Question 1 and 2

Question One You have been approached by the owner of a local retailer Berrimah Stores Pty Ltd to givethem advice on how their business is performing. You have been provided with a copy of the following draft financial statements. Berrimah Stores Pty Ltd Statement of profit or loss For the year ended 30" June 2021 Sales revenue $607,500 Cost of sales 440,100 Gross profit 167,400 Expenses 97.200 Profit (after interest expenses $3,402 and income $70,200 tax $34,020) Berrimah Stores Pty Ltd Statement of financial positionas at 30th June 2021 Current assets Cash $9,612 Accounts receivables $161,595 Less: Allowance for doubtful debts 10.206 151,389 Inventories 136,080 Total current assets 297,081 Non-current assets Land 34,020 Building 122,040 Less: Accumulated depreciation 20.412 101,628 Fixtures and fittings 25,515 Less: Accumulated depreciation 14,714 10,801 Total non-current assets 146,449 Total assets $443.530 Current liabilities Accounts payable $146,286 Income tax payable 15,650 Accruals 6,804 Total current liabilities 168,740 Non-current liabilities Mortgage loan 34,020 Total liabilities $202,760 Equity Share capital: 6% preference shares $27,000 Ordinary shares 136,080 Retained earnings 77.690 Total equity 240,770 Total liabilities and equity $443.530You have also been provided with the following additional information: Statement of financial position (extract)as at 30th June 2020 Accounts receivables $170, 100 Allowance for doubtful debts (15,309) Inventories 119,070 Total assets 407,700 Total equity 194,940 Required: Perform a ratio analysis to identify: a. the entity's earning ability by calculating the ROE, ROA, Profit margin and the Grossprofit margin, b. how the business has financed its asset purchases by using equity with the debt ratio, c. the length of time in days that it takes to collect the accounts receivable, d. how long measured in days the inventory stays on the shelves before it is sold, e the ability of the business to use short term resources to meet its immediate liabilities ifthere are unanticipated financial demands, f. the ability of the entity's profits to cover the interest payments. Question Two During the COVID-19 crisis Ben lost his job and decided to put his savings into a new business called Top End Walkabout Tours. Once the internal travel restrictions were lifted, he intended to make the most of the NT tourist boom by providing the local hotels with customised travel experiences in and around the Top End. He drew up an estimate of his original cash outlay, income and expenses for the threemonths to the 30th June 2021. April May June Capital investment $83,200 Fees charged (on credit) 26,551 $32,035 $41,847 Fees collected 15.007 19.625 29,437 Office equipment 19,913 Administration expenses 3,175 3,175 3,175 Advertising and 7,215 5,772 3.463 marketing Monthly cash drawings 3,463 3,463 3,463 Office rent 4,618 4,618 4,618 Required a. Prepare a monthly cash budget for the three months ending 30th June, 2021. b. Prepare a variance report for April 2021 incorporating the following information:Fees received $10,920 Office equipment 21,320 Cash drawings 6,760 All other cash items agreed with the original budget