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Accounting: Learning Outcome Essay Sample

Accounting: Learning Outcome Pages
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1. Demonstrate knowledge and understanding of concepts, principles and techniques of accounting | Q1 (a, b & c) and Q2| 2. Apply appropriate accounting and financial techniques in the preparation, interpretation and presentation of financial statements,| Q1 (a, b & c)| 3. Apply and evaluate financial techniques for management planning, decision making and control in the short, medium and long term.| Exam

REQUIRED:
(a) Compute the following ratios for 2009, 2010 and 2011: (i) Gross Profit Margin
(ii) Net Profit Margin
(iii) Inventory turnover
(iv) Return on capital employed
(v) Current ratio
(vi) Quick ratio
(vii) Accounts receivable collection period
(viii) Accounts payable payment period
(50 marks)

(b) Comment on the financial results of the company over the last three years, using the ratios you have computed in answer to part (a) of the question. (22 marks)

QUESTION 2

Smith Motor Workshop

Smith Motor Workshop has recently purchased a machine costing $100,000 for its workshop use and expects to use it for 3 years at the end of which
period it will be sold as scrap for $10,000.

Two methods had been proposed:

(i) Depreciation on the straight line method
(ii) Depreciation at 20% on reducing balance method

REQUIRED:

(a) Prepare schedules showing the depreciation charged in each year for three years under the two methods proposed. (6 marks)
(b) Show the value of the asset in the accounts at 31 December in each of the three years under the two methods. (6 marks)
(c) Show the ledger accounts recording the asset, provision for depreciation and depreciation expenses for the three years only, assuming that they have decided on the reducing balance method. (16 marks)

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