Question 1
Download the annual report 2019 of SBS Transit Ltd at https://www.sbstransit.com.sg/Uploads/Investor_Relations/Annual_Report/sbst_annu alreport19_updated.pdf and answer the following questions:
(a) Calculate the following accounting ratios of SBS Transit Ltd for the company and the group for the two years 2018 and 2019 (round to two decimal places):
(i) Current ratio
(ii) Quick or acid test ratio
(iii) Capital gearing ratio
(b) Comment on SBS Transit’s group and the company’s liquidity and gearing over the two-year period, from the financial years 2018 to 2019.
(c) Make four(4) recommendations to improve the liquidity of the group.
(d) What are the information in the SBS Transit Ltd’s annual report, that are useful to the following users in making their economic decisions? Describe the type of information and from which financial statements the information are from, and also identify the relevant accounting ratios, if any. Support your answers with the reasons. Calculations of the relevant ratios are not required. (Maximum word limit: 300 words for each user
(i) loan creditor
(ii) potential employee
Question 2
The general ledger of Josef Ltd show the following balances as at 31 December 2019:
Additional information:
(i) Inventory as at 31 December 2019 was £181,620.
(ii) Building is depreciated on a straight line method with an estimated useful life of 30 years with no residual value, while equipment is depreciated at 15% per annum on a reducing balance basis.
(iii) The interest expenses on the loan are due half yearly on 1 January and 1 July. The first six months’ interest was paid.
(iv) Salaries and wages are to be apportioned: Distribution 70% Admin 30%.
(v) Building depreciation is to be apportioned: Distribution 90% Admin 10%.
(vi) Equipment depreciation is to be apportioned: Distribution 80% Admin 20%.
(vii) The corporation tax charge for the year is estimated at £79,200.
(viii) Land is non-depreciable and is to be revalued to £5,400,000 on 31 December 2019 for the first time.
Required
(a) Prepare the statement of comprehensive income of Josef Ltd for the year ended 31 December 2019 in accordance with the requirements of the international accounting standards (IAS 1). Show the workings for the cost of sales, distribution costs and administrative expenses separately.
(b) Calculate the earnings per share (EPS) for the financial year ended 31 December 2019
