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What is depreciation?
Two depreciation:
- Straight line method :(purchase price-scrap value)/lifetime, default method used to
recognize the carrying amount of a fixed asset evenly over its useful life.
- Reducing balance method :an accelerated depreciation method that records larger
depreciation expenses during the earlier years of an asset's useful life, and smaller ones
in later years.
Long question
Question 1..-cash budget
receipt June July August
Sales RM61000 RM51000 RM68000
ii.(net profit as a percentage of sale/net profit margin) =(net profit before tax/sales)x100%
(liquidity ratio)
iii.Current ratio= current asset/current liability
(efficiency ratio)
V. Inventory turnover (in number of times) = cost of goods sold/average inventories
**average inventories= (opening inventory+closing inventories)/2
Company’s Name
Statement of Financial Position as at……
RM RM RM
Non-current assets
Building XX
Less: Accumulated Depreciation (XX) XX
Machinery XX
Less: Accumulated Depreciation (XX) XX
Office Equipment XX
Less: Accumulated Depreciation (XX) XX XX
Current assets
Inventories (Closing) XX
Trade receivables XX
Fixed Deposit XX
Bank XX
Cash XX
Petty Cash XX
Expenditure paid in advance/Prepaid expenditure XX XX
XX
Equity
Capital as at… (start of accounting period)… XX
Add: Additional capital XX
XX
Add: Net profit/Minus: Loss XX
XX
Less: Drawings (XX)
Capital as at… (end of accounting period)… XX
Non-current liabilities
Loan XX
Current liabilities
Trade payables XX
Bank overdraft XX XX
XX