Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer all the questions as they are one questions with multiple subparts. I will upvote your effort. Thank you The following is a summary

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Please answer all the questions as they are one questions with multiple subparts. I will upvote your effort. Thank you

The following is a summary of the comparative income statements for the years ended 31 March 2014 and 2015 and the comparative balance sheets as at 31 March 2014 and 2015 for Tom Company Tom Company Comparative Income Statement for the years ended March 31, 2014 and 2015 Net Sales Cost of Goods Sold Gross profit Sales Expenses Depreciation Spending Interest Expenses Administrative Expenses Spending Amount Income Before Tax Income Tax Expenditure Net income 2014 (RM) 4,900,000 3,332,000 1,568,000 539,000 60,000 126,150 514,500 1,239,650 328,350 95,222 233,128 2015 (RM) 5,978,000 4,065,040 1,912,960 687,470 80,000 189,902 538,020 1,495,392 417,568 129,446 288,122 Tom Company Comparative Balance Sheet On March 31, 2014 and 2015 Asset 2014 (RM) 2015 (RM) Current assets: Cash Account not yet received Inventories Prepaid Spend Total Current Assets 155,000 465,000 850,000 95,000 1,565,000 85,250 720,750 1,283,500 109,250 2,198,750 Fixed assets: Land Building Accumulated Depreciation - Buildings Equipment Accumulated Depreciation - Equipment Total Fixed Assets Total Assets 1,125,000 1,250,000 (300,000) 750,000 (100,000) 2,725,000 4,290,000 1,125,000 1,500,000 (350,000) 1,050,000 (130,000) 3,195,000 5,393,750 Liabilities Current liabilities: Accounts Payable Unpaid Notes Unpaid Wages and Salaries Tax Unpaid Total Current Liabilities Long term liability: Bank loan Total Liabilities 250,000 600,000 30,000 52,000 932,000 382,628 900,000 40,000 75,000 1,397,628 750,000 1,682,000 1,200,000 2,597,628 Shareholders' Equity Share Capital Reserves Retained earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity 100,000 900,000 1,608,000 2,608,000 4,290,000 100,000 900,000 1,796,122 2,796,122 5,393,750 Additional information: The following is the ratio analysis for 2014: Profit margin 4.8% Return on owner's equity 9.2% Account receivable turnover 12.2 times Interest coverage ratio 3.60 times (a) Provide a vertical analysis on the Income Statement data for Tom Company for 2015. (b) Calculate the following financial ratios for 2015: i. Profit margin ii. Return on owner's equity 111. Account receivable turnover iv. Interest coverage ratio (c) Comment on the profitability of the company based on the ratio of return on owner's equity and profit margin ratio by making a comparison between the ratio analysis for 2015 with the previous year's analysis

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Teams Dynamics And Efficiency

Authors: Mara Cameran, Angelo Ditillo, Angela Pettinicchio

1st Edition

1032097000, 9781032097008

More Books

Students also viewed these Accounting questions

Question

What is the general process for selecting expatriates?

Answered: 1 week ago