COURSE CODE: ACC117/106

DECLARATION FORM OF GROUP PROJECT 2

NAME OF GROUP LEADER AND MEMBERS: STUDENT ID:

GROUP:

DECLARATION: We declare that no part of this assignment has been copied from
another person's work, except when due acknowledgement is made in the text.
Furthermore, no part of this assignment has been written for me by any other person,
except in cases where such collaboration has been authorized by the concerned lecturer.
Signature of group leader: Date:

DISCLAIMER:
A lecturer has a right not to mark this assignment if the above declaration has not been
signed. If the above declaration is found to be false, no mark will be awarded for this
assignment.

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 ACC117/106

GROUP PROJECT 2

SEMESTER OCTOBER 2023 – FEBRUARY 2024

PREPARED BY:

NO NAME STUDENT ID

GROUP:

PREPARED FOR:

DATE OF SUBMISSION:

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 INTRODUCTION TO FINANCIAL ACCOUNTING /
INTRODUCTION TO FINANCIAL ACCOUNTING AND
REPORTING
(ACC117 / ACC106)

GROUP PROJECT 2 (15%)

COURSE LEARNING OUTCOME:

This assignment is designed to serve CLO3: Analyse financial statements using simple
financial ratios for sole proprietorship business. (C4)

INSTRUCTIONS TO ALL STUDENTS:

1. Form a group with a maximum of 4-5 members.

2. Answer all questions.
3. Handwritten only.
4. Submit the answers in a proper report format including the declaration and cover page
with the details required. Only the group leader needs to submit the assignment on
behalf of the group.
5. If the answers are found to be similar or the same as the other group(s), a penalty
will be imposed on all groups involved.
6. The deadline for submission is on 21 January 2024 (Sunday) before 5.00 pm.

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QUESTION 1

Sultara Enterprise and Permata Trading are involved in selling modern and futuristic furniture
based in Johor Bahru, Johor. The following balances have been extracted from the Statement of
Profit or Loss and the Statement of Financial Position of both businesses for the year ended 31
December 2023.

Sultara Enterprise Permata Trading

RM RM
Opening inventory 12,000 8,500
Closing inventory 21,000 13,000
Cash at bank 26,000 32,000
Cash in hand 18,000 15,000
Accounts receivable 18,000 24,000
Accounts payable 31,000 23,000
Bank overdraft 2,500 -
Long term loan 48,000 31,000
Net sales 155,000 121,000
Net purchases 74,000 58,500
Total expenses 26,000 11,000

Additional information:

1. 70% of net sales are credit sales.

2. Assume there are 365 days in a year.

Required:

a. Compute all the following ratios for both businesses.

i. Current ratio
ii. Quick ratio
iii. Gross profit margin
iv. Net profit margin
v. Inventory turnover ratio
vi. Accounts receivable collection period
(30 marks)

b. Based on your answer to question (a), compare and interpret the performance of Sultara
Enterprise and Permata Trading in terms of their liquidity, profitability, and efficiency.
(12 marks)

c. State FOUR (4) ways to improve the liquidity ratios.

(4 marks)

d. Explain TWO (2) mechanisms for the company to improve its accounts receivable collection
period.
(4 marks)
(Total: 50 marks)

END OF QUESTION