Accounting Question

Financial Analysis and Reporting for Coco Sole Trading Firm, Choco Partnership Firm, Not-for-Profit Organization,and Profitability Analysis of Moon Ltd. and Sun Ltd.
Medrar Ahmed
ST11650
Introduction
This report provides a comprehensive analysis of the financial point for unique trade organizations, including
organizations, not-for-profits, and sole dealers. Every chapter covers some basic bookkeeping decisions and is
devoted to the explanations planning. Additionally, an evaluation of the financial performance of both companies
is provided using productivity ratios. For Beyond any doubt Ltd., a cash flow explanation has been set up for the
second half of the year, from June 2023 to December 31st, 2023. Additionally, the budgetary justifications for the
measures, customs, and standards of bookkeeping are set up. The exact display of the solidified financial data
comes from a methodical process that can be applied to the making of administrative decisions. The evaluation of
a trade’s state of well-being and execution are essential. for the partners, the administrators, leasers, supervisors,
and financial experts The actual financial justifications provide the fundamental framework for evaluating a
business’s performance, financial situation, and prospects.
Question 1
P3: Income statement
Coco Sole Trading Firm, Income statements for the year ending 31 Dec 2023
Dr
Cr
OMR
OMR
Sales
7000
Less cost of goods sold:
Opening inventory (stock)
700
+ Purchases
2500
3200
-Closing inventory (stock)
375
Gross profit
2825
4175
Less Expenses:
General expenses
(175)
Advertising expenses
(150)
Salaries and wages (1250 + 500)
(1750)
Insurance expenses (265 – 120)
(145)
Depreciation on Building (5400*10/100)
(540)
Depreciation on Plant and Machinery (560*10/100)
(56)
Debtors (account receivable) (560-450*10%)
11
Net profit
2741
1434
P3: Balance sheet
Trail balance for the year ending 31 Dec 2032
OMR
Non – Current assets:
Building
Less depreciation (250+540)
Plant and Machinery
Less depreciation (450+11)
Current assets:
Inventory (stock)
Debtors (Accounts Receivable)
Less provision for bad and doubtful debts (425*4\100)
Insurance expense prepaid
Cash
Total assets
Non – current liabilities:
Bank Loan
Current liabilities:
Creditors (Account Payable)
Outstanding wages and salaries (accrual)
Capital:
Opening balance (on 1 January 2023)
+Net profit
-Drawings
Total liabilities:
5400
(790)
560
461
OMR
4610
99
375
425
(19.125)
405.875
120
1920
7529.9
200
350
500
5500
1479.9
6979.9
(500)
850
6479.9
7529.9
Question 2: Solution:
Sharif and Naim
Profit and loss appropriation account for the year ending 31 December 2023
OMR
Sales
Less cost of goods sold
Opening inventory (stock)
+ Purchases
-Closing inventory (stock)
Gross profit
Add commission received
Less Expenses
Administration expenses
General expenses
Rent
Commission
150000
90000
240000
(125000)
60000
45900
63000
(2300)
OMR
351381
(115000)
236381
4319
(171200)
Net profit for year
Interest on capital
Sharif
Naim
Salaries:
Naim
Sharif
Net profit:
Naim
Sharif
69500
25000
12500
375000
10000
10000
20000
6000
6000
12000
69500
Sharif and Naim
Balance sheet for the year ending 31 December 2023
OMR
OMR
Non-current assets:
Land
310000
Machinery
30000
Less depreciation (Accumulated)
10000
Furniture
15000
Less depreciation (Accumulated)
1500
20000
13500
Current assets:
Inventory (stock)
125000
Debtors (Accounts Receivable)
125000
Cash
13000
Total assets
263000
606500
Non-current liabilities:
Nil
0
Current liabilities:
Creditors (Account Payable)
Capital accounts:
62000
Sharif
Naim
250000
375000
125000
Current accounts
Opening balance (1 January 2023 )
70000
50000
+ Interest on capital:
