Exam (elaborations)
FAC1601 ASSIGNMENT 4 2023 EXPECTED QUESTIONS & SOLUTIONS
- Course
- Institution
FAC1601 ASSIGNMENT 4 2023
[Show more]
Seller
Follow
BMZAcademy
Reviews received
Content preview
BMZ ACADEMYBMZ ACADEMY
@061 262 1185/068 053 8213/0717 513 144
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
, BMZ ACADEMY
The following information relates to questions 1 - 8 below.
Stellenson Limited is logistics company operating from the Port of Richards Bay. The
financial manager of the company, Mr Bucks, has requested assistance in completing
financial statement analysis to be included in the annual report.
The following is information is extracted from the accounting records of Stellenson
Limited as at 29 February 2023, the end of the financial year:
R
Share capital 337,200
Land and buildings 682,200
Share premium 30,000
Loan to director: Stellen 43,200
Retained earnings (1 March 2022) Dr 40,400
Equipment at cost 280,800
Accumulated depreciation: Equipment 36,000
Long-term loan 180,000
Debtors control 86,400
Creditors control 34,600
Sales 604,800
Allowance for settlement discount granted 7,800
Profit for the year 155,600
Additional information
1. The corporation is taxed at a rate of 28%.
2. The long-term loan was obtained on 31 July 2011 and bears interest at a rate of 12%
per annum.
3. The loan to Stellen is interest free and repayable in full on 30 November 2024.
4. The following are some of the ratios as at 28 February 2022:
· Return on equity 37%
· Return on assets 21.81%
· Profit margin 27.2%
· Financial leverage 1.9
Which of the following alternatives represents the correct return on equity for Stellenson
Limited for the year ended 28 February 2023?
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
, BMZ ACADEMY
a.
32.26%
b.
41.34%
c.
47.77%
d. 44.80%
Question 2
Which of the following alternatives represents the correct return on assets for Stellenson
Limited for the year ended 28 February 2023?
a.
22.74%
b.
21.65%
c.
20.61%
d. 21.81%
Question 3
Assume a return on equity and return on assets of 25.25% and 15.65% respectively. Which of
the following alternatives represents the correct financial leverage for Stellenson Limited for
the year ended 28 February 2023?
a. 1.61
b.
1.66
c.
2.05
d.
0.62
Question 4
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller BMZAcademy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.96. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77333 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now