. : MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 41 PROJECT 7: ACCOUNTING AND FINANCE 1200 QUESTION 1 RATIO ANALYSIS TRANSFORMATION LTD Information extracted from the Statement of Comprehens Income Statement for the past two years 2010) 2019) 2600 000 2 000 000 Cost of sales (1 800 000 11 195 000 Gross Pro 800 000 BO5000 Operating Expenses (425 500 1218 000 Depreciation 25 x 29 000 Other Operating Esperses 390 500 19000 Operating Prot 37400 000 Interest on mortgage loan 138 000 1200009 Net profit before tas 356 300 377000 Income Tax (125600 86250 Net profiter 210 900 290 790 Information extracted from the Statement of Financial Position for the past two years 2019 (R) ASSETS Non-current assets Property, plant and equipment find assets Current assets Inventoriesalding stock Trade & other receivables Cash & Casheets 2 556 550 2 596 550 415 000 150 000 40000 216000 3012550 2 333 000 2333 000 394 000 275 000 87000 22.000 2714000 2000 2019) EQUITY AND LIABILITIES Equity Ordinary share capital issued at RID each Share premium Retained income Non-Current ability Mora, 12 Current liabilities Trade & other payable SARS income ta Shareholders for dividende 1515 540 2750 000 30 000 365 540 250 000 271 000 145 000 11 000 115 000 400 2RSO KO 2 300 000 220 000 300 OOO 292000 200 000 8000 74 000 3942.000 41 PROGRAMME HANDBOOK JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 42 12) ADDITIONAL INFORMATION New shares were issued on the first day of the financial year Interim and firal dividends for the year ended 31 December 2020 amounted to R150 000 Feed assets were sold at carrying (book) value during the year for R220 000 Required 1.1 Calculate the folowing ratios for 2020. Where applicable, round off answers to decimal places 1.1.1 Profit margin 1.1.2 inventory turnover 1.1.3 Return on capital employed 1.1.4 Earnings per share 1.1.5 Earning retention ratio 1.1.6 Current ratio 1.1.7 Debt to quity 12) R3 12) 2.2 Comment briefly but maningfully on the following ration: 2.2.1 2020 2019 Acid test ratio 0-42-1 111 2.2.2 12) Debtor collection period 35 days 28 123 Reumonets 6.6% 42 PROGRAMME HANDBOOK: JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 43 (20 QUESTION 2 FINANCIAL PROJECTIONS Sunglass Hut specialises in manufacturing a particular brand of sunglasses The following Information has been extracted from their projected accounting records for 2000 Sunglasses are sold at a lined price of R40 a pair The estimated sales volume is as follows April,000 units May, 7 000 unts June 8 000 units Management policy is to maintain a closing finished goods inventory each month at a level equal to 30% of the next months budgeted sales. To make one pair of sunglasses, 25 kg of raw material at B5 per kg is required Other production costs per units March 2020 were solow Direct obow, K7 Factory overheads, as . With effect from 01 May 2020, the direct labour costs is cpected to increase by 10% and the factory overheads by 5% 161 REQUIRED 2. Prepare a Production Schedule in units indicating the number of units that must be produced for May 2020 2.2 Calculate the expected total cost of production for May 2020. 2.3 Calculate the expected cost of sales of surglasses for May 2020 191 151 MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 44 QUESTION 3 CASH BUDGET 1201 Micaces. LTD The information provided below was extracted from the accounting record of Miracles Ltd for the financial year ended 11 Aug 2000: R Sales Cost of sales Rent income Salaries and wages Aztverthing Taces and rates Other operating espere 1 350 000 380 000 10270 150 000 35 X 4500 225 000 Additional information 1. Sales are divided equally each month. Sales are expected to increase by 10% for the financial year ending 31 August 2012 2. Fifty percent (50%) of the sales are for cash and the balance is on credit Debtors normally pay their accounts as follows: -40% in the month of sale - 5% one month after the sales - The balance is usually written off debts 3. All inventories are expected to be priced at cost plus 25%. 4. Inventories are kept at a constant level. Al purchases are for cash. 5. In terms of the lease agreement, rent rt is received monthly 6. Advertising is paid for monthly and is estimated to be 10% of each month's purchases invention 1. Salaries and wages will increase by 12% with effect from 01 Detober 2020 Tears and rates are paid monthly 9. Other operating pensare paid for in the month in which they are incurred. 10.0n 31 August 2020 the company's favourable bant balance is R12 000 REQUIRED: Prepare each of the following for September and October 2020 from the information provided above (round of anwen to the nearest whole number 1.1 Debtors collection schedule 10 3.2 Cashbudget (16) 44 PROGRAMME HANDBOOK: JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 45 Project Guidelines . Your project should include a Table of Contents page and a bibliography Text: Arial or Times New Roman (12) Spacing 2% lines. Nii text must be justified at each margin Where applicable, se formats and formules from your study guide Start each question on a new page . Number exh solution according to the numbering in the programme handzook You may make use of a spreadsheetle. Microsoft Excel to assist you only with the construction of tables and formats Solutions generated by software packages will not be marked. No marks will be awarded only the final awers are given for calculations. All relevant working