You have been provided with the following information for City Projects Ltd:Statement of Comprehensive Income for the year ended 31 March 2021RRevenue (all credit)Gross profitOperating profitInterest expense610 000390 000170 00017 000|Profit before tax153 000Net profit after tax110 000Statement of Financial Position as at 31 March 2021RRAssetsNon -current assets700 000Current assets340 000Inventory70 000REGENT BUSINESS SCHOOL (RBS) JANUARY 202216POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT - ACADEMIC AND ASSESSMENT CALENDARDebtors150 000Bank120 0001 040 000Equity and LiabilitiesOwners' equity600 000Non-current liabilities300 000Current liabilities140 0001040 000Required:Calculate and comment on each of the following ratios (where applicable round off answers to twodecimal places):4.1 Gross margin4.2 Current ratio4.3 Acid-test ratio

Answer: Gross margin = Gross profit/ revenue Current ratio= Current assets/ Current liabilities…

Statement of Comprehensive Income for the year ended 31 March 2021 Revenue (all credit) Gross profit Operating profit Interest expense Profit before tax Net profit after tax R 610 000 390 000 170 000 17 000 153 000 110 000

Statement of Comprehensive Income for the year ended 31 March 2021 Revenue (all credit) Gross profit Operating profit Interest expense Profit before tax Net profit after tax R 610 000 390 000 170 000 17 000 153 000 110 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

You have been provided with the following information for City Projects Ltd:
Statement of Comprehensive Income for the year ended 31 March 2021
R
Revenue (all credit)
Gross profit
Operating profit
Interest expense
610 000
390 000
170 000
17 000|
Profit before tax
153 000
Net profit after tax
110 000
Statement of Financial Position as at 31 March 2021
R
R
Assets
Non -current assets
700 000
Current assets
340 000
Inventory
70 000
REGENT BUSINESS SCHOOL (RBS) JANUARY 2022
16
POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT - ACADEMIC AND ASSESSMENT CALENDAR
Debtors
150 000
Bank
120 000
1 040 000
Equity and Liabilities
Owners' equity
600 000
Non-current liabilities
300 000
Current liabilities
140 000
1040 000
Required:
Calculate and comment on each of the following ratios (where applicable round off answers to two
decimal places):
4.1 Gross margin
4.2 Current ratio
4.3 Acid-test ratio

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