Business Administration Assignment | Online Assignment

OL-DipComBA2 Accounting for Managers – Assignment
Instructions:
1. There are FOUR (4) calculation and reporting questions for this assignment.
2. Answer ALL questions.
3. Each question is worth 25 marks and this assignment will constitute 100% of your overall grades.
4. Submit your answers in Word document format into the eLearn system by 28th May 2020 2359hrs.
Page 2 of 6
Question 1
The following are the unadjusted ledger balances of Luffy Ltd for the year ended 31 December 2026.
Share Capital
1,162,000
Sales
577,000
Trade Payables
62,500
Purchases returns
9,000
General expenses
3,700
Purchases
94,000
Sales returns
4,500
Carriage outwards
8,400
Selling Expense
16,000
Rental expense
25,000
Insurance expense
22,000
Utilities
19,000
Stationery
1,500
Advertising expense
2,500
Salaries
56,000
Cash at Bank
39,000
Inventory at 1st January 2026
44,500
Trade Receivables
60,500
Carriage inwards
4,000
Motor Vehicles at cost
114,000
Land
1,250,000
Plant & Equipment at cost
182,300
Accumulated depreciation – Motor Vehicles
58,400
Accumulated depreciation – Plant & Equipment
78,000
Additional Information for year-end adjustments:
1. Rental for January 2027
$ 4,200
2. Inventory, at December 31, 2026
$ 55,650
3. Irrecoverable debts to be written off
$ 3,300
4. Insurance owing as at December 31, 2026
$ 1,700
5. Selling expenses are owing for the year
$ 2,300
6. Depreciation for the year – Motor Vehicles
10% on NBV
7. Depreciation for the year – Plant & Equipment
20% on Cost
Required:
(a) Prepare an Income Statement for year ended 31 December 2026. (15 marks)
(b) Prepare a Statement of Financial Position as at 31 December 2026. (10 marks)
Page 3 of 6
Question 2
The following information pertains to Zangetsu Ltd:
Zangetsu Ltd
Statement of Financial Position as at December 31 20xx
Assets
2021
2020
Bank
79,300
62,700
Trade receivables
38,700
51,200
Inventory
55,500
43,700
Prepaid Rent
1,500
2,300
Machinery – Net Book Value
125,000
153,900
Total assets
300,000
313,800
Liabilities
Trade Payable
121,200
110,000
Utilities Payable
4,200
3,100
Salaries Payable
25,000
20,200
Total Liabilities
150,400
133,300
Equity
Share Capital
100,000
110,000
Retained earnings
49,600
70,500
Total equity
149,600
180,500
Total liabilities and equity
300,000
313,800
Zangetsu Ltd
Summarised Income Statements as at December 31 20xx
2021
2020
Sales
1,534,000
1,675,500
Less: Cost of Goods Sold
(737,000)
(747,000)
Gross profit
797,000
928,500
Less: Expenses
(656,500)
(772,500)
Net Profit before taxes
140,500
156,000
Page 4 of 6
Required:
(a) Calculate the following ratios for each of the 2 years and show all formulas and necessary workings.
i. Current Ratio
(3 marks)
ii. Quick Ratio
(3 marks)
iii. Trade Receivables Turnover Period
(3 marks)
iv. Trade Payables Turnover Period
(3 marks)
v. Inventory Turnover Period
(3 marks)
vi. Gross Profit Margin
(3 marks)
vii. Net Profit Margin
(3 marks)
(b) From the results of the ratios computed, comment on the liquidity of the business over the last two years.
(4 marks)
Page 5 of 6
Question 3
(a) Yeager Ltd produces a single toy product called Titan. The mixed cost for Titan for the selected months is given below. Utilise the high-low estimation method to answer the following questions.
Units Total Cost
March 400 $36,500
June 250 $35,750
September 200 $35,500
December 350 $36,350
(i) Calculate the variable cost per unit. (3 marks)
(ii) Calculate the fixed cost component of the total cost. (3 marks)
(iii) Estimate the total cost for January in the following year if Yeager Ltd will produce 380 units. (3 marks)
(b) Zenitsu Limited sells a single product, lightning rods to builders and the data is given below:
Selling price $80 per unit
Variable cost $52 per unit
Fixed cost per annum $553,000
(i) Calculate the contribution per unit. (3 marks)
(ii) Calculate the contribution-to-sales ratio and express it in decimal form. (3 marks)
(iii) Calculate the breakeven point in units per annum. (3 marks)
(iv) Calculate the minimum number of units that must be sold if Zenitsu Ltd wishes to earn a profit of $63,000 for the year. (3 marks)
(c) The following are the various cost of Dororo Ltd for the production of 100 prosthetic limbs.
Costs Amount
Direct Labour $152,000
Direct Material $102,500
Fixed Manufacturing Overheads $58,300
Variable Manufacturing Overheads $62,700
Fixed Selling & Administrative Expenses $51,500
Variable Selling & Administrative Expenses $42,800
Total $469,800
Calculate the total product cost using the marginal costing method. (4 marks)
Page 6 of 6
Question 4
Allen Ltd has $2,300,000 to invest in only one of the two projects – Arc or Innocence, that will earn positive cashflows across the next 5 years. The length of both projects is the same and they have the same initial cost. The company has a required rate of return of 11%.
Year Project Arc Project Innocence
0 $(2,300,000) $(2,300,000)
1 $425,000 $1,050,000
2 $449,000 $915,000
3 $555,000 $785,500
4 $778,000 $415,000
5 $999,500 $228,500
Required:
(a) Calculate the payback period for Project Arc and Project Innocence. (8 marks)
(b) Calculate the net present value for Project Arc and Project Innocence. (14 marks)
(c) Advise the management of Allen Ltd on which project they should embark on. (3 marks)
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