Name: __________________________________________

Management Accounting Part 1 Long Quiz No. 3

I. Supply the missing information (in gray boxes) in the given FS using the available information.
OKEIKAKOKEI CORPORATION
Statement of Financial Position
December 31, 2016

ASSETS
Current Assets 2016 2015
Cash and Cash Equivalents 215,500.00 41,000.00
Trading Securities 27,000.00 24,000.00
Account Receivables 20,000.00 10,000.00
Inventories 60,000.00 90,000.00
Prepaid Asset 52,500.00 60,000.00
Total Current Assets 375,000.00 225,000.00

Non-current Assets
Property, Plant, and Equipment, net 100,000.00 50,000.00
Intangible Assets 25,000.00 25,000.00
Long-term Investments 100,000.00 100,000.00
Total Noncurrent Assets 225,000.00 175,000.00

TOTAL ASSET 600,000.00 400,000.00

LIABILITY AND SHAREHOLDERS' EQUITY

Current Liabilities
Trade and Other Payables 36,000.00 30,000.00
Current Provisions 6,000.00 8,000.00
Income Tax Payable 33,000.00 22,000.00
Total Current Liabilities 75,000.00 60,000.00
Non-current Liabilities
Notes Payable 75,000.00 50,000.00
Bonds Payable 50,000.00 50,000.00
Total Non-current Liabilities 125,000.00 100,000.00

Shareholders' Equity
Ordinary Share Capital, 300 and 200 150,000.00 100,000.00
issued and outstanding shares,
respectively, 500 par
Share Premium 150,000.00 100,000.00
Retained Earnings
Appropriated 50,000.00 0.00
Unappropriated 50,000.00 40,000.00
Total Shareholders' Equity 400,000.00 240,000.00
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 600,000.00 400,000.00

OKEIKAKOKEI CORPORATION
Statement of Comprehensive Income
For the Year Ended December 31, 2016

2016 2015
Sales
Cash Sales 420,000.00 300,000.00
Credit Sales 180,000.00 150,000.00
Total Sales 600,000.00 450,000.00

Cost of Goods Sold

Inventory, beg. 90,000.00 0.00
Net Purchases 330,000.00 360,000.00
Inventory, end. (60,000.00) (90,000.00)
Cost of Goods Sold 360,000.00 270,000.00

Gross Income 240,000.00 180,000.00

Operating Expenses
Selling Expenses 50,000.00 40,000.00
Administrative Expenses 70,000.00 50,000.00
Total Operating Expenses 120,000.00 90,000.00

Operating Income 120,000.00 90,000.00

Other Income/ (Expenses)

Interest Income 5,000.00 2,600.00
Investment Income 11,000.00 12,400.00
Unrealized Gain/(Loss) on Trading Securities 3,000.00 2,000.00
Gain/(Loss) on Sale of Equipment 1,000.00 0.00
Total Other Income /(Expenses) 20,000.00 17,000.00

Net Income before Interest and Income Taxes 140,000.00 107,000.00

Finance Cost (7,000.00) (10,000.00)

Net Income before Income Taxes 133,000.00 97,000.00
Provision for Income Taxes (33,000.00) (22,000.00)

Net Income 100,000.00 75,000.00

 OKEIKAKOKEI CORPORATION
Statement of Changes in Equity
For the Year Ended December 31, 2016

Ordinary Share Retained

Share Premium Total
Capital Earnings

Balance, 1 January 2015 0.00 0.00 0.00 0.00

Issuance of Share Capital 100,000.00 100,000.00 200,000.00

Net Income for the period 75,000.00 75,000.00
Cash Dividend (35,000.00) (35,000.00)

Balance, 31 December 31 2015 100,000.00 100,000.00 40,000.00 240,000.00

Issuance of Share Capital 50,000.00 50,000.00 100,000.00

Net Income for the period 100,000.00 100,000.00
Cash Dividend (40,000.00) (40,000.00)
Appropriation of Earnings:
Plant Expansion 50,000.00 50,000.00
Unappropriated (50,000.00) (50,000.00)

