| Assets | $ | Liabilities & Equity | $ |
| Cash | 32720 | Accounts Payable | 120000 |
| Marketable Securities | 25000 | Notes Payable | |
| Accounts Receivable | Accruals | 20000 | |
| Inventories | Total Current Liabilities | ||
| Total Current Assets | Long Term Debt | ||
| Net Fixed Assets | Stockholder Equity | 600000 | |
| Total Assets | Total liabilities. & Stockholder equity |
The following financial data for 2016 is also available;
(a) Sales totalled $1,800,000.
(b) The gross profit margin was 25%.
(c) Inventory turnover was 6.0.
(d) There are 365 days in the year.
(e) The average collection period was 40 days.
(f) The current ratio was 1.60.
(g) The total asset turnover ratio was 1.20.
(h) The debt ratio was 60%.
Complete the 2016 balance sheet for ABC Industries using the given information.
CSS Solved Business Administration Past Paper 2018 | ABC Industries Balance sheet ending December 31, 2016
The following question is attempted by Miss Nimra Masood, the top scorer in CSS Business Administration papers. Moreover, the answer is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. This solved past paper question is uploaded to help aspirants understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Topic Break down
Finance is one of the pillars of business administration; therefore, CSS examiner gives 2 questions from this portion every year. Financial statements are the primary focus of financial management. Attempting financial portions always helps in impressing the Examiner; hence getting good score.
Subject: Financial Management
Chapter: Financial Statement Analysis
| Assets | $ | Liabilities & Equity | $ |
| Cash | 32720 | Accounts Payable | 120000 |
| Marketable Securities | 25000 | Notes Payable | 159988 |
| Accounts Receivable | 197260 | Accruals | 20000 |
| Inventories | 225000 | Total Current Liabilities | 299988 |
| Total Current Assets | 479980 | Long Term Debt | 600012 |
| Net Fixed Assets | 1020020 | Stockholder Equity | 600000 |
| Total Assets | 1500000 | Total liabilities. & Stockholder equity | 1500000 |
i) Calculating Accounts Receivable
Average Collection Period = 365/ Accounts Receivable Turnover
A/R Turnover = 365/40 = 9.125
A/R Turnover = Sales/ Accounts Receivable
Accounts Receivable = 1800000/9.125 = 197260
ii) Calculating Cost of Goods Sold
gross profit margin = gross profit/ sales
Gross Profit = 1800000 * 0.25 = 450000
Cost of Goods Sold = Sales – Gross Profit
= 1800000 – 450000 = 1350000
iii) Calculating Inventory
Inventory Turnover = Cost of Goods Sold/ Inventory
Inventory = 1350000/6 = 225000
iv) Calculating Total Current Assets
Current Assets = Cash + Marketable Security + A/c Receivable + Inventory
= 32720+ 25000+ 197260+ 225000 = 479980
v) Calculating Current Liabilities:
Current Ratio = Current Assets/ Current Liabilities
Current Liabilities = 479980/1.6 = 299988
vi) Calculating Notes Payable
Notes Payable = Current Liabilities – Accounts Payable – Accruals.
= 299988 – 120000 – 20000 = 159988
vii) Calculating Total Assets
Total Asset Turnover = Sales/Total Assets
Total Assets = 1800000/1.2 = 1500000
viii) Calculating Net Fixed Assets
Net Fixed Assets = Total Assets – Current Assets
= 1500000 – 479980
= 1020020
ix) Calculating Long Term Debts
Debt Ratio = total debts/total assets
Total Debts= 1500000 * 0.6 = 900000
Long Term Debts = total debts – current liabilities
= 900000 – 299988 = 600012
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