The following ratios have been compiled relating to Prince Corporation for the year ended 31st December 2009 together with comparative figures of the average industry.
1. The closing stock of Prince Corporation has been reduced by $8,000 from its opening amount of $22,000.
2. No dividend has been paid or proposed by the company.
3. The only capital of the company consists of ordinary shares of $1 each.
4. There are no retained profits at the beginning of the year.
(a.) Compute the following amounts:
1. Average stock
2. Cost of Goods Sold
3. Gross Profit
5. Net Profit
6. Non Current Assets
8. Closing Capital Employed
9. Net Assets
10. Working Capital
11. Current Liabilities
12. Opening Capital (Ordinary Share Capital)
(b.) Prepare the trading and profit and loss account for the year 31st December 2009.
(c.) Prepare a balance sheet as that date.
(d.) Comments on the performance of the business in relation to the industry average.
(e.) Explain the limitation of comparison used in this question.
(f.) Presentation and referencing