Reference no: EM132551614

For the remaining questions, please consider the following transactions that happened in The Dorchester Company Ltd. in 2015 (amounts in £000):

Credit sales amounted to 5,000 (nothing was paid by year-end).

Cash sales amounted to 3,000.

Purchases of inventory (on account) amounted to 10,000 (7,000 were paid by year-end).

Cost of goods sold amounted to 6,000.

Sales and administration expenses (all paid in cash) were 1,450.

At the end of the year, the company paid 50 for the annual interest accrued on a loan.

Depreciation of 100 was recorded at the end of the year.

Problem 1: What is the gross profit of the company?

Option 1: -1,000

Option 2: -2,000

Option 3: 1,000

Option 4: 2,000

Problem 2: What is the Return on Sales (Net profit / Sales) of the company?

Option 1: 5%

Option 2: 6.25%

Option 3: 8%

Option 4: 13.3%

Problem 3: What is the change in cash during the year?

Option 1: -5,500

Option 2: -3,500

Option 3: -500

Option 4: 1,500

Problem 4: What is the change in inventories during the year?

Option 1: 3,000

Option 2: 4,000

Option 3: 6,000

Option 4: 10,000

Problem 5: What is the change in liabilities during the year?

Option 1: 0

Option 2: 400

Option 3: 3,000

Option 4: 7,000

Problem 6: What is the change in total assets during the year?

Option 1: -1,600

Option 2: 3,400

Option 3: 4,400

Option 4: 8,400