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McKie Ltd has presented you with the following balances for the year ended September 3 0 , 2 0 2 3 : $ $ Creditors
McKie Ltd has presented you with the following balances for the year ended September : $ $ Creditors Sales Revenue Land at cost Building at cost Furniture and fittings at cost Bank Provision for Depreciation Buildings Furniture and fittings Discounts Retained Earnings at Oct Provision for bad debts Goodwill Cash Inventory at Oct Rent Receivedfrom Breezy Ltd Rent Wages and Salaries Insurance Carriage Inwards Returns Commission received Mortgage Other Operating Expenses Debtors Purchases Debenture Interest Mortgage Interest Bad debt Debentures Preference Shares @ $ Ordinary Shares @ $ General Reserves Interim ordinary dividends paid The following additional information is available: At September closing inventory was $ The Accountant has determined that the estimate for the provision for bad debts at September is of debtors. At the end of the period it was discovered that one employee was owed $ in salaries while another was overpaid by $ Additionally insurance prepaid was $ The following appropriation of the expenses must be made Admin Selling & Dist Rent Wages & Salaries Insurance Prov. for Depreciation On June the company rented some of its office space to Breezy Ltd At that date Breezy Ltd paid rent covering the next nine months. Depreciation should be provided as follows: Land Nil Buildings percent per year on cost Furniture & Fittings percent per year on reducing balance Goodwill impairment was estimated to be Corporation tax is estimated to be $ The directors proposed on September to pay the final preference dividends. At a board of directors meeting on October the directors evaluated the performance of the business over the past financial year and proposed to pay a further ordinary dividend. Required: a Prepare the following for McKie Ltd for the financial year ending September : i Statement of Profit or Loss marks ii Statement of changes in equity marks iii. Statement of Financial Position. marks b Calculate the following ratios for McKie Ltd: i Current ratio ii Gearing ratio iii. Debt to Equity ratio iv Return on capital employed v Return on shareholders equity marks c Write a report to management on the Liquidity, Solvency, and Profitability of McKie Ltd relative to the industrys performance below: Current ratio : Gearing ratio Debt to Equity : Return on capital employed Return on shareholders' equity marks dInternally generated Goodwill can be recognized in the financial statements under certain conditions. Please discuss the preceding statement making reference to any relevant accounting standard. marks
McKie Ltd has presented you with the following balances for the year ended September :
$ $
Creditors
Sales Revenue
Land at cost
Building at cost
Furniture and fittings at cost
Bank
Provision for Depreciation
Buildings
Furniture and fittings
Discounts
Retained Earnings at Oct
Provision for bad debts
Goodwill
Cash
Inventory at Oct
Rent Receivedfrom Breezy Ltd
Rent
Wages and Salaries
Insurance
Carriage Inwards
Returns
Commission received
Mortgage
Other Operating Expenses
Debtors
Purchases
Debenture Interest
Mortgage Interest
Bad debt
Debentures
Preference Shares @ $
Ordinary Shares @ $
General Reserves
Interim ordinary dividends paid
The following additional information is available:
At September closing inventory was $
The Accountant has determined that the estimate for the provision for bad debts at September is of debtors.
At the end of the period it was discovered that one employee was owed $ in salaries while another was overpaid by $ Additionally insurance prepaid was $
The following appropriation of the expenses must be made
Admin Selling & Dist
Rent
Wages & Salaries
Insurance
Prov. for Depreciation
On June the company rented some of its office space to Breezy Ltd At that date Breezy Ltd paid rent covering the next nine months.
Depreciation should be provided as follows:
Land Nil
Buildings percent per year on cost
Furniture & Fittings percent per year on reducing balance
Goodwill impairment was estimated to be
Corporation tax is estimated to be $
The directors proposed on September to pay the final preference dividends.
At a board of directors meeting on October the directors evaluated the performance of the business over the past financial year and proposed to pay a further ordinary dividend.
Required:
a Prepare the following for McKie Ltd for the financial year ending September :
i Statement of Profit or Loss marks
ii Statement of changes in equity marks
iii. Statement of Financial Position. marks
b Calculate the following ratios for McKie Ltd:
i Current ratio
ii Gearing ratio
iii. Debt to Equity ratio
iv Return on capital employed
v Return on shareholders equity
marks
c Write a report to management on the Liquidity, Solvency, and Profitability of McKie Ltd
relative to the industrys performance below:
Current ratio :
Gearing ratio
Debt to Equity :
Return on capital employed
Return on shareholders' equity
marks
dInternally generated Goodwill can be recognized in the financial statements under certain
conditions. Please discuss the preceding statement making reference to any relevant
accounting standard. marks
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