I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

ended 31 December 20X1?  

A $20,000 

 

B $30,000 

 

C $32,000 

 

D $40,000 

 

(2 marks) 

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PRACTICE QUESTION BANK 

 

509 

96   What will profit be reduced by in the consolidated statement of profit or loss for the year ended 

31 December 20X1?  

A $4,000 

 

B $6,000 

 

C $8,000 

 

D $10,000 

 

(2 marks) 

97 The 

following 

fi

gures related to Sanderstead Co and its subsidiary Croydon Co for the year ended 

31 December 20X9. 

 

Sanderstead Co 

Croydon Co 

 $ 

$ 

Revenue 

 600,000 

 300,000 

Cost of sales 

 (400,000) 

 (200,000) 

Gross profit 

  200,000 

  100,000 

During the year Sanderstead Co sold goods to Croydon Co for $20,000, making a profit of $5,000.  

These goods were all sold by Croydon Co before the year end.  

What are the amounts for total revenue and gross profit in the consolidated statement of profit 

or loss of Sanderstead Co for the year ended 31 December 20X9?  

 Revenue 

Gross 

profit 

A $900,000 

  $300,000 

 

B $900,000 

  $295,000 

 

C $880,000 

  $300,000 

 

D $880,000 

$295,000 

 

(2 marks) 

98 

Z has a current ratio of 1.5, a quick ratio of 0.4 and a positive cash balance. If it purchases 

inventory on credit, what is the effect on these ratios? 

 

Current ratio 

Quick ratio 

A Decrease 

Decrease 

B Decrease 

Increase 

C Increase 

Decrease 

D Increase 

Increase 

(2 marks) 

99 

HJ has an asset turnover of 2.0 and an operating profit margin of 10%. The entity is about to 

launch a new product which is expected to generate additional sales of $1.6m and additional 

profit of $120,000 in its first year. To manufacture the new product HJ will need to purchase 

additional assets of $500,000.