Which stock exchange is the company listed? Mainboard or Catalist?
PRINCIPLES OF ACCOUNTING & FINANCE
2) Assignment Submission
· All answers should be typewritten using Arial size 12 in the solution templates provided.
3) Plagiarism is an academic offence and disciplinary action will be taken for plagiarism.
| FULL NAME | DIPLOMA / GROUP (E.g. DPSS 1) |
Please key in your admin number in the table
| Admin
No. |
||||||||
| 1st | 2nd | 3rd | 4th | 5th | 6th | 7th | Alpha |
| Marks | ||
Question 1 |
20 |
|
Question 2 |
20 |
|
Question 3 |
30 |
|
Question 4 |
30 |
|
TOTAL |
100 |
| Full Name of Student | Admin No. | Date |
Question 1 (20 marks)
Fausi started FitnessPro Pte Ltd on 1 July 2021. The company sells a wide range of health equipment and conducts personal training sessions. The retail shop is located at Tampines and the office is at Ubi.
Fausi prepared the following Profit and Loss Statement and Balance Sheet for the company after 12 months of operations and thinks that there are errors in the statements. He needs your assistance to check and prepare the corrected classified Profit and Loss Statement and Balance Sheet.
| Fausi | |||
| Profit and Loss Statement as at 30 June 2022 | |||
| $ | $ | $ | |
| Sales Revenue | 120,000 | ||
| Accrued Revenue | 4,000 | ||
| Personal Training Fees Revenue | 35,000 | ||
| Gross Profit | 159,000 | ||
| Less: Operating Expense | |||
| Selling Expense | |||
| Salaries Expense (refer to Note 1) | 40,000 | ||
| Accrued Expense | 2,000 | 42,000 | |
| General and Administrative Expense | |||
| Interest Expense | 3,700 | ||
| Rent Expense (refer to Note 2) | 36,000 | ||
| Shares in Singtel | 10,000 | ||
| Delivery Van Expense | 4,000 | ||
| Depreciation – Delivery Van | 3,000 | 56,700 | |
| Financial Expense | |||
| Prepaid Expense | 3,100 | ||
| Bank Charges | 400 | ||
| Telephone Expense | 2,000 | 5,500 | 104,200 |
| Net Profit | 54,800 |
| Fausi | |||
| Balance Sheet for the year ended 30 June 2022 | |||
| Equity | $ | $ | $ |
| Capital | 55,000 | ||
| Add: Net Profit | 54,800 | ||
| Less: Drawings | 6,000 | ||
| 103,800 | |||
| Represented by: | |||
| Current Assets | |||
| Cash at Bank | 17,600 | ||
| Inventories | 38,000 | ||
| Accounts Payable | 12,350 | ||
| Delivery Van | 30,000 | ||
| Add: Accumulated Depreciation – Delivery Van | 9,000 | 39,000 | |
| 106,950 | |||
| Less: Current Liabilities | |||
| Loan from BOA (due 1 Jul 2024) | 40,000 | ||
| Accounts Receivable | 21,050 | 61,050 | |
| Working Capital | 45,900 | ||
| Non-Current Assets | |||
| Cost of Goods Sold | 60,500 | ||
| Unearned Revenue | 6,000 | 66,500 | |
| Total Assets | 112,400 |
Additional Information
1) A0% (A is the 4th digit of your admin number) of the salaries are for salesmen and the remaining are for office staff.
e.g. if your admin number is 2112345J, then the figure is 20%
if your admin number is 2103202J, then the figure is 30%
if the 4th digit of your admin number is 0 (e.g. 2100002J), then use 40%
2) Rent expense of $B,000 (B is the 5th digit of your admin number) is used for the shop and the remaining is for the office.
e.g. if your admin number is 2123456J, then the figure is $4,000
if your admin number is 2123567J, then the figure is $5,000
if the 5th digit of your admin number is 0 (e.g. 2100002J), then use $5,000.
| Profit and Loss Statement | |||
| $ | $ | $ | |
(9 marks)
|
Balance Sheet |
|||
| $ | $ | $ | |
(11 marks)
Question 2 (20 marks)
Read the article (https://www.businesstimes.com.sg/companies-markets/shares-of-econ-healthcare-close-36-higher-than-its-ipo-price-on-catalist-relisting) on Econ Healthcare (Asia) Limited’s initial public offering (IPO) and answer questions (i) to (v):
| i) Which stock exchange is the company listed? Mainboard or Catalist? (2m) |
|
|
| ii) When were the company’s shares first publicly traded on the stock exchange? (1m) |
|
|
| iii) What was the IPO issue price? (1m) |
|
|
| iv) How much net proceeds was raised from this IPO? (1m) |
|
|
| v) How did the company plan to use the proceeds? (1m) |
|
|
| vi) Assuming that the company is planning to raise S$8 million for future expansion, propose a suitable source of financing to management and give reasons.
