1 The Diamond Company had the following balances as on 31 December, 2020 (5 Marks) Particulars Amount (OMR) Land and Building 90,000 Prepaid Expenses 20,000 Cash in hand 7,300 Accounts Receivable 46,000 Closing inventory 36,400 Machinery 70,000 Drawings 20,600 Accounts payable 15,500 Outstanding expenses 44,000 Bank overdraft 30,000 Capital 59,300 Retained Earnings 55,000 Bonds 56,000 Net profit 30,500 Required Prepare Balance Sheet from the above information 2 The Bright Company had the following balances for the year ended December 31, 2020 Stock on 1 1 2020 OMR 340,000 Stock on 31 12 2020 OMR 380,000 Sales OMR 1,600,000 Sales Returns OMR 200,000 Carriage Inwards OMR 440,000 Purchases OMR 800,000 Purchases Returns OMR 280,000 Selling expenses OMR 80,000 Administrative expenses OMR 90,000 Requiremen t Calculate Gross Profit Ratio and Operating Profit Ratio from the above information (4 Marks) 3 Calculate Average Payment Period from the following information (2 Marks) Accounts Payable on 1 1 2020 OMR 460,000 Accounts Payable on 31 12 2020 OMR 640,000 Total Purchases OMR 1,300,000 Cash Purchases are 30 of Total Purchases 4 Answer the following questions (2 Marks) At present the Receivable collection management of KMT Company is very weak especially there is a delay in sending invoices to customers What suggestion do you give to overcome this problem and improve its collection management To improve its inventory management, XYZ Company would like to classify the inventory items to allocate importance of control to them based on their cost composition Which inventory technique is useful for XYZ Company in this regard 5 As you know that working Capital requirements of an organization depends on various factors Below descriptions of some of the business organizations are given below Johnson and Johnson is a large pharmaceuticals company in the world It manufactures various medicines and health products and supplies to different parts of the world Mr Hatem has electronic shop which sells electronic products to customers He imports goods from South Korea by paying cash Since there is lot of competition in the market, Mr Hatem provides credit facility to his customers Requiremen t Identify the working capital requirements ( low or high ) in the above cases and explain the reason for them (2 Marks)

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1. The Diamond Company had the following balances as on 31 December, 2020. (5 Marks) Particulars Amount (OMR) Land and Building 90,000 Prepaid Expenses 20,000

1. The Diamond Company had the following balances as on 31 December, 2020. (5 Marks)

Particulars	Amount (OMR)
Land and Building	90,000
Prepaid Expenses	20,000
Cash in hand	7,300
Accounts Receivable	46,000
Closing inventory	36,400
Machinery	70,000
Drawings	20,600
Accounts payable	15,500
Outstanding expenses	44,000
Bank overdraft	30,000
Capital	59,300
Retained Earnings	55,000
Bonds	56,000
Net profit	30,500

Required: Prepare Balance Sheet from the above information

2. The Bright Company had the following balances for the year ended December 31, 2020:

Stock on 1.1.2020 .. OMR 340,000

Stock on 31.12.2020.. OMR 380,000

Sales.. .. OMR 1,600,000

Sales Returns. OMR 200,000

Carriage Inwards . OMR 440,000

Purchases ...... OMR 800,000

Purchases Returns OMR 280,000

Selling expenses. OMR 80,000

Administrative expenses OMR 90,000

Requirement: Calculate Gross Profit Ratio and Operating Profit Ratio from the above information. (4 Marks)

3. Calculate Average Payment Period from the following information. (2 Marks)

Accounts Payable on 1.1.2020 OMR 460,000

Accounts Payable on 31.12.2020 OMR 640,000

Total Purchases .................. OMR 1,300,000

Cash Purchases are 30% of Total Purchases.

4. Answer the following questions: (2 Marks)

At present the Receivable collection management of KMT Company is very weak especially there is a delay in sending invoices to customers. What suggestion do you give to overcome this problem and improve its collection management?

To improve its inventory management, XYZ Company would like to classify the inventory items to allocate importance of control to them based on their cost composition. Which inventory technique is useful for XYZ Company in this regard?

5. As you know that working Capital requirements of an organization depends on various factors. Below descriptions of some of the business organizations are given below:

Johnson and Johnson is a large pharmaceuticals company in the world. It manufactures various medicines and health products and supplies to different parts of the world.

Mr. Hatem has electronic shop which sells electronic products to customers. He imports goods from South Korea by paying cash. Since there is lot of competition in the market, Mr. Hatem provides credit facility to his customers.

Requirement: Identify the working capital requirements (low or high) in the above cases and explain the reason for them. (2 Marks)