John provided the following information for the year ended 31 March 2015. Revenue Inventory 1 April 2014 Inventory 31 March 2015 Expenses Owner's capital Long term loan Mark up $ 900 000 65000 35000 105000 300 000 150000 20% REQUIRED

1. (a)(i)Calculate for the year ended 31 March 2015: (i) Cost of goods sold[2]
2. (a)(ii)(ii) Profit for the year[2]
3. (b)Calculate the following ratios. Workings 31 March 2015 31 March 2014 Profit margin (profit for the year to revenue) 5% Rate of inventory turnover 7 times Return on capital employed (ROCE) 4%[6]
4. (c)Give two comments on the performance of John's business over the two years. 1 2[6]
5. (d)John is considering the following proposals to improve his profit for the year. 1 Change the depreciation methods for non-current assets. 2 Remove the provision for doubtful debts from the financial statements. 3 Value the inventory at market price. 4 Place a value on the skill of the workforce in the financial statements. 5 Exclude expenses owing from the income statement. REQUIRED Name the accounting principle/concept which would not be complied with if each proposal was implemented. The first one has been completed as an example. Proposal 1 Change the depreciation methods for non-current assets 2 Remove the provision for doubtful debts from the financial statements 3 Value the inventory at market price 4 Place a value on the skill of the workforce in the financial statements Accounting principle/ concept Consistency 5 Exclude expenses owing from the income statement[4]