pesfesesm (6) peas ee see Shown bdow are the cacently issued summarice financial statements of Harbin, 2 lated entity, forth year ended 30 September 20X7. together with compaatves fr 20%6 and extracts from the Chef Executes report that accompanied ther issue Consoldated statements of profit or loss so 5000 Costof sles (200,000) (150,000) Gros profit 50.00 30,000 Operating expenses (26,000) (22,000) nares cnt (.000) tty Profit before tax 16.000 8,00 Income ax expense (at 25%) (4.000) 2,000) Profit forthe period 32000 6,000, CConslidated statement of financial position 7 06 Noncurrent seats Property, plant and equipment 210.000 sooo Goodwill 1,000 a 220000 $0000 Coerent assets Inventory 23000 15000 Trade recehables 13.000 5000 Bank ni 14000 38000 37000 Total assets 2ss000 127,000 ae KAPLAN PUBLISHINGCONSTRUCTED RESPONSE QUESTIONS - SECTION C uty and ables Equty shares of $1 e2ch, 100,000 Retained earnings 14,000 Non-cverent abilities Current abies rk overcrat 17,000 Trade payables 2,000 Curren tax payable 4000 44000 Total equty and abies 253000 [Extracts fom the Chef Executive's report ighlghtsof Harbin’ performance for he year ended 20 September 20X7 + aminctease in sales reverue of 395 gros profit margin up fom 16.7% to 20% + adoubling ofthe profit fr the period SECTION 100,000 12,000 an200 mm wi 13.000 2000 15000 In response tothe improved position the Board paid a dividend of 10 cents per share in ‘September 2047 3 inereace of 25% onthe previous year” You have sso been provided with the following further iformation. ‘on 4 October 20K6 Harbin purchased the whole of the net asset of Fatima (previously & privat owned entity) for $100 millon. The contnbution of the purchase to Harbin’s resus forthe year ended 30 September 20X7 was. cost of ales Gross profit Operating expenses Profi before tax ‘There were no disposal of noncurrent assets during the yea. KAPLAN PUBLISHING 5000 70000 (40,000) (8.000) 22900FR: FINANCIAL REPORTING 207 2x6 Return on yea-ad capital employed 73% (prof before interest and tax over total ase less cute Hable) Net asst (equal to capital employed) turnover 1216 Net profi (before an) margin aKa. Curent ato 25 Closing inventory holding peried (in dys) 37 Trade ecelvable’ collection period (nda) 16 ‘Trade payable’ payment perog (based on cos of sales) (n days) a 2 Gearing (debt over debt pus equity) Nit Requted: (a) Cateulat the missing ratios fr 20%7, (Smaris) (b) Assess the financial performance and postion of Harbin for the year ended 30 September 20%7 compared to the previous yea. Your answer shoud refer to the information in the Chie Executive's report and the impact ofthe purchase of the net asets of Fats. (a5 marks) (Tota: 20 marks) Ed