The following information was extracted from the accounting records of Maker plc: Maker ple Trial balance...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following information was extracted from the accounting records of Maker plc: Maker ple Trial balance as at 31 March 2009 Administrative expenses Bank overdraft Delivery vehicles - cost Delivery vehicles - depreciation Factory - cost Factory - depreciation Interest paid Inventory at end of year Long term loan Machinery - cost Machinery - depreciation Manufacturing costs Raw materials consumed Retained earnings as at start of year Running costs for delivery vehicles Sales Share capital Trade payables Trade receivables Wages - administrative staff Wages - delivery drivers Wages - manufacturing staff £m 24 6 380 140 600 64 120 16 600 580 160 34 440 166 80 1,200 220 52 140 42 28 124 The directors had the factory revalued on 1 April 2008. It was valued at £700m, although this valuation has not yet been incorporated into the company's bookkeeping records. Depreciation has yet to be charged on the non-current assets. The following rates are to be used: Factory • Delivery vehicles • Machinery (i) (ii) (iii) 2% of cost or more recent valuation 25% reducing balance 10% of cost Prepare, using the above information, an income statement for the year ended 31 March 2009 and a balance sheet as at that date. [12] [4] Outline the advantages and disadvantages of revaluing the factory. At 1 April 2008 the company had a positive bank balance of £4m. Explain why the change in the balance from the opening figure to that shown in the above trial balance might differ from the profit or loss calculated in your income statement. [4] [Total 20] An equity pays half-yearly dividends. A dividend of d per share is due in exactly 3 months' time. Subsequent dividends are expected to grow at a compound rate of g per half year forever. (i) (ii) If i denotes the annual effective rate of return on the equity, show that P, the price per share, is given by: P= d(1+i)% (1+i)"-(1+g) [3] The current price of a share is £3.60, dividend growth is expected to be 2% per half year and the next dividend payment in 3 months is expected to be 12p. Calculate the expected annual effective rate of return for an investor who purchases the share. [3] [Total 6] The following information was extracted from the accounting records of Maker plc: Maker ple Trial balance as at 31 March 2009 Administrative expenses Bank overdraft Delivery vehicles - cost Delivery vehicles - depreciation Factory - cost Factory - depreciation Interest paid Inventory at end of year Long term loan Machinery - cost Machinery - depreciation Manufacturing costs Raw materials consumed Retained earnings as at start of year Running costs for delivery vehicles Sales Share capital Trade payables Trade receivables Wages - administrative staff Wages - delivery drivers Wages - manufacturing staff £m 24 6 380 140 600 64 120 16 600 580 160 34 440 166 80 1,200 220 52 140 42 28 124 The directors had the factory revalued on 1 April 2008. It was valued at £700m, although this valuation has not yet been incorporated into the company's bookkeeping records. Depreciation has yet to be charged on the non-current assets. The following rates are to be used: Factory • Delivery vehicles • Machinery (i) (ii) (iii) 2% of cost or more recent valuation 25% reducing balance 10% of cost Prepare, using the above information, an income statement for the year ended 31 March 2009 and a balance sheet as at that date. [12] [4] Outline the advantages and disadvantages of revaluing the factory. At 1 April 2008 the company had a positive bank balance of £4m. Explain why the change in the balance from the opening figure to that shown in the above trial balance might differ from the profit or loss calculated in your income statement. [4] [Total 20] An equity pays half-yearly dividends. A dividend of d per share is due in exactly 3 months' time. Subsequent dividends are expected to grow at a compound rate of g per half year forever. (i) (ii) If i denotes the annual effective rate of return on the equity, show that P, the price per share, is given by: P= d(1+i)% (1+i)"-(1+g) [3] The current price of a share is £3.60, dividend growth is expected to be 2% per half year and the next dividend payment in 3 months is expected to be 12p. Calculate the expected annual effective rate of return for an investor who purchases the share. [3] [Total 6]
Expert Answer:
Answer rating: 100% (QA)
i Income Statement for the year ended 31 March 2009 Revenue Sales 1200m Expenses Administrative expenses 24m Manufacturing costs 34m Wagesadministrati... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these accounting questions
-
Nicolas Drinks Inc. ( Nicolas ) manufactures fizzy drinks such as cola and lemonade as well as other soft drinks and its year end is 3 1 December 2 0 1 7 . You are the audit manager of B&J CPAs LL ....