Balance, 31 December 31 2016 150,000.00 150,000.00 100,000.00 400,000.00

 OKEIKAKOKEI CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2016

2016 2015
Cash Flows from Operating Activities
Net Income 100,000.00 75,000.00
Adjustment for:
Depreciation 5,000.00 0.00
Interest Income (5,000.00) (2,600.00)
Investment Income (11,000.00) (12,400.00)
Unrealized (Gain)/Loss on Trading Securities (3,000.00) (2,000.00)
(Gain)/Loss on Sale of Equipment (1,000.00) 0.00
Finance Cost 7,000.00 10,000.00
Provision for Income Taxes 33,000.00 22,000.00
Changes in Working Capital:
(Increase)/Decrease in Accounts Receivable (10,000.00) (10,000.00)
(Increase)/Decrease in Inventories 30,000.00 (90,000.00)
(Increase)/Decrease in Prepaid Asset 7,500.00 (60,000.00)
Increase/(Decrease) in Trade & Other Payables 6,000.00 30,000.00
Increase/(Decrease) in Current Provisions (2,000.00) 8,000.00
Net cash after changes in working capital 156,500.00 (32,000.00)
Payment of income tax (22,000.00) 0.00
Interest Income 5,000.00 2,600.00
Acquisition of trading securities 0.00 (22,000.00)
Cash Flows from Operating Activities 139,500.00 (51,400.00)

Cash Flows from Investing Activities

Acquisition of PPE (56,000.00) (50,000.00)
Sale of PPE 2,000.00 0.00
Acquisition of Intangibles 0.00 (25,000.00)
Acquisition of Long-term Investments 0.00 (100,000.00)
Investment Income 11,000.00 12,400.00
Cash Flows from Investing Activities (43,000.00) (162,600.00)

Cash Flows from Investing Activities

Issuance of Share Capital 100,000.00 200,000.00
Net Acquisition/Payment of Notes Payable 25,000.00 50,000.00
Net Acquisition/Payment of Bonds Payable 0.00 50,000.00
Cash Dividend (40,000.00) (35,000.00)
Finance Cost (7,000.00) (10,000.00)
Cash Flows from Financing Activities 78,000.00 255,000.00

Increase/(Decrease) in Cash 174,500.00 41,000.00

Cash and Cash Equivalents, 1 January 41,000.00 0.00

Cash and Cash Equivalents, 31 December 215,500.00 41,000.00

Additional Information:

1. The corporation commenced its business operation in 2015.

2. Average data is computed by adding the beginning and ending balance, then dividing the result by 2. If the
beginning balance is not available, averaging is not applicable; hence, use the ending balance. (This applies
to ratios on turnovers and return on assets and investments.)
3. Use only the ending balance of shares outstanding in computing EPS (assuming all share capital issuances
happen at the beginning of the period).
4. Income tax expense is equals to the income tax payable for the period. Income tax payable is assumed paid
on the following calendar year.
5. Use 360 days instead of 365 days in computing periods.
6. The following items remain CONSTANT in the two-year comparative FS:
a. Gross Profit Margin d. Intangible Assets
b. Operating Profit Margin e. Long-term Investments
c. Net profit Margin f. Bonds Payable
7. The Notes Payable is an interest-bearing note. The Company pays 5,000 of the face amount in 2016 and
availed another interest-bearing note with a face value of 30,000.
8. Ordinary share capital is issued in cash twice its par for 2015 and 2016.
9. Credit Sales is 30% and 1/3 of the total sales in 2016 and 2015, respectively.
10. In 2016, the Company sells an equipment with a book value of 1,000 for 2,000 cash and purchase additional
56,000 property, plant, and equipment in cash.

II. Using the information above, identify the missing ratios. You may use the following ratios in computing
the missing amounts in the FS.

FINANCIAL RATIOS: 2016 2015

1. Current Ratio 5.0000 3.7500
2. Acid-test Ratio 3.5000 1.2500
3. Working Capital 300,000.00 165,000.00

4. AR Turnover 12.0000 15.0000

5. Average Collection Period 30 days 24 days
6. Inventory Turnover 4.8000 3.0000
7. Average Days Supply in Inventory 75 days 120 days
8. Payable Turnover 10.0000 12.0000
9. Average Age of Payables 36 days 30 days
10. Debt Ratio 0.3333 or 33.33% 0.4000 or 40.00%
11. Equity Ratio 0.6667 or 66.67% 0.6000 or 60.00%
12. Debt to Equity Ratio 0.5000 or 50.00% 0.6667 or 66.67%

13. Book Value per OS 1,333.33/share 1,200.00/share

14. Times Interest Earned 20.00 times 10.7 times

15. Gross Profit Margin 0.40 or 40.00% 0.40 or 40.00%

16. Operating Profit Margin 0.20 or 20.00% 0.20 or 20.00%

17. Net Profit Margin 0.1667 or 16.67% 0.1667 or 16.67%

18. Return on Assets 0.3750 or 37.50%

19. Return on Investments .3125 or 31.25% 0.3125 or 31.25%

20. Earnings per Share 400.00/share 375.00/share

21. Dividend Payout 0.4000 or 40.00% 0.4667 or 46.67%