Q6-3: A business has the following balances in its financial records: Income tax £30,000; Selling & administration expenses £80,000; Revenue £350,000; Interest expenses £15,000; Cost of Sales £190,000. Which of the following is correct?
Question options:
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Gross profit £160,000; Operating profit £80,000; Net profit after tax £35,000 |
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Gross profit £80,000; Operating profit £65,000; Net profit after tax £35,000 |
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Gross profit £160,000; Operating profit £65,000; Net profit after tax £30,000 |
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Gross profit £80,000; Operating profit £65,000; Net profit after tax £35,000 |
Q6-6: ABC buys a smaller company XYZ for a negotiated price of £1 million. XYZ’s assets are valued at £750,000. Assuming goodwill is amortized over 5 years, the value of goodwill in ABC’s Statement of Financial Position at the end of the third year after acquisition will be:
Question options:
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£100,000 |
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£300,000 |
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£150,000 |
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£400,000 |
Q7-1: The difference between ROI and ROCE ratios is due to:
Question options:
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Interest, tax and long-term debt |
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Tax and shareholders’ funds |
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Long-term debt and shareholders’ funds |
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Interest and long-term debt |
Q7-2: Use the following information extracted from ABC’s Income Statement and Balance sheet and match the item with the correct calculation.
Sales £4,200,000; Gross profit £2,700,000; Receivables £630,000; Payables £275,000; Inventory £300,000. ABC calculates its financial ratios based on being open for business 6 days per week for 50 weeks per year.
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__3__ |
5 |
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__2__ |
55 |
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__1__ |
45 |
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1. ABC’s days’ sales outstanding 2. ABC’s inventory turn 3. ABC’s days’ payables outstanding
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Q7-3: A company has capital employed of €1,000,000 and generates a profit after tax of €300,000. The change in return on investment between a Balance Sheet with 60% debt and one with 40% debt is:
Question options:
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From 43% to 60% |
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From 75% to 50% |
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From 50% to 75% |
Q8-2: In a manufacturing business, the completion of production results in the following flow of costs for inventory:
Question options:
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Decrease raw materials and increase finished goods |
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Decrease work in progress and increase cost of sales |
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Decrease work in progress and increase finished goods |
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Decrease finished goods and increase cost of sales |
Q8-3: A business purchases inventory stock on four separate occasions. Purchased 3,500 units at a total cost of €8,050; Purchased 3,000 units at a total cost of €7,110; Purchased 4,000 units at a total cost of €9,600; and Sold 5,995 units at a total price of €24,760. Each purchase was completed in the order provided within the same period. Match the inventory method with the correct cost of sales and the correct value of inventory.
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__3__ |
€13,963 |
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__2__ |
€4,082 |
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__4__ |
€3,896.75 |
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__1__ |
€14,148.20 |
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1. weighted average method for cost of sales 2. first in-first out method for cost of sales 3. weighted average method for the value of inventory 4. first in-first out method for the value of inventory |