25000
12500
+ Salaries
10000
10000
+ Net profit share
– Drawings
6000
6000
111000
78500
10000
101000
Total liabilities
10000
68500
169500
606500
Income and Expenditure Account for the
Receipt and Payments Account
Dr
Cr
Expenditure
OMR
Income
OMR
By Salaries
30000
To Subscriptions collected
3000
By Rent
5000
To Interest on investments
15000
By Printing and Stationery
2000
To Bank interest
200
By Stamps Postage
1100
To sale of car
7500
By Motorbike (purchased)
10000
By Government Bonds
6500
27600
52700
Balance sheet
Liabilities
OMR
Assets
OMR
Rent outstanding
700
Cash in Office
2700
Stationery outstanding
175
Cash at Bank
900
Subscriptions received in advance
2000
Investments
150000
Subscriptions outstanding
800
Motor bike
10000
Government bonds
6500
Capital fund*1 (164000)
Less deficit for the year 4025
168025
170900
Working Note:
170900
Capital fund: (Need to prepare the opening
balance sheet to know the capital fund)
Balance sheet
Liabilities
OMR
Assets
OMR
Rent outstanding
700
Cash in Office
500
Capital fund (Balancing figure)
164000
Cash at Bank
5000
Investments
150000
Subscriptions outstanding
1000
Car
8200
164700
Profitability Ratios
Moon Ltd
164700
Sun Ltd
GPM (Gross\ Profit Sales
Revenue*100
OMP( Profit before interest and
Tax\Sales Revenue*100)
NPN( Profit after Tax\Sales
Revenue*100)
ROE(Profit after Tax\Total*100)
ROE(Profit after Tax\Share
capital*100)
P4:
15000\25000*100= 60%
24000\30000*100= 80%
13000\25000*100=52%
19000\30000*100=63.3%
11565\25000*100=46.26%
16943\30000*100=56.48%
11565\26750*100=43.23%
11565\3000*100=385.50%
16943\26750*100=63.33%
16943\16000*100=105.89&
Ratio Analysis and Comparison of Moon Ltd. and Sun Ltd.
By contrasting important financial ratios, the ratio analysis sheds light on the profitability and soundness of Moon
Ltd. and Sun Ltd.’s finances. In order to assess the effectiveness and performance of both businesses, this section
examines the profitability ratios and conducts both horizontal and vertical analysis.
P5:
Common size Percentages:
Data to calculate profitability ratios
Balance Sheet (figures in OMR)
Non-current (fixed) assets
Current assets
Receivables
Inventory
Total assets
Share capital
10% Loan
Current liabilities (payables)
Total Labilities + Equity
Moon Ltd
12130
Sun Ltd
6800
8000
6620
26750
16000
5,000
5750
26750
13000
6950
26750
3000
17,000
6750
26750
Moon Ltd
45.34%
Sun Ltd
25.42%
29.90%
24.74%
100%
59.81%
18.69%
21.49%
100%
48.59%
25.98%
100%
11.21%
63.55%
25.23%
100%
Common size Percentages:
Income Statement ( figures in OMR)
Sales revenue
Less: Cost of sales
Gross profit
Less: Expenses
Profit before interest &Tax
Less: Interest
Less: Tax 10%
Profit after tax
Moon Ltd
30000
6000
24000
5000
19000
175
18825
1883
16943
Sun Ltd
25000
10000
15000
2000
13000
150
12850
1285
11565
Moon Ltd
100%
20%
80%
16.6%
63.33%
0.58%
62.75%
6.27%
56.47%
Sun Ltd
100%
40%
60%
8%
52%
0.6%
51.4%
5.14%
46.26%
P6:
Particulars
Cash Inflow
Fund from Share
Capital
Sales Realization
(Working 1)
Total Inflow
Jul-23
Aug-23
Sep-23
Oct-23
Nov-23
Dec-23
540,000
140,000
150,000
144,000
162,000
135,000
540,000
140,000
150,000
144,000
162,000
Particulars
Fund from Share
Capital
Sales Realization
(Working 1)
135,000
Cash Outflow
Jul-23
540,000
Total Inflow
Cash
Outflow
Utility Payments
136,000
136,000
Equipment
purchase
Salary
Equipment purchase
300,000
55,000
55,000
Purchase
payment
Depreciation
Total Outflow
55,000
55,000
55,000
55,000
164,000
172,000
188,000
120,000
Salary
Purchase payment
227,000
55,000
191,000
519,000
65,000
18,000
Opening Balance
485,000
434,000
379,000
-235,000
Opening
Balance
Net Cash flow
485,000
51,000
369,000
83,000
Closing Balance
485,000
434,000
65,000
217,000
