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Question 1 The comparative statements of Enchanted Ltd. are presented here. ENCHANTED LTD Statement of profit or loss for the years ended 30 June 2017

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Question 1 The comparative statements of Enchanted Ltd. are presented here. ENCHANTED LTD Statement of profit or loss for the years ended 30 June 2017 Net sales $1,818,500 Cost of sales 1,005,500 Gross profit 813,000 Selling and administrative expense 506,000 Finance costs 18,000 Profit before income tax 289,000 Income tax expense 86,700 Profit for the period $202,300 2016 $1,750,500 996,000 754,500 479,000 19,000 256,500 77,000 $179,500 2016 $64,200 50,000 102,800 115,500 332,500 520,300 $852,800 ENCHANTED LTD Statement of financial position as at 30 June Assets 2017 Current assets Cash $64,900 Marketable securities 100,000 Accounts receivable (net) 150,000 Inventory 200,000 Total current assets 514,900 Non-current assets Property, plant and equipment (net) 625,300 Total assets $1,140,200 Liabilities and equity Current liabilities Accounts payable $150,000 Income taxes payable 43,500 Total current liabilities 193,500 Non-current liabilities Notes payable 210,000 Total liabilities 403,500 Equity Share capital ($5 each) 450,000 Retained earnings 286,700 Total equity 736,700 Total liabilities and equity $1,140,200 $145,000 42,400 187,400 200,000 387,400 300,000 165,400 465,400 $852,800 All sales were on account. Net cash provided by operating activities for the year ended 30 June 2017 was $280,000. The weighted average number of shares is 80,137. Calculate the following ratios for 2017. (Note: For (g) please use the receivables turnover calculated in (f) to calculate the average collection period. For (i) use the inventory turnover calculated in (h) to calculate the average days in inventory.) (Round all answers to 2 decimal places. Use 365 days for calculation.) (a) Earnings per share (b) Return on equity ratio (c) Return on assets ratio (d) Current ratio (e) Quick ratio (f) Receivables turnover times (9) Average collection period days

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