

From the following information regarding the year to 31 August 20X6, what is the accounts payable payment period You

should calculate the ratio using purchases as the denominator.

$

Sales43,000

Cost of sales32,500

Opening inventory6,000

Closing inventory3,800

Trade accounts payable at 31 August 20X64,750

40 days

50 days

53 days

57 days

Which of the following transactions would result in an increase in capital employed

Selling inventory at a profit

Writing off a bad debt

Paying a payable in cash

Increasing the bank overdraft to purchase a non-current asset

A company's gross profit as a percentage of sales increased from 24% in the year ended 31 December 20X1 to 27% in the

year ended 31 December 20X2.

Which of the following events is most likely to have caused the increase

An increase in sales volume

A purchase in December 20X1 mistakenly being recorded as happening in January 20X2

Overstatement of the closing inventory at 31 December 20X1

Understatement of the closing inventory at 31 December 20X1

Which one of the following would help a company with high gearing to reduce its gearing ratio

Making a rights issue of equity shares

Issuing further long-term loan notes

Making a bonus issue of shares

Paying dividends on its equity shares

A company has the following details extracted from its statement of financial position：

$'000

Inventories 1,900

Receivables 1,000

Bank overdraft 100

Payables1,000

The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this industry

have a current ratio lower than the norm.

Which of the following statements accurately describes the company’s liquidity position

Liquidityappears tobewell managed asthe bankoverdraft is relatively low

Liquidityappears tobepoorly-controlledasshownbythelarge payables balance

Liquidityappears tobepoorly-controlledasshownbythecompany’s relatively highcurrent ratio

Liquidityappears tobepoorly-controlledasshownbytheexistence of a bank

Why is analysis of financial statements carried out

So that the analyst can determine a company’s accounting policies

So that the significance of financial statements can be better understood through comparisons

with historical performance and with other companies

To get back to the ‘real’ underlying figures, without the numbers being skewed by the

requirements of International Financial Reporting Standards

To produce a report that can replace the financial statements, so that the financial statements

no longer need to be looked at

Calculate the net profit percentage ratio for Black and Bury and comment on this ratio for the two companies.

Prepare the consolidated statement of financial position for the Prestend group as at 31 October 20X7.Note. A working should be included for group retained earnings. Disclosure notes are not required.

The summarised statements of profit or loss of two companies, Liverton and Everpool, for the year ended 31 May 20X6 are provided below. Liverton acquired 3,000,000 ordinary shares in Everpool for $3,500,000 on 1 June 20X4. At that time, the retained earnings of Everpool were $200,000 and the fair value of the noncontrolling interest in Everpool was $1,000,000.

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MAY 20X6

Liverton Everpool

$'000 $'000

Sales revenue 6,400 2,600

Cost of sales (3,700) (1,450)

Gross profit 2,700 1,150

Distribution costs (1,100) (490)

Administrative expenses (700) (320)

Profit from operations 900 340

Dividends received from Everpool 150 --

Profit before tax 1,050 340

Tax (400) (80)

Profit for the year 650 260

The following information is also available.

(a) Everpool's total share capital consists of 4,000,000 ordinary shares of $1 each.

(b) During the year ended 31 May 20X6 Liverton sold goods costing $110,000 to Everpool for $200,000. At 31 May 20X6, 60% of these goods remained in Everpool's inventory.

【論述題】

Calculate the total goodwill arising on the acquisition of Everpool.