Prepare a detailed statement of profit or loss for year end

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Reference no: EM132369660

CASE STUDY-ONE

The following values relate to various ratios determined for a sole trader, Akuna Smith, for the year ended 30 June 2019. At that date, the total assets in the Balance Sheet was $1 200000. The ratios relate to the accounts either in respect of the 12-month period or at the date
of the statement of financial position for the end of the period.

1. Profit to total assets 15%

2. Current ratio 2.5:1

3. Acid-test ratio 2:1

4. Credit sales to trade accounts receivable 7.5:1

5. Gross profit to total sales 25%

6. Trade accounts payable to purchases 40%

7. Credit sales to total sales 75%

8. Profit margin 10%

9. Profit to equity at the beginning of the year 30%

10. Non-current assets to current assets 10%

Required

Assuming there are no prepaid expenses and that trade accounts payable are the only liability, and rounding answers to the nearest dollar, prepare:

1. A detailed statement of profit or loss for the year ended 30 June 2019, including an itemised cost of sales calculation (assuming a periodic inventory system)

2. A statement of financial position as at 30 June 2019.

Note: (show all your working)

Assuming there are no prepaid expenses and that trade accounts payable are the only liability, and rounding answers to the nearest dollar, prepare.

Reference no: EM132369660

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