Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The managing director of Knox Limited has approached your organisation requesting asubstantial increase in their credit facilities in order to fund an expansion programme. Youare

The managing director of Knox Limited has approached your organisation requesting asubstantial increase in their credit facilities in order to fund an expansion programme. Youare presented with the latest set of abridged accounts below. Knox Limited Profit and Loss Account for the year ended 31 December 20132013 2012 Turnover 8,030 7,300Cost of sales 4,818 4,234Gross profit 3,212 3,066Distribution costs 1,606 1,320Admin expenses 600 4802,206 1,800Operating profit 1,006 1,266Interest 200 200Profit before tax 806 1,066Tax 286 372Profit attributable to shareholders 520 694Dividend 320 400Retained profit 200 294Balance sheet as at 31 December 20132013 2012 Fixed assetsPlant and machinery 4,000 3,960Current assetsStocks 1,800 1,392Debtors 960 800Bank 40 2382,800 2,430Current liabilitiesTrade creditors 520 200Proposed dividend 320 400Taxation 160 170Accruals 100 1201,100 890Net current assets 1,700 1,5405,700 5,50010% debenture 2,000 2,000Financed by: 3,700 3,500Ordinary shares of 1 900 900Retained profit 2,800 2,6003,700 3,500

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

Computer Accounting

Authors: Donna Kay

14th Edition

007762453X, 9780077624538

More Books

Students also viewed these Accounting questions