Accounting: Learning Outcome

Individual Assignment
Learning outcome | Question | 1. Demonstrate knowledge and understanding of concepts, principles and techniques of accounting | Q1 (a, b & c) and Q2 | 2. Apply appropriate accounting and financial techniques in the preparation, interpretation and presentation of financial statements, | Q1 (a, b & c) | 3. Apply and evaluate financial techniques for management planning, decision making and control in the short, medium and long term. | Exam |

QUESTION 1
Delta Ltd is a medium size firm dealing with furniture business. The condensed financial accounts for the last three years are summarized below:
Income Statement for the financial year ended 31 December as follows:

FY | 2009 | 2010 | 2011 | | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | Sales (all on credit) | | 500 | | 750 | | 990 | Cost of goods sold | | | | | | | Opening inventory | 40 | | 35 | | 60 | | Purchases | 425 | | 650 | | 900 | | | 465 | | 685 | | 960 | | Closing inventory | 35 | 430 | 60 | 625 | 120 | 840 | Gross profit | | 70 | | 125 | | 150 | Less expenses | 40 | | 60 | | 70 | | Loan Interest | - | 40 | - | 60 | 10 | 80 | Net profit | | 30 | | 65 | | 70 |

Balance Sheet as at 31 December FY | 2009 | 2010 | 2011 | | $’000 | $’000 | | $’000 | $’000 | $’000 | Non-current Assets | | 80 | | 95 | | 110 | Current assets | | | | | | | Inventory | 35 | | 60 | | 110 | | Trade Debtors | 60 | | 110 | | 250 | | Cash at Bank | 20 | 115 | 10 | 180 | - | 360 | Financed by | | 195 | | 275 | | 470 | | | | | | | | Beginning Capital | | 100 | | 118 | | 148 | Net profit | 30 | | 65 | | 70 | | Drawings | 12 | 18 | 35 | 30 | 38 | 32 | Ending Capital | | 118 | | 148 | | 180 | Loan | | - | | - | | 120 | Current Liabilities | | | | | | | Creditors | 77 | | 127 | | 150 | | Bank overdraft | - | 77 | - | 127 | 20 | 170 | | | 195 | |