wn. . : MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 41 PROJECT 7: ACCOUNTING AND FINANCE 1200 QUESTION 1 RATIO ANALYSIS TRANSFORMATION LTD Information extracted from the Statement of Comprehens Income Statement for the past two years 2010) 2019) 2600 000 2 000 000 Cost of sales (1 800 000 11 195 000 Gross Pro 800 000 BO5000 Operating Expenses (425 500 1218 000 Depreciation 25 x 29 000 Other Operating Esperses 390 500 19000 Operating Prot 37400 000 Interest on mortgage loan 138 000 1200009 Net profit before tas 356 300 377000 Income Tax (125600 86250 Net profiter 210 900 290 790 Information extracted from the Statement of Financial Position for the past two years 2019 (R) ASSETS Non-current assets Property, plant and equipment find assets Current assets Inventoriesalding stock Trade & other receivables Cash & Casheets 2 556 550 2 596 550 415 000 150 000 40000 216000 3012550 2 333 000 2333 000 394 000 275 000 87000 22.000 2714000 2000 2019) EQUITY AND LIABILITIES Equity Ordinary share capital issued at RID each Share premium Retained income Non-Current ability Mora, 12 Current liabilities Trade & other payable SARS income ta Shareholders for dividende 1515 540 2750 000 30 000 365 540 250 000 271 000 145 000 11 000 115 000 400 2RSO KO 2 300 000 220 000 300 OOO 292000 200 000 8000 74 000 3942.000 41 PROGRAMME HANDBOOK JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 42 12) ADDITIONAL INFORMATION New shares were issued on the first day of the financial year Interim and firal dividends for the year ended 31 December 2020 amounted to R150 000 Feed assets were sold at carrying (book) value during the year for R220 000 Required 1.1 Calculate the folowing ratios for 2020. Where applicable, round off answers to decimal places 1.1.1 Profit margin 1.1.2 inventory turnover 1.1.3 Return on capital employed 1.1.4 Earnings per share 1.1.5 Earning retention ratio 1.1.6 Current ratio 1.1.7 Debt to quity 12) R3 12) 2.2 Comment briefly but maningfully on the following ration: 2.2.1 2020 2019 Acid test ratio 0-42-1 111 2.2.2 12) Debtor collection period 35 days 28 123 Reumonets 6.6% 42 PROGRAMME HANDBOOK: JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 43 (20 QUESTION 2 FINANCIAL PROJECTIONS Sunglass Hut specialises in manufacturing a particular brand of sunglasses The following Information has been extracted from their projected accounting records for 2000 Sunglasses are sold at a lined price of R40 a pair The estimated sales volume is as follows April,000 units May, 7 000 unts June 8 000 units Management policy is to maintain a closing finished goods inventory each month at a level equal to 30% of the next months budgeted sales. To make one pair of sunglasses, 25 kg of raw material at B5 per kg is required Other production costs per units March 2020 were solow Direct obow, K7 Factory overheads, as . With effect from 01 May 2020, the direct labour costs is cpected to increase by 10% and the factory overheads by 5% 161 REQUIRED 2. Prepare a Production Schedule in units indicating the number of units that must be produced for May 2020 2.2 Calculate the expected total cost of production for May 2020. 2.3 Calculate the expected cost of sales of surglasses for May 2020 191 151 MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 44 QUESTION 3 CASH BUDGET 1201 Micaces. LTD The information provided below was extracted from the accounting record of Miracles Ltd for the financial year ended 11 Aug 2000: R Sales Cost of sales Rent income Salaries and wages Aztverthing Taces and rates Other operating espere 1 350 000 380 000 10270 150 000 35 X 4500 225 000 Additional information 1. Sales are divided equally each month. Sales are expected to increase by 10% for the financial year ending 31 August 2012 2. Fifty percent (50%) of the sales are for cash and the balance is on credit Debtors normally pay their accounts as follows: -40% in the month of sale - 5% one month after the sales - The balance is usually written off debts 3. All inventories are expected to be priced at cost plus 25%. 4. Inventories are kept at a constant level. Al purchases are for cash. 5. In terms of the lease agreement, rent rt is received monthly 6. Advertising is paid for monthly and is estimated to be 10% of each month's purchases invention 1. Salaries and wages will increase by 12% with effect from 01 Detober 2020 Tears and rates are paid monthly 9. Other operating pensare paid for in the month in which they are incurred. 10.0n 31 August 2020 the company's favourable bant balance is R12 000 REQUIRED: Prepare each of the following for September and October 2020 from the information provided above (round of anwen to the nearest whole number 1.1 Debtors collection schedule 10 3.2 Cashbudget (16) 44 PROGRAMME HANDBOOK: JANUARY 2020 INTAKE MANCOSA: HIGHER CERTIFICATE IN BUSINESS MANAGEMENT 45 Project Guidelines . Your project should include a Table of Contents page and a bibliography Text: Arial or Times New Roman (12) Spacing 2% lines. Nii text must be justified at each margin Where applicable, se formats and formules from your study guide Start each question on a new page . Number exh solution according to the numbering in the programme handzook You may make use of a spreadsheetle. Microsoft Excel to assist you only with the construction of tables and formats Solutions generated by software packages will not be marked. No marks will be awarded only the final awers are given for calculations. All relevant working wn