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10 marksIncome Statements and Balance Sheets for Sole Traders

CSEC Principles of Accounts · January 2013 · Paper 2 · Question 4(a)

K.A.M. Enterprise provided a summary Income Statement for the year ended 31 December 2012 and a list of ending balances.

Using the vertical style of presentation, prepare a classified Balance Sheet for K.A.M. Enterprise as at 31 December 2012.

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Other parts of this question

  1. 4(b)Using the income statement given and the classified balance sheet prepared, calculate the Net income margin, Return on capital invested, and Current ratio.[5 marks]
  2. 4(c)Using the current ratio, comment on the liquidity position of K.A.M. Enterprise.[1 mark]
  3. 4(d)Using TRU Brothers Enterprise's ratios (Net income margin 15%, Return on capital invested 18%) and those calculated in (b), make two different comments…[2 marks]
  4. 4(e)Calculate the value of TRU Brothers Enterprise's ending inventory using the First In, First Out (FIFO) method of stock valuation, stating the amount of units…[2 marks]

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