Accounting Answers

Solve the given liner problem using the two-phase simplex method.

• Minimize Z = x1 – 2x2 -3x3 Subject to constraints

• -2x1 + x2 + 3x3 = 2

• 2x1 + 3x2 + 4x3 = 1 x1, x2, x3 >= 0

A pharmaceutical company has 100 kg of A, 180 kg of B and 120 kg of C ingredients available

per month. The company can use these materials to make three basic pharmaceutical products

namely 5-10-5, 5-5-10 and 20-5-10, where the numbers in each case represent the percentage

of weight of A, B and C, respectively in each of the products. Further, in each of the products,

the remaining ingredient (apart from the ingredients A, B and C) is an inert ingredient. The

cost of these raw materials is as follows:

Ingredient Cost per kg (Rs)

A 80

B 20

C 50

Inert ingredient 20

The selling price of these products are Rs 40.5, Rs 43 and 45 per kg, respectively. There is a

capacity restriction of the company for product 5-10-5, because of which the company cannot

produce more than 30 kg per month. Determine how much of each of the products the company

should produce in order to maximize its monthly profits. Solve the problem using Simplex

method.

My friend told me he has a friend who invested in an investment group and gets a certain percentage out of the investment. He claims his friend avoids paying taxes on the money he gets as a return from his investment by placing it on his credit card. According my friend the reasoning is that the money would show up as a negative or money owed to him not as a revenue. Is that true ?

A normal working week consists of 5 days of 8 hours per day. The normal rate of pay is RM2.40 

per hour. Overtime rate is calculated at time and a half.

Average output per operative for a 40-hours week = 120 articles.

In order to increase output and eliminate overtime, the company decided to change to a system of 

payment by result start from August 2021. The information on the new system is as follows:

 Time rate: RM2.40 per hour

 Basic time allowed for 15 articles is 5 hours

 Piece work rate: 20% higher than the current time rate per unit.

Calculate the earnings of Alexis if he produces 160 articles in the first week of August 2021.

CompanyAandB

StatementofFinancialPosition

AsofDecember31, 2020

-Cash(Company A) - 35,857.50

-Cash(Company B) - 24,387.00

-AccountsRecievable(Comapny A) - 175,000.00

-AccountsRecievable(Company B) - 37,837.50

-Inventory(Company A) - 137,715.00

-Inventory(Comapny B) - 21,945.10

-PrepaidExpenses(Company A) - 10,000.00

-PrepaidExpenses(Company B - 7,500.00

-Equipment,net(Company A) - 573,441.00

-Equipment,net(Comapny B) - 153,700.80

-TotalAssets(Company A) - 932,013.50

-TotalAssets(Comapny B) - 245 370.40

-CurrentLiabilities(Company A) - 71,857.50

-CurrentLiabilities(Company B) - 38,882.80

-LongTermDebts(Company A) - 119,350.00

-LongTermDebts(Company B) - 32,582.00

-Owner'sCapital(Company A) - 740,806.00

-Owner'sCapital(Company B) - 173,905.60

-Totalof(Comapny A) - 932,013.50

-Totalof(Comapny B) - 245,370.40

Answerthefollowing:

1. Compute for theprofitability ratios of CompanyAand B.

2. Computefor operational ratios of companyA and B.

3. Compute for thefinancial health ratios of CompanyA and B.

Enter the following transactions into accounts

May1 started I business with 18000 in the bank.

May 2 bought goods on credit from B Hind

Company A and B

Statement of FinancialPosition

AsofDecember31, 2020

-Cash(Company A) - 35,857.50

-Cash(Company B) - 24,387.00

-AccountsRecievable(Comapny A) - 175,000.00

-AccountsRecievable(Company B) - 37,837.50

-Inventory(Company A) - 137,715.00

-Inventory(Comapny B) - 21,945.10

-PrepaidExpenses(Company A) - 10,000.00

-PrepaidExpenses(Company B - 7,500.00

-Equipment,net(Company A) - 573,441.00

-Equipment,net(Comapny B) - 153,700.80

-TotalAssets(Company A) - 932,013.50

-TotalAssets(Comapny B) - 245 370.40

-CurrentLiabilities(Company A) - 71,857.50

-CurrentLiabilities(Company B) - 38,882.80

-LongTermDebts(Company A) - 119,350.00

-LongTermDebts(Company B) - 32,582.00

-Owner'sCapital(Company A) - 740,806.00

-Owner'sCapital(Company B) - 173,905.60

-Total(Comapny A) - 932,013.50

-Total(Comapny B) - 245,370.40

Answerthefollowing:

