BPL1114 Basic Accounting for Lawyers
Exercise Questions (Topic 9)
1. The following figures are for ABC Sdn. Bhd. at 31 Dec 2023:
RM
Sales 2,500,000
Cost of goods sold 1,523,000
Gross Profit 977,000
Expenses 778,000
Net Profit 199,000
Current assets:
Stock/Inventories 250,000
Receivables 120,000
Bank 150,000
Current liabilities 280,000
Calculate the following ratios: (show your workings)
a) Current ratio
b) Acid-test ratio
c) Gross profit as a percentage of sales
d) Net profit as a percentage of sales
e) Inventory turnover
Formula Workings
a)Current ratio Current Assets/Current Cl inv+AR+Bank
Liability CL
RM250,000+120,000+150,000
280,000
= RM520,000
280,000
=1.85: 1
b)Acid test ratio Current Assets-closing
inventory/Current Liability
c)Gross profit as (Gross profit/sales) x 100% RM977,000 * 100
a percentage of 2,500,000
sales: =39.08%
d)Net profit as a (Net Profit/Sales) x 100%
percentage of
sales
e)Inventory cost of sales / average Avg inv= Op inv+Cl inv
turnover inventory 2
= COGS
Avg inv
1
2. Use the financial statement of XYZ Ltd. to satisfy the following requirements:
RM RM
Statement of profit or loss:
Sales 40,000
Less: cost of goods sold
Opening stock 12,500
Add Purchases 25,000
37,500
Less Closing stock/inventory 7,500 30,000
Gross profit 10,000
Less Depreciation 500
Other expenses 4,500 5,000
Net profit 5,000
(Extracts of statement of financial position)
Current assets
Stock 7,500
Debtors/accts receivable 10,000
Bank 5,000 22,500
Current liabilities
Creditors/accts payable 10,000
Calculate the following ratios: (show your workings)
a) Gross profit as percentage of sales
b) Net profit as percentage of sales
c) Accounts receivable/sales ratio (month)
d) Accounts payable/purchase ratio (month)
Formula
a)Gross profit as a (Gross profit/sales) x 100%
percentage of sales:
b)Net profit as a (Net Profit/Sales) x 100%
percentage of sales
c)Accts receivable Debtors: Sales
to sales ratio
d)Accts payable to Creditors: Purchases
purchase ratio
2
3. The following is a summary of Barbara Ltd. for 2022 and 2023.
Statement of financial position as at 31 December
2022 2023
RM RM RM RM
Non-current assets:
Equipment 10,000 16,000
Motor van 1,000 2,000
11,000 18,000
Current assets:
Stock 1,600 1,800
Debtor 100 120
Bank 660 1,440
2,360 3,360
Less current liabilities 1,700 660 1,960 1,400
11,660 19,400
Long term loans 1,600 10,000
10,060 9,400
Share capital
Ordinary shares of RM1 6,000 6,000
Retained profit 4,060 3,400
10,060 9,400
Statement of profit or loss account for the year ended 31 December.
2022 2023
RM RM RM RM
Turnover/Sales 26,720 32,040
Cost of sales/COGS 17,370 20,180
9,350 11,860
Distribution expenses 4,600 5,740
Administration expenses 2,750 7,350 3,340 9,080
Operating profit 2,000 2,780
Interest expense 130 800
Net profit 1,870 1,980
Dividend 600 800
1,270 1,180
Calculate the following ratios by using 2022 and 2023 information:
a) Gross profit as percentage of sales
b) Net profit as percentage of sales (after interest expense)
c) Current ratio
d) Acid test ratio
e) Inventory turnover
f) Accounts receivables to sales ratio (days)
3
Formula 2022 2023
a) Gross profit as (Gross profit/sales) x 100%
a percentage of
sales:
b) Net profit as a (Net Profit/Sales) x 100%
percentage of
sales
c) Current ratio Current Assets/Current
Liability
d)Acid test ratio Current Assets-closing
inventory/Current Liability
e)Inventory cost of sales / average
turnover inventory
f)Accts Debtors: Sales
receivable to sales
ratio
g) Debts to total Total debts x 100
asset ratio Total assets
