INCOME STATEMENT OF ABC LTD FOR THE YEAR ENDING 31 DECEMBER 2019 R 000 Net sales 4 Less: Cost of sales 000 Gross profit Less: Operating costs 2 500 500 1 Depreciation 200 500 Operating profit Less: Interest on mortgage bond - 0700 Profit before tax Less: Income tax (50%) 800 Net profit after tax 80 Less: Preference dividends Profit accruing to ordinary shareholders 720 Less: Ordinary dividends 360 Retained earnings 360 50 310 210 100 BALANCE SHEET OF ABC LTD AS AT 31 DECEMBER 2019 R 000 Fixed assets R 000 Shareholders' capital 1 1 1 000 Land and buildings 400200 Ordinary Plant and issued shares equipment 400 (200 000 @ Minus: R5) Retained Depreciation_ 600 earnings Owners' Current equity assets Preference Cash share capital 400 1 400 300 400 Depreciation 600 Retained earnings 1 400 Current assets Owners' equity Preference share capital 300 Cash 5002 Debtors Inventory 000Shareholders' 700 interest 700 600 300 800 Long-term liability 100500 Mortgage bond 1 000 Current liabilities Trade creditors Bank overdraft creditors Bank overdraft Arrear expenses 3 3. 200 200 Only provide the answers to the ratios for ABC Ltd: a) acid test ratio (2) b) current ratio (2) c) debt ratio (2) d) gross profit margin (2) d) net profit margin (2) INCOME STATEMENT OF ABC LTD FOR THE YEAR ENDING 31 DECEMBER 2019 R 000 Net sales 4 Less: Cost of sales 000 Gross profit Less: Operating costs 2 500 500 1 Depreciation 200 500 Operating profit Less: Interest on mortgage bond - 0700 Profit before tax Less: Income tax (50%) 800 Net profit after tax 80 Less: Preference dividends Profit accruing to ordinary shareholders 720 Less: Ordinary dividends 360 Retained earnings 360 50 310 210 100 BALANCE SHEET OF ABC LTD AS AT 31 DECEMBER 2019 R 000 Fixed assets R 000 Shareholders' capital 1 1 1 000 Land and buildings 400200 Ordinary Plant and issued shares equipment 400 (200 000 @ Minus: R5) Retained Depreciation_ 600 earnings Owners' Current equity assets Preference Cash share capital 400 1 400 300 400 Depreciation 600 Retained earnings 1 400 Current assets Owners' equity Preference share capital 300 Cash 5002 Debtors Inventory 000Shareholders' 700 interest 700 600 300 800 Long-term liability 100500 Mortgage bond 1 000 Current liabilities Trade creditors Bank overdraft creditors Bank overdraft Arrear expenses 3 3. 200 200 Only provide the answers to the ratios for ABC Ltd: a) acid test ratio (2) b) current ratio (2) c) debt ratio (2) d) gross profit margin (2) d) net profit margin (2)