The following information was extracted from the books of Anika. Revenue (sales) for the year ended 30 September 2011 $80000 Purchases for the year ended 30 September 2011 $58000 Inventory at 1 October 2010 $6000 Inventory at 30 September 2011 $8000 Bank overdraft at 30 September 2011 $2000 Trade payables at 30 September 2011 $14000 Trade receivables at 30 September 2011 $16000

1. (a)(i)Calculate the following: cost of sales[3]
2. (a)(ii)rate of inventory turnover.[3]
3. (b)(i)Calculate the gross profit/ sales percentage.[3]
4. (b)(ii)Anika's gross profit/sales percentage for the year ended 30 September 2010 was 40%. Suggest two possible reasons for the change in the gross profit/sales percentage between 30 September 2010 and 30 September 2011. 1 2[2]
5. (c)Calculate the working capital (current) ratio correct to one decimal place.[3]
6. (d)Anika is considering taking the following actions to improve her working capital. 1 Obtain a long-term loan of $10000. 2 Hold a sale of 'slow moving' inventory with an original cost of $4000, the sale to raise $3200 in cash. 3 Purchase non-current assets of $8000 and additional inventory of $2000. 4 Pay accounts payable of $5000, taking a cash discount of 4%. REQUIRED Complete the following table showing the changes to working capital. The first transaction has been completed as an example. Action | Working capital (Increase, decrease, unchanged) | Amount of change ($) 1 Obtain a long term loan, $10000. | Increased | $10,000 2 Sale of inventory (cost $4000) for $3200 cash. | | 3 Purchase non-current assets $8000 and inventory $2000, on credit. | | 4 Pay accounts payable, $5000, taking a cash discount of 4%. | | [6]