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

AdminNo.
	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)