Perpetual Inventory and FIFO Cost Allocation - Current Ratio - Finance Assignment Help

Assignment Task :

Question 1       
a) Coffee Hut purchased a coffee machine on the 1 January 2017 for $58,000.  The expected useful life is 7 years, or 100,000 coffees.  The residual value is expected to be $2,000.  Sales (in cups) for coffee was as follows; 
2017  5,000 cups 2018  6,500 cups 
 

Required: 
Calculate the annual depreciation expense for two (2) years (at the end of 2017 and 2018) using the following methods; 
1. Straight Line method   
2. Reducing balance method     
3. Units of production method    
b) A Wallace Bishop store began the month of September 2019 holding 20 bracelets that cost $60 each.  During September, the store subsequently purchased the following amount of inventory (bracelets); 
September No. of bracelets Cost per bracelet 3  10 $65 16 5 $70  23 8 $85 
On 7 September the store sold 21 bracelets for $100 each and on the 17 September the store sold a further 7 bracelets for $120 each. 
 

Calculate: 
1) the cost of goods sold based on perpetual inventory and FIFO cost allocation.                  
2) the closing inventory based on periodic inventory and weighted average cost allocation. 
 

Question 2        
In the Grades and Feedback section of the Blackboard you will see you have been allocated a three letter ASX code.   This is the ASX code of the company that you have been allocated for this assignment.  You must only use the company you have been allocated.   
 

A.  Calculation of Ratios     
Calculate the following six (6) ratios for the three years 2017 - 2019 (2016 financial information will assist you in calculating averages, where necessary).  You are to use only those ratio formulas that are contained within the prescribed textbook and/or PERCI content. 
In each of the ratios, you should firstly write out the ratio formula that you used and then show the numbers that you used to calculate your answer, before showing your answer. Your answer should be in a format that indicates whether it is in %, times, ratio or days and to two decimal places. 
1. Operating Profit Margin  
2. Inventories turnover period
3. Current ratio 
4. Quick ratio (acid test ratio) 
5. Debt to assets ratio (available on PERCI) 
6. Interest cover ratio (Times interest earned)      
 

B. Company Analysis                                                                                                                 
Given the ratios over three years, comment on the company’s profitability, efficiency, liquidity, financial gearing and investment ratios.   

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