Acca financial Accounting (FA) Study Text ac ca (FA)

 

 

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Chapter 23 

KAPLAN PUBLISHING

 

493 

Interpretation of financial statements 

The following information relates to Questions 101 and 102. 

 

20X6 20X5 

 $m 

$m 

Statement of profit or loss (extracts) 

 

 

Operating profit 

550 

360 

Profit before tax 

550 

360 

Statement of financial position (extracts) 

2,000  1,500 

10% loan notes 

500 

500 

101 

What was the return on capital employed for 20X5 and 20X6?

 

 

20X6 20X5 

A 20.0% 18% 

B 20.8% 

15.5% 

C 20.8% 18% 

D 22.0% 

15.5% 

102 

What is the total gearing for 20X5 and 20X6? (Use the debt as a 

percentage of total capital employed method.)

 

 

20X6 20X5 

A 20% 33.3% 

B 25% 25% 

C 80% 75% 

D 20% 25% 

103 

From the following information regarding the year to 31 August 20X6, 

what is the payables payment period? 

 $ 

Sales 50,000 

Cost of sales 

40,000 

Opening inventory 

6,000 

Closing inventory 

3,800 

Payables at 31 August 20X6 

4,750 

________ days 

 

 

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PRACTICE QUESTIONS 

494

 

KAPLAN PUBLISHING

 

104 

From the following information regarding the year to 31 March 20X6, 

what are the current and quick ratios?

 

$

Inventory

5,320

Receivables 

10,420 

Cash at bank 

3,200 

Payables

4,100

Overdraft

3,121

Current ratio 

Quick ratio 

A

2.62

1.89

B

2.62

3.84

C

3.86

2.56

D

4.62

3.32

 105  Sale are $260,000. Purchases are $150,000. Opening inventory is 

$22,000. Closing inventory is $26,000. 

What is the inventory turnover? 

A 5.6 

times 

B 10 

times 

C 7 

times 

D 10.8 

times 

Consolidated statement of financial position 

106  At the 1 January 20X2 Y acquired 75% of the share capital of Z for 

$400,000. At that date the equity capital of Z consisted of 600,000 ordinary 

shares of 50c each and its other components of equity were $50,000. 

The fair value of NCI at the date of acquisition was $100,000. 

In the consolidated statement of financial position of Y and its 

subsidiary Z at 31 December 20X6, what amount should appear for 

goodwill? 

A $150,000 

B $137,500 

C $55,000 

D $110,000 

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Chapter 23 

KAPLAN PUBLISHING

495 

107  Skinny acquired 75% of the equity capital Coltart for $35,000 on 1 January 

20X4. Details of the equity share capital and other components of equity of 

Skinny and Coltart at 31 December 20X6 were as follows: 

Skinny Coltart 

$

$

Share capital 

50,000 

20,000 

Other components of equity 

40,000 

15,000 

At the date of acquisition Coltart had other components of equity of 

$10,000.