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Hi. I am having problems with this accounting question. Adrian Lee is a recent AMME graduate. A few years ago he launched his new incorporated
Hi. I am having problems with this accounting question.
Adrian Lee is a recent AMME graduate. A few years ago he launched his new incorporated business, ''Meter Marshall''. Adrian is a keen inventor and entrepreneur. He developed a novel current detection & monitoring device as part of his undergraduate thesis project. He soon realised that his thesis work had commercial potential and encouraged by a potential wholesaler, so he ''fine-tuned'' his invention. He then further enhanced the device and then established a distribution agreement to sell the devices through accredited national electrical wholesalers. The ''approved'' device can be attached downstream of the electricity meter to monitor, log and record power usage. Data recorded (and then formatted) from the device can be stored and downloaded via a USB connection. His customer base is growing constantly and they often use the data collected to monitor their individual energy usage. Many of them buy the unit solely to reference consumption against ''energy billing accounts'' issued by the energy provider. From both user perspectives, he has satisfied customers and demand is growing strongly. After the second full trading year, Meter Marshall (MM) is again doing nicely and Adrian now needs to consult outside parties to seek additional funding to grow his small and dynamic business. He has spent most of his time on the technical development of the business. Adrian expects that his potential funding managers will drill him on financial aspects of the business at this meeting. Below is the condensed information on MM for the financial year period: 1 July 2014 to 30th June 2015. The following account balances are accurate as at 30th June 2015 Question 1: From the list of account balances above separate those items that are revenue and expense items. Match these together and calculate the profit Question 2: List the remaining items into asset, liability and equity categories. Add the profit as calculated in question 1, to equity and complete the accounting equation Question 3: Assuming that long-term loans are the only ''external debt'' arrangement, what is the gearing ratio for Meter Marshall at balance date? Question 4: What is the return on Shareholders Funds (equity) for Meter Marshall during the 12-month period, assuming a taxation rate of 39%? Question 5: What is the stock turn ratio for the accounting period, at balance dateStep by Step Solution
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