Profit and Loss Account for the Argon Mining Company.

1. Can you calculate the company's value added?

Value added = sales revenue-cost of sales

Cost of sales should not include any wages or expenses like that. In text cost of sales contains only purchases and also sales revenue is given, so it is possible to calculate value added.

2. Value added = 1750-1230=£520

3. How many ordinary shares does company have?

£110/no. of shares = £0.22

there are 110/0.22=500 ordinary shares.

4. For what purposes a mining company will use its retained profits?

a. To finance expansion or buying a new machinery.

b. To pay his debts or creditors.

c. To increase its working capital available.

d. To invest it to subsidiaries.

e. To make a research