9706_m20_qp_12
A paper of Accounting, 9706
Questions:
30
Year:
2020
Paper:
1
Variant:
2
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2
The following costs for a business relate to a newly purchased machine. alterations to the factory building to install the machine payment of insurance for the new machine the final purchase price of the machine agreed with the supplier the price of the machine before the discount from the supplier Which costs would be treated as capital expenditure?
2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour
4. Cost and management accounting (A Level)  →  4.2. Standard costing
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4
A business has a year end of 31 December. It purchased a motor vehicle on 1 January 2017 for $15 000. The motor vehicle was sold on 31 March 2019 for $8000. Depreciation is calculated at 20% per annum using the reducing balance method on a month by month basis. What is the accumulated depreciation and profit/loss on disposal of the motor vehicle?
1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
Open
5
A trial balance does not balance and a suspense account is opened. Later the following errors are found and the suspense account is cleared. A sales invoice for $1240 had been completely omitted from the books. Purchases had been entered as $85 600. The correct amount should have been $87 580. Rent paid of $2600 was entered correctly in the cash book but as $6200 in the rent account. What was the original balance on the suspense account?
1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification
1. Financial accounting (AS Level)  →  1.2. The accounting system
Open
8
A business makes a provision for doubtful debts equal to 10% of trade receivables. The provision at 31 March 2018 was $8300. The trade receivables after the provision on 31 March 2019 were $55 800. What is the change in the provision over the year?
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control
1. Financial accounting (AS Level)  →  1.4. Reconciliation and verification
Open
12
X and Y are in partnership sharing profit and losses equally. Y’s opening current account balance was $1350 debit. The residual profit for the year was $23 500. Y was entitled to the following. $ interest on capital 1 200 salary 14 500 Y’s drawings during the year were $25 000. What is the closing balance of Y’s current account at the year end?
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
Open
13
F and P are in business sharing profits and losses in the ratio 3 : 1. Their capital account balances are: $ F 90 000 P 60 000 B is introduced as a new partner and invests $50 000 as capital. Goodwill is valued at $20 000 and is not to be retained in the books of account. The new profit sharing ratio will be 2 : 2 : 1 for F, P and B respectively. What is the new capital account balance of F following B’s admission?
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
Open
14
L and M are in partnership, sharing profits and losses in proportion to their capital invested. The following information is available: $ capital: L 68 000 M 102 000 profit for the year before appropriation 28 900 drawings: L 8 000 M 12 000 No interest is charged on drawings up to $10 000 for each partner. Interest at a rate of 5% is charged on any drawings in excess of $10 000. What was L’s share of residual profit?
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
Open
17
The equity of P Limited at 1 January 2019 was $668 000. Profit for the year ended 31 December 2019 was $120 000. During the year ended 31 December 2019, the following also took place: 1 April Paid an interim dividend of $40 000 1 July Transferred $50 000 from retained earnings to general reserve 1 October Issued 5% debentures for $200 000 31 December Proposed a final dividend of $30 000 What was the total equity of P Limited at 31 December 2019?
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
3. Financial accounting (A Level)  →  3.5. Analysis and communication of accounting information
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
Open
19
A company’s results for a year showed credit sales of $500 000. The trade receivables collection period was 73 days. In the next year, credit sales were expected to be $550 000 and the collection period was not expected to change. What is the expected percentage change in trade receivables?
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
4. Cost and management accounting (A Level)  →  4.3. Budgeting and budgetary control
1. Financial accounting (AS Level)  →  1.5. Preparation of financial statements
Open
20
A business has the following current assets and current liabilities. $ trade receivables bank overdraft cash in hand trade payables The only other item in the working capital is inventory. The current ratio is 2 : 1. What is the value of the inventory?
1. Financial accounting (AS Level)  →  1.6. Analysis and communication of accounting information
3. Financial accounting (A Level)  →  3.5. Analysis and communication of accounting information
1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets
Open
22
A manufacturer uses the weighted average cost (AVCO) method of inventory valuation. Opening inventory was 10 units at $50 each. During the month: 30 units were purchased costing $70 each. 20 units were sold at $80 each. What was the value of the inventory at the end of the month?
2. Cost and management accounting (AS Level)  →  2.1. Costs and cost behaviour
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods
Open