Use the information provided (first picture) to calculate the Acid test ratio for 2021 and put your answer in the template provided (second picture)
Use the information provided (first picture) to calculate the Acid test ratio for 2021 and put your answer in the template provided (second picture)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Use the information provided (first picture) to calculate the Acid test ratio for 2021 and put your answer in the template provided (second picture)
Transcribed Image Text:Acid test ratio
II
Transcribed Image Text:Chelsea Limited
Statement of Cash Flow
For the Year Ended December 31, 2021
Cash Flow from Operating Activities:
Profit before Interest and Tax
$1,024,000
Use the information provided below to prepare the Cash Flow Statement of Chelsea Limited for the year ended 31
LIST OF BALANCES FROM THE STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:
December 2021.
Adjustments for non cash Items:
2021 (R)
2020 (R)
INFORMATION
Depreciation on buildings
2$
96,000
Depreciation on plant and machinery
$ 160,000 $ 256,000
Land and buildings
1 760 000
1 504 000
PEPSICO LIMITED
Changes in Working Capital:
Plant and machinery
992 000
848 000
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER:
Decrease in Inventories
16,000
$ (152,000)
$ (64,000) $ (200,000)
Increase in Accounts Receivable
2021 (R)
2020 (R)
Investments
240 000
Decrease in Accounts Payable
Sales
3 312 000
2 800 000
Inventories
384 000
400 000
Cash Flow from Operations
$1,080,000
$ (64,000)
$ (192,000)
Less: Interest Paid
Cost
sales
(1616 000)
(1 560 000)
Accounts receivable
408 000
256 000
Less: Income Tax Paid
Gross profit
1 696 000
1 240 000
Cash and cash equivalents
72 000
64 000
Net Cash Flow from Operating Activities
$ 824,000
Cash Flow from Investing Activities:
Purchase of Land and Building
Selling and administrative expenses
(672 000)
(568 000)
Ordinary share capital
1 600 000
1 600 000
$ (352,000)
$ (304,000)
$ (240,000)
Operating profit
Retained earnings
896 000
480 000
Purchase of Plant and Machinery
1 024 000
672 000
Purchase of Investments
Interest expense
(64 000)
(32 000)
Long-term loan
640 000
320 000
Net Cash Flow from Investing Activities
$ (896,000)
Profit before tax
960 000
640 000
Accounts payable
384 000
448 000
Cash Flow from Financing Activities:
Income tax payable
128 000
64 000
Dividend Paid
$ (240,000)
Tax
(256 000)
(172 000)
Issuance of Long term Loans
$ 320,000
Profit after tax
704 000
468 000
Dividends payable
208 000
160 000
Net Cash Flow from Financing Activities
80,000
Additional information
Net Change in Cash
8,000
Cash Balance, Beginning
Cash Balance, Ending
64,000
2$
72,000
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