A construction fim CK Associates started operations on 31 December 2018 by issuing 2.8 million shares...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A construction fim CK Associates started operations on 31 December 2018 by issuing 2.8 million shares of £1 each, and acquiring £150,000 worth of construction plant at the same time. An office building was also acquired at the cost of £680,000 (to be paid in ten annual instalments). The company also purchased £70,000 worth of furniture. It also purchased £60,000 worth of cars using a loan to be paid in full in 2020. £ Million 9.0 8.4 7.7 7.1 7.3 Total for all Contracts Value Cost Certified by client Cash received Cash paid Assuming: 9% fixed interest rate is applied for the loan. • Plant, furniture and cars are to be depreciated over 10 years and the Building over 50 years. Overheads are £82,000. Corporation tax is 21% of profit after interest to be paid in year 2020. • Dividends 3p per share to be paid back sometime in year 2020. • Overheads and interest were paid during the year. Cash value at end of 2019 is £2,192,056. You may ignore any interest to be eamed or paid on cash or overdraft. (a) Draw up the profit and loss account and balance sheet at the end of year 2019. (b) Using any four performance ratios and four financial standing ratios, give advice on the company's performance and financial standing. Propose strategies for a better performance of the company. A construction fim CK Associates started operations on 31 December 2018 by issuing 2.8 million shares of £1 each, and acquiring £150,000 worth of construction plant at the same time. An office building was also acquired at the cost of £680,000 (to be paid in ten annual instalments). The company also purchased £70,000 worth of furniture. It also purchased £60,000 worth of cars using a loan to be paid in full in 2020. £ Million 9.0 8.4 7.7 7.1 7.3 Total for all Contracts Value Cost Certified by client Cash received Cash paid Assuming: 9% fixed interest rate is applied for the loan. • Plant, furniture and cars are to be depreciated over 10 years and the Building over 50 years. Overheads are £82,000. Corporation tax is 21% of profit after interest to be paid in year 2020. • Dividends 3p per share to be paid back sometime in year 2020. • Overheads and interest were paid during the year. Cash value at end of 2019 is £2,192,056. You may ignore any interest to be eamed or paid on cash or overdraft. (a) Draw up the profit and loss account and balance sheet at the end of year 2019. (b) Using any four performance ratios and four financial standing ratios, give advice on the company's performance and financial standing. Propose strategies for a better performance of the company.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
At the same time as new hires were taking place, many retailers were cutting back. Out of 1,000 Kwik Save stores in Britain, 107 were to be closed. Out of 424 Somerfield stores, 424 were to be...
-
At the same time as compound-interest Canada Savings Bonds were being sold with guar- anteed minimum annual rates of 5.25%, 6%, and 6.75% in the first 3 years of their 10-year term, a trust company...
-
On January 20, Metropolitan, Inc., sold 8 million shares of stock in an SEO. The market price of Metropolitan at the time was $42.50 per share. Of the 8 million shares sold, 5 million shares were...
-
STEELCO manufactures two types of steel (steel 1 and steel 2) at two locations (plant 1 and plant 2). Three resources are needed to manufacture a ton of steel: iron, coal, and blast furnace time. The...
-
What are the differences and similarities among audits of financial statements, compliance audits, and operational audits?
-
The following scenarios describe situations currently facing companies. For each scenario, indicate whether a standard costing system would be beneficial in that situation or not and explain why or...
-
Defendants Jack and Claire Lein owned and lived on Willow Creek Farm from 1980 through 2004. The farm manager, Stewart, and his girlfriend, plaintiff Tambra Curtis, also lived on the farm during this...
-
Cost allocation to divisions. Forber Bakery makes baked goods for grocery stores, and has three divisions: Bread, Cake, and Doughnuts. Each division is run and evaluated separately, but the main...
-
Two blocks are fastened to the ceiling of an elevator as in Figure. The elevator accelerates upward at 2.00 m/s. Find the tension in each rope. T 10.0 kg T 10.0 kg
-
Parent owns an 80% interest in Sub and at 12/31/11, Parent's investment in Sub on an equity basis was equal to 80% of Sub's stockholders' equity. During 2012, Sub sells inventory to Parent for...
-
From the following information which relates to George and Zola, prepare a month-by-month cash budget for the second half of 20X5 and make brief comments as you consider might be helpful to...
-
Positrons and beta particles have (1) the same charge and the same mass (2) the same charge and different masses (3) different charges and the same mass (4) different charges and different masses
-
In the circuit shown, the current in the R3 resistor is 13 = 5.2 A, and the current in the R resistor is l = 1.0 A, find the current 1. I E1- A. 6.2 A B. 5.2 A C. 2.2 A D. 8.2 A E. 4.2 A R=52 MM R=...
-
An ion will spontaneously move to an area where it is less concentrated. Ofrom an area of high enthalpy to an area of low enthalpy. wherever a protein pushes it. O toward ions with the same charge
-
sodium bicarbonate is a product of neutralization reaction between sodium hydroxide and carbonic acid. Should not we classify this compound as a salt? or a base?
-
QUESTION 5 (a) Define the term Magnification Factor (MF) and explain why it is important to determine the Magnification Factor (MF) of a system. [CO1/PO1/C2] (5 marks) (b) Figure Q5(a) shows a system...
-
??????? takeover will occur with certainty and all market participants know this. Furthermore, there are no synergies to merging the two firms. c. At current market prices, both offers are offers to...
-
A 2500-lbm car moving at 15 mi/h is accelerated at a constant rate of 15 ft/s 2 up to a speed of 50 mi/h. Calculate force and total time required?
-
What is a contestable market?
-
Illustrate graphically what would happen in the short run and in the long run to the price level and Real GDP if individuals hold rational expectations, prices and wages are flexible, and individuals...
-
Explain how an open market sale decreases the money supply.
-
a. Show that the mean-squared forecast error \(E\left[\left(\hat{y}_{T+1}-y_{T+1} ight)^{2} \mid I_{T} ight]\) for a forecast \(\hat{y}_{T+1}\), that depends only on past information \(I_{T}\), can...
-
Consider the AR(1) model \(y_{t}=\delta+\theta y_{t-1}+e_{t}\) where \(|\theta|)=0\) and \(\operatorname{var}\left(e_{t} \mid I_{t-1} ight)=\sigma^{2}\). Let \(\bar{y}_{-1}=\sum_{t=2}^{T} y_{t}...
-
Consider a stationary model that combines the \(\operatorname{AR}(2)\) model \(y_{t}=\delta+\theta_{1} y_{t-1}+\theta_{2} y_{t-2}+e_{t}\) with an \(\mathrm{AR}(1)\) error model \(e_{t}=ho...
Study smarter with the SolutionInn App