-
The following trial balance relates to Amethyst as at 31 March 2015: The following information is relevant: 1. After the year end stock take it was discovered that goods worth $4 million, which were...
-
The following information was extracted from Citigroup, Inc.'s 2009 annual report. From letter to shareholders: Financial Strength While Citi started the year as a TARP institution receiving...
-
Select the necessary words from the list of possibilities to complete the following statements. Statements 1. The of SEC registrants selects the company's audit firm. 2. The auditors must assess the...
-
Not-for-Profit Hospital, The Phelps Community Hospital balance sheet as of December 31, 2010, follows. Required a. Record in general journal form the effect of the following transactions during the...
-
Show that, if the mean speed of the molecules in an ideal gas is doubled, the thermodynamic temperature of the gas increases by a factor of four.
-
Determine the horizontal displacement of joint \(B\). Each A992 steel member has a cross-sectional area of \(400 \mathrm{~mm}^{2}\). 5 kN -2 m- 4 kN C B D A 1.5 m
-
Marcus Tube, a manufacturer of high-quality aluminum tubing, has maintained stable sales and profits over the past 10 years. Although the market for aluminum tubing has been expanding by 3% per year,...
-
Stash just bought a used Bianchi bicycle through Offerup, which is an app that connects buyers with sellers. Stash is a bike enthusiast who has traditionally only bought new bikes. This time, wanting...
-
1 2 The Week worksheet contains data for the week of April 5. In cell D7, insert the appropriate date function to calculate the number of days between the Date Arrived and Date Ordered. Copy the...
-
1. List and describe the three types of inventory of a manufacturing company. 2. What is the differences between a perpetual inventory system and a periodic inventory system? 3. Explain the cost and...
-
Prepare a statement of stockholders' equity for Hulu Incorporated for the year ended December 31 using the following data. Note: Amounts to be deducted should be indicated by a minus sign. ....
-
The following table contains financial information for Trumpeter Inc. before closing entries: Cash Supplies Prepaid Rent $13,400 6,000 3,600 Salaries Expense 4,800 Equipment 66,000 Service Revenue...
-
Thermo dynamics reported earnings of $ 8 0 0 , 0 0 0 last year with 2 0 0 , 0 0 0 shares outstanding. On January 1 of the current year, the company issued 3 0 , 0 0 0 new shares. Earnings after tax...
-
TV receives significant dividends income during the tax year. How should she report the dividends income and she has ordinary dividend income in excess of $1500
-
The number of general-aviation aircraft accidents annually from 1975 through 1997 can be modeled as a(x) = 100.6111x + 3967.5587 accidents where x is the number of years since 1975. (a) Calculate the...
-
Assume you are the accountant for Catalina Industries. John Catalina, the owner of the company, is in a hurry to receive the financial statements for the year ended December 31, 20X1, and asks you...
-
The pre-tax profits of Radfern Ltd for the last three years (as reported in its financial statements) have been as follows: Year to 31 August 2016............... 125,000 Year to 31 August...
-
Triangle, a public listed company, is in the process of preparing its draft financial statements for the year to 31 March 2018. The following matters have been brought to your attention: (i) On 1...
-
On 1 October 2017 Pumice acquired the following non-current investments: (i) 80% of the equity share capital of Silverton at a cost of £13.6 million. (ii) 50% of Silverton's 10% loan notes at...
-
A piston-cylinder device contains \(1.2 \mathrm{~kg}\) of saturated water vapour at \(180^{\circ} \mathrm{C}\). Heat is transferred to steam. As a result, steam expands reversibly to a final pressure...
-
Prove that \(C_{P}>C_{V}\), where the notations have their usual meanings.
-
In a chemical process plant, water at 67C is pumped from a storage tank at the rate of 20,000 kg/hr. The motor for the pump expenses work at the rate of 1.5 hp. The water passes through a heat...
Study smarter with the SolutionInn App