Assignment XLS1015
ASSIGNMENT
Your firm has been approached by a listed company, EXE Limited, and asked if you will accept appointment as auditors for the year ending 31 December 2014 (it is now late November 2014).
EXE Ltd’s Finance Director provided you with the following statement of financial position and income statement information which included actual figures for years ending 31 December 2011 to 2013, with estimated figures for 2014.
EXE Ltd produces gadgets. This was once a fairly profitable industry but both the size and profitability of the industry in Australia have declined significantly in recent years due to advanced technology and replacement products (which EXE Ltd is unable to produce with its existing plant and equipment). Over recent years a number of its competitors and customers have closed down and existing tariffs, quotas and import duties on imported gadgets have been scheduled to be abolished at the beginning of 2014.
EXE Ltd’s factory closed in late November, pending the resolution of an industrial dispute (factory workers demanding a 15% wage rise and reduced hours). It is unlikely that work will resume prior to the Christmas shutdown and consequently the estimated figures for 2014 are not, in the opinion of the Finance Director, expected to change.
EXELIMITED
INCOME STATEMENT
2011
$'000
2012
$'000
2013
$'000
2014
$'000
Revenue
COGS
Depreciation
Amortisation
Interest - Expense (net)
112,500
90,000
2,000
750
2,400
115,875
98,494
2,000
750
2,000
108,923
98,031
2,000
750
1,800
92,584
86,103
2,000
750
1,500
Other expenses
1,850
1,850
1,850
1,850
NPBT
15,500
10,781
4,492
381
Tax expense
6,045
4,204
1,752
149
NPAT
9,455
6,577
2,740
232
EXE LIMITED
BALANCE SHEET AS AT
2011
$'000
2012
$'000
2013
$'000
2014
$'000
Current assets
Cash
Receivables
Inventories
Other
630
21,171
19,784
517
500
24,347
22,752
517
450
27,999
26,164
517
150
33,598
31,397
517
Total Current Assets
42,102
48,116
55,130
65,662
Non-Current assets
Your firm has been approached by a listed company, EXE Limited, and asked if you will accept appointment as auditors for the year ending 31 December 2014 (it is now late November 2014).
EXE Ltd’s Finance Director provided you with the following statement of financial position and income statement information which included actual figures for years ending 31 December 2011 to 2013, with estimated figures for 2014.
EXE Ltd produces gadgets. This was once a fairly profitable industry but both the size and profitability of the industry in Australia have declined significantly in recent years due to advanced technology and replacement products (which EXE Ltd is unable to produce with its existing plant and equipment). Over recent years a number of its competitors and customers have closed down and existing tariffs, quotas and import duties on imported gadgets have been scheduled to be abolished at the beginning of 2014.
EXE Ltd’s factory closed in late November, pending the resolution of an industrial dispute (factory workers demanding a 15% wage rise and reduced hours). It is unlikely that work will resume prior to the Christmas shutdown and consequently the estimated figures for 2014 are not, in the opinion of the Finance Director, expected to change.
EXELIMITED
INCOME STATEMENT
2011
$'000
2012
$'000
2013
$'000
2014
$'000
Revenue
COGS
Depreciation
Amortisation
Interest - Expense (net)
112,500
90,000
2,000
750
2,400
115,875
98,494
2,000
750
2,000
108,923
98,031
2,000
750
1,800
92,584
86,103
2,000
750
1,500
Other expenses
1,850
1,850
1,850
1,850
NPBT
15,500
10,781
4,492
381
Tax expense
6,045
4,204
1,752
149
NPAT
9,455
6,577
2,740
232
EXE LIMITED
BALANCE SHEET AS AT
2011
$'000
2012
$'000
2013
$'000
2014
$'000
Current assets
Cash
Receivables
Inventories
Other
630
21,171
19,784
517
500
24,347
22,752
517
450
27,999
26,164
517
150
33,598
31,397
517
Total Current Assets
42,102
48,116
55,130
65,662
Non-Current assets