Cuba Jaya Berhad's Statement of Profit or Loss for the year ended 31 December 2019 are as follows: Cuba Jaya Berhad Statement of Profit or Loss for the year ended 31 December 2019 2019 RM Revenue 4,500,000 Cost of sales (2,250,000) Gross profit 2,250,000 Administrative expenses 715,000 Distribution cost 400,000 Operating profit 1,135,000 Finance cost (328,400) Investment income 254,900 Profit before tax 1,061,500 Tax expense (297,220) Profit after tax 764,280 Cuba Jaya Berhad Statement of Financial Position as at 31 December 2019 2019 RM Non-current assets Investments Property, plant & equipment RM 5,000,000 10,000,000 Current assets Cash in hand & at bank Account receivables Inventory (at 31 Dec 2019) Prepayments TOTAL ASSETS 250,000 180,000 380,000 150,000 960,000 15,960,000 Shareholders' Equity Share capital Retained earnings 9,500,000 1,520,000 11,020,000 Non-current liabilities 8.21% loan from Berjaya Bank 4,000,000 Current liabilities Account payables Accruals TOTAL EQUITY & LIABILITIES 840,000 100,000 940,000 15,960,000 Additional information: 1. All the sales are assumed to be on credit basis. 2. There are 360 working days in a year. 3. The opening inventory as at 1 January 2019 amounted to RM350,000 4. The opening balance for account receivables as at the beginning of the year is RM220,000. 5. Based on the total asset, only 50% is being utilized to generate income for the company. 6. The industry average data are given as follows: Ratio 1.50:1 0.80:1 collection 25 days No. Particulars 1. Current ratio 2. Acid test ratio 3. Account receivables period 4. Inventory turnover 5. Inventory turnover days 6. Total asset turnover 7. Gross profit margin 8. Net profit margin 9. Debt ratio 10. Times interest earned 5 times 90 days 2 times 40% 20% 35% 8 times point The inventory turnover of Cuba Jaya is 6 times, describe the best indication for the ratio.* The inventory turnover ratio of Cuba Jaya Bhd is worse than the industry average since it has to sell 6 times more inventories than industry average. The inventory turnover ratio of Cuba Jaya Bhd is better than industry average which means that Cuba Jaya is able to replenish its inventory 6 times as compared to only 5 times of the industry average. The inventory turnover ratio of Cuba Jaya Bhd is better than industry average because the 6 times represent number of times the company is able to collect from account receivables O None of the above statement is correct. Calculate the inventory turnover days of Cuba Bhd. * 1 point 58 days 45 days 48 days 35 days Determine the account receivables collection period in days for Cuba Jaya 1 point Bhd. 20 days 16 days 14 days 40 days The correct statement that describes the company's account receivables collection period. * The length of time from credit sales made until cash is collected from credit customers. The length of time given for credit customers to pay its purchases from the company The length of time the company take to sell its inventories to credit customers None of the above statement is correct. Choose the correct statement to describe the total asset turnover. * 1 point Lower ratio is preferable as it indicate the company is more efficient in generating sales from its usage of assets. One of the efficiency ratios measuring the ability of a firm to effectively use its assets for the generation of sales. Higher ratio means the company has done aggressive marketing & promotion in order to boost sales. None of the above statement is correct. Calculate the total asset turnover for Cuba Jaya Bhd. * 1 point 1.56 times 0.28 times 0.56 times 0 1.28 times