18,000
110,000
Net Cash
flow
-125,000
-235,000
FORECATED CASH RECEIPT FROM SALES
Sales
23-Jul
Jul-24
140000
23-Aug
150000
23-Sep
160000
23-Oct
180000
23-Nov
150000
23-Dec
130000
23-Aug
23-Sep
23-Oct
23-Nov
23-Dec
24-Jan
140000
150000
144000
180000
150000
910000
130000
Total collected
140000
Purchases month
Jul-24 164000
23-Aug 172000
23-Sep 188000
23-Oct 120000
23-Nov 120000
23-Dec 120000
884000
23-Jul
Payment to Suppliers
23-Aug
23-Sep
05-Jan
150000
23-Oct
144000
23-Nov
180000
23-Dec
150000
24-Jan
130000
24-Feb
172000
188000
120000
120000
120000
0
0
164000
172000
188000
120000
120000
P7:
Examine the benefits and confinements of budgets and budgetary arranging, and control for an association.
Benefits of Budgets and Budgetary Arranging and Control.
Estimating and Arranging for Fund:
Asset Allotment: Budgets help organizations in successfully apportioning assets, ensuring that stores are accessible
for basic errands.
Budgets make it conceivable to oversee cash stream more viably by helping within the expectation of
either an overflow or deficiency of stores.
Assessment of Execution
Benchmarking Budgets offer stand anta by execution appraisal cashier which oval execution e can be compared,
making Responsibility Budgets hold supervisors and offices accountshle by setting up money related gnosis.
Alignment or a key level:
Setting Objectives: To ensnare persuasive advance, hedges help in planning departmental objectives with the
organization’s overarching key objectives
Privatization: They bolster the method of positioning assignments and mutations in connection to key objectives
Limitations on Budgets and the Inflexibility of Budgetary Arranging and Control
Need of Adaptability: Tight budgets can make it challenging to adopts four unforeseen opportunities or changes
Rigidity in Energetic Environment Budgets may level their relevance rapidly in environesents that alter rapidly
Behavioral Problem: crested slack and make it enosis to meet budgetary goal, managing may Budgetary Shack r
crested slack and propose fully overestimate costs or belittle Premier and Push Unlikely budgetary god may pat
specialists and intemperate some and stress, which seem lower assurance and reduce yield.
Conclusion:
The monetary discoveries and announcing talked about in this report disclose a few vital viewpoints of the
budgetary wellbeing and execution of Coco Corp, Choco Companionship Ltd. and, a not-for-profit organization, as
well as the comparative investigation of the benefit of Moon and Sun. In general, we have done the money related
status of each substance by planning the pay articulations, adjust sheets, and cash stream articulations. The
productivity proportion, the liquidity proportion, and the dissolvability proportion are a few of the essential
information which gives a clear understanding of the company’s productivity, liquidity and dissolvability, thus
superior choice making and arranging of methodologies. The change and note-taking are to ensure that the
numbers are correct and exact, beneath the benchmarks of bookkeeping. This exact approach assures that the
data given within the budgetary reports will empower partners to create well-informed choices approximately
their potential venture.
Reference:
Dimitrova, M., 2020. Financial liquidity of agricultural holdings. Trakia Journal of Sciences, 18(1), pp.634-639.
Mithas, S., Tafti, A., Bardhan, I. and Goh, J.M., 2012. Information technology and firm profitability: mechanisms
and empirical evidence. Mis Quarterly, pp.205-224.
Agustia, D., Muhammad, N.P.A. and Permatasari, Y., 2020. Earnings management, business strategy, and
bankruptcy risk: evidence from Indonesia. Heliyon, 6(2).