(a)[4]
Prepare the income statement for AB Limited for the year ended 30 April 2016, showing as much detail as you can.
(b)[2]
Suggest two reasons why the balance on a retained earnings account might be less than the profit for the year.
(c(i))[2]
Calculate the inventory turnover rate to two decimal places.
(c(ii))[2]
Calculate the liquid (acid test) ratio to two decimal places.
(c(iii))[2]
Calculate the trade payables turnover in days.
(d)[6]
Discuss the performance of AB Limited by comparing the ratios you calculated in part (c) with the ratios for XY Limited.
(e)[4]
Advise the directors of CD Limited on which company they should supply. Give reasons for your answer.
(f)[4]
Calculate the revised profit for the year ended 30 April 2017, shown below.
(g)[4]
Explain how a capital reserve differs from a revenue reserve.