1. Compute for the profitability ratios of Company A and B.

2. Compute for operational ratios of company A and B.

3. Compute for the financial health ratios of Company A and B

Company A and B

Statement of ComprehensiveIncome

For theyear ended, December 31,2020

-(netsales(Company A) - 1,703,960.50

-netsales(Comapny B) - 372,941.80

-cost of sales(Company A) - 1,188,539.00

-cost of sales(Company B) - 265,100.00

-sellingExpenses(Company A) - 332,502.50.

-sellingExpenses(Company B) - 86,900.00

-General&AdministrativeExpenses(Company A) - 59,950.00.

-General&AdministrativeExpenses(Company B 7,315.00

-InterestExpenses(Company A) - 9,878.00.

-InterestExpenses(Company B) - 2,477.20

-NetIncome(Company A) - 113,091.00.

-NetIncome(Company B) - 11,149.60

Answer the following:

1. Compute for the profitability ratios of Company A and B.

2. Compute for operational ratios of company A and B.

3. Compute for the financialhealth ratios of CompanyA and B.

CompanyAandB

StatementofFinancialPosition

AsofDecember31, 2020

-Cash(Company A) - 35,857.50

-Cash(Company B) - 24,387.00

-AccountsRecievable(Comapny A) - 175,000.00

-AccountsRecievable(Company B) - 37,837.50

-Inventory(Company A) - 137,715.00

-Inventory(Comapny B) - 21,945.10

-PrepaidExpenses(Company A) - 10,000.00

-PrepaidExpenses(Company B - 7,500.00

-Equipment,net(Company A) - 573,441.00

-Equipment,net(Comapny B) - 153,700.80

-TotalAssets(Company A) - 932,013.50

-TotalAssets(Comapny B) - 245 370.40

-CurrentLiabilities(Company A) - 71,857.50

-CurrentLiabilities(Company B) - 38,882.80

-LongTermDebts(Company A) - 119,350.00

-LongTermDebts(Company B) - 32,582.00

-Owner'sCapital(Company A) - 740,806.00

-Owner'sCapital(Company B) - 173,905.60

-Totalof(Comapny A) - 932,013.50

-Totalof(Comapny B) - 245,370.40

Answerthefollowing:

1. Compute for theprofitability ratios of CompanyAand B.

2. Computefor operational ratios of companyA and B.

3. Compute for thefinancial health ratios of CompanyA and B.

A.Below is theStatement of Comprehensive Income of Company A and B:

Company A and B

Statement of ComprehensiveIncome

For theyear ended, December 31,2020

1.(netsales of Company A is 1,703,960.50. netsales of Comapny B is 372,941.80)

2.(cost of sales in Company A is 1,188,539.00. cost of sales in Company B is 265,100.00)

3.(selling expenses of Company A is 332,502.50. selling expenses ofCompany B is 86,900.00)

4.(General&Administrative Expenses in Company A is 59,950.00. General&AdministrativeExpenses in Company B is 7,315.00)

5. (Interest Expenses of Company A is 9,878.00. Interest Expenses of Company B is 2,477.20)

6. NetIncome of Company A is 113,091.00. NetIncome of Company B is 11,149.60)

Answer the following:

1. Compute for the profitability ratios of Company A and B. Then, whichof the companies is more profitable?

2. Compute for operational ratios of company A and B. Which companies is more efficient?

3. Compute for the financialhealth ratios of CompanyA and B. Which company is more financially healthy?