Pev Dec 05

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sair_19
sair_19 Registered Posts: 7 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi,

Does anyone know how the revised net assets for the capital employed is calculated for task 2.2? I have spent hours trying to work it out to what the examiners answer is and have had no luck!! Please help :001_smile:

Thanks

Sarah

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  • definite.studies
    definite.studies Registered Posts: 88 Regular contributor ⭐
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    We did this in class on Thursday.

    Revised Balance Sheet (£000's)

    Fixed Assets £2765
    Debtors £850
    Cash £527
    Creditors £600
    ===========
    Net Assets £3542

    Fixed Assets went down by £500,000 due to sale of surplus land and distribution of proceeds.
    Debtors went down to £850,000 as given in the question.
    I think the tricky bit was the Cash where you add £242,000 extra profit and £200,000 extra collected from the debtors.

    Then ROCE = 100% x £452,000 / £3,542,000 = 12.8 %

    (original ROCE was 100% x £210,000 / £3,800,000 = 5.5 %)
  • Dee26Bee
    Dee26Bee Registered Posts: 7 New contributor 🐸
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    Glad this has come up - I had the same problem and coudln't get back to their answer of £3,542.

    I made net assets £3,100. Anyone else make it that?
  • definite.studies
    definite.studies Registered Posts: 88 Regular contributor ⭐
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    Looks like you forgot to adjust the cash Dee26Bee.
  • sair_19
    sair_19 Registered Posts: 7 New contributor 🐸
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    Dec 05

    Thank you for your help! I think i was trying to redude debtors by 850 rather than down to 850!:001_smile:
  • Dee26Bee
    Dee26Bee Registered Posts: 7 New contributor 🐸
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    Yes! So fundamental hey! How stupid can you get!!

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