Makasana-Bhakti Enterprises Plc [MBEP] is a joint venture in Dubai, has been successfully running a huge chain of conglomerate business projects like health, construction, education, entertainment, etc. One of the prestigious projects is education. MBEP has a chain of schools from preschool to college education. The group has around 50 000 students.
MBEP has fixed assets with an original value of $800 000. All fixed assets of the MBE are depreciated with an annual rate of 10%.
MBEP’s Profit and Loss Account for the year 2019
| $ | |
| Revenue | X |
| Less: Cost of Sales | (350 000) |
| Gross profit | 350 000 |
| Less: Expenses | (200 000) |
| Net profit before interest and tax | y |
| Less: Interest | (10 000) |
| Net profit before tax and after interest | 140 000 |
| Less: Tax | (25 000) |
| Net profit after interest and tax(NPAIT) | 115 000 |
| Less: Dividend | (35 000) |
| Retained profit | 80 000 |
Questions:
- Identify two external stakeholders of MBEP [ 2 marks]
- With reference to MBEP Explain two advantages of joint venture [ 4 marks]
- Calculate the missing figures ‘x’ and ‘y’. [ 2 marks]
- Prepare the revised profit and loss account for MBEP incorporating the amount of depreciation [ 6 marks]
- Explain two differences between straight-line method and reducing balance method [ 4 marks]
- Calculate gross profit margin and net profit margin [ 4 marks]