You are to quote the source of information (e.g. printscreen from website, annual report, etc.) (14 marks) |
Question 3 (30 marks)
Kimly Limited and Sheng Siong Group Ltd are public companies limited by shares.
About Kimly Limited
Kimly Limited is one of the largest traditional coffee shop operators in Singapore. The Group operates and manages an extensive network of coffee shops, food courts and industrial canteens.
About Sheng Siong Group Ltd
Sheng Siong Group Ltd is principally engaged in operating the Sheng Siong groceries chain. Its stores are primarily located in retail locations in the heartlands of Singapore.
Note
· Students with an even register number will answer questions related to Kimly Limited.
· Students with an odd register number will answer questions related to Sheng Siong Group Ltd.
· Students who do not do the assigned company will be heavily penalised.
| Company Assigned |
a) Refer to the company’s financial statements in the annual report for 2021 and compute the following financial ratios. Show your workings and round your figures to 2 decimal places.
| Ratio | 2021 | 2020 |
| Net Profit Margin (%)
(use Profit for the Year) |
||
| Current Ratio
(use Group figures) |
||
| Debt Ratio (%)
(use Group figures) |
(18 marks)
b) Comment on the ratios calculated in part (a).
|
|
(12 marks)
Question 4 (30 marks)
Armour Security Pte Ltd sells home security systems. As at 1 October 2022, the cash at bank balance is $210,000. The company’s policy is to maintain a minimum cash balance of $160,000.
The company is developing a cash budget for October, November and December 2022, and the following information was gathered:
| Cash Receipts | |
| 1 | Sales revenue for August and September 2022 are $200,000 and $180,000 respectively. The forecasted sales revenue for October, November and December 2022 are $220,000, $250,000 and $280,000 respectively.
Historically, 70% of the firm’s sales are in cash, 20% are collected in the next month, and the remaining 10% are collected in the second month following the sale. |
| 2 | Monthly commission income is received from the wholesaler based on C% of the current month’s sale (C is the 6th digit of your admin number).
(Use 6% if the 6th digit of your admin number is 0) |
| 3 | Dividend income of $8,000 will be received in November 2022. |
| Cash Disbursements | |
| 4 | The expected purchases are $140,000, $160,000 and $170,000 for the months of October, November and December 2022 respectively. The company pays all its purchases in the month of purchase. |
| 5 | Salaries paid monthly is $D0,000. (D is the 7th digit of your admin number)
(Use $70,000 if the 7th digit of your admin number is 0) |
| 6 | Rental of $9,000 is paid monthly. |
| 7 | Payment for an overseas investment of $300,000 and $400,000 are expected to be made in November and December 2022 respectively. |
Use the following templates to prepare the cash budget for October, November and December 2022:
a) Projected Cash Receipts
| Receipts | Aug
$ |
Sep
$ |
Oct
$ |
Nov
$ |
Dec
$ |
| Sales | 200,000 | 180,000 | 220,000 | 250,000 | 280,000 |
| Cash sales (70%) | |||||
| Lag 1 month (20%) | |||||
| Lag 2 months (10%) | |||||
| Commission income (C%) | |||||
| Dividend income | |||||
| Total Cash Receipts |
(13 marks)
b) Projected Cash Disbursements
| Disbursements | Oct
$ |
Nov
$ |
Dec
$ |
| Cash purchase | |||
| Salaries ($D0,000) | |||
| Rental | |||
| Investment | |||
| Total Cash Disbursements |
(8 marks)
c) Cash Budget
| Oct
$ |
Nov
$ |
Dec
$ |
|
| Total cash receipts | |||
| Less: Total cash disbursements | |||
| Net cash flow | |||
| Add: Beginning cash | |||
| Ending cash | |||
| Minimum cash | |||
| Required Financing | |||
| Excess Cash Balance |
(9 marks)
