The following are account balances of GadgetsCom Pty, Ltd., a company selling gadgets, at the end...

The following are account balances of GadgetsCom Pty, Ltd., a company selling gadgets, at the end of financial year 20X1

Accounts	($000)
Cash at bank	168
Inventory	600
Accounts receivable	450
Land	1,516
Buildings &Equipment	2,169
Accumulated depreciation	350
Accounts payable	900
Notes payable (due in 12 months)	250
Bank loan	2,000
Share capital	866
Retained earnings (Ending Balance)	537
Sales	5,500
Cost of goods sold	2,100
Finance costs	250
Sales salaries expense	425
Sales utilities expenses	35
Office salaries expense	825
Office utilities expenses	125
Depreciation expense	100
Income Tax	492

Required: for GadgetsCom Pty, Ltd.:

a. Prepare a classified Income Statement

b. Incorporating the additional information below, calculate the Gross Profit Margin (GPM) and the Profit Margin (PM) ratios and provide your comment on the company’s profitability and efficiency.

c. Prepare the Non-current Assets section of the Balance Sheet.

Additional Information

The manager was pleased with the increased sales revenue in the current year. Last year’s ratios are GPM 55% and PM 23%. The following are ratio formula used by the company:

Ratio

Method of calculation

Gross Profit Margin

Gross Profit x 100 = x%

Sales revenue

Profit Margin

Profit After Tax x 100 = x%

Sales revenue

Expert Solution

Answer is given below

ekkarill92 answered 2 years ago

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The following are account balances of GadgetsCom Pty, Ltd., a company selling gadgets, at the end...

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