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Please correct my answer Cuba Jaya Berhad's Statement of Profit or Loss for the year ended 31 December 2019 are as follows: Cuba Jaya Berhad
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Cuba Jaya Berhad's Statement of Profit or Loss for the year ended 31 December 2019 are as follows: Cuba Jaya Berhad Statement of Profit or Loss for the year ended 31 December 2019 2019 RM Revenue 4,500,000 Cost of sales (2,250,000) Gross profit 2,250,000 Administrative expenses 715,000 Distribution cost 400,000 Operating profit 1,135,000 Finance cost (328,400) Investment income 254,900 Profit before tax 1,061,500 Tax expense (297,220) Profit after tax 764,280 Cuba Jaya Berhad Statement of Financial Position as at 31 December 2019 2019 RM Non-current assets Investments Property, plant & equipment RM 5,000,000 10,000,000 Current assets Cash in hand & at bank Account receivables Inventory (at 31 Dec 2019) Prepayments TOTAL ASSETS 250,000 180,000 380,000 150,000 960,000 15,960,000 Shareholders' Equity Share capital Retained earnings 9,500,000 1,520,000 11,020,000 Non-current liabilities 8.21% loan from Berjaya Bank 4,000,000 Current liabilities Account payables Accruals TOTAL EQUITY & LIABILITIES 840,000 100,000 940,000 15,960,000 Additional information: 1. All the sales are assumed to be on credit basis. 2. There are 360 working days in a year. 3. The opening inventory as at 1 January 2019 amounted to RM350,000 4. The opening balance for account receivables as at the beginning of the year is RM220,000. 5. Based on the total asset, only 50% is being utilized to generate income for the company. 6. The industry average data are given as follows: Ratio 1.50:1 0.80:1 collection 25 days No. Particulars 1. Current ratio 2. Acid test ratio 3. Account receivables period 4. Inventory turnover 5. Inventory turnover days 6. Total asset turnover 7. Gross profit margin 8. Net profit margin 9. Debt ratio 10. Times interest earned 5 times 90 days 2 times 40% 20% 35% 8 times Determine the current ratio for Cuba Jaya Bhd in the year 2019.* point 1.22:1 1.02:1 1.23:1 01.12:1 Determine the acid test ratio for Cuba Jaya Bhd in the year 2019.* point 0.44:1 O 0.43:1 0.46:1 0 0.47:1 1 point In comparison with the data from industry average, it was found out that the current ratio for Cuba Jaya Bhd is than the industry average. 0 Better Worse Slightly worse Slightly better The main reason that caused low acid test ratio in Cuba Jaya Bhd was due 1 point to: Low amount of inventory & prepayments High amount of account receivables & account payables Low amount of account receivables & account payables High amount of inventory & prepayments Suggest the way that can be taken by Cuba Jaya to improve the company's 1 point liquidity: * Increase promotion & marketing activities Give discounts to customers and encourage cash sales Write off obsolete inventory Increase level of debt Amongst all, choose the correct statement to explain the efficiency ratios. 1 point Efficiency ratios measure company's ability to pay short-term obligations of one year or less. Efficiency ratios measure the relative amount of funds supplied by equity and debt holders. Efficiency ratios measure a company's ability to use its assets in generating sales. Efficiency ratios measure the firm's efficiency in generating profitsStep by Step Solution
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