9706_w23_qp_23 - revisedeck

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B Limited provided the following information for the year ended 30 September 2023. $ 8% debenture (2025) 60 000 Administrative expenses 161 100 Allowance for irrecoverable debts at 1 October 2022 3 820 Cash and cash equivalents 4 680 Distribution costs 84 650 Dividend paid 4 000 Finance costs 3 950 Inventory 74 000 Other payables 1 860 Other receivables Property plant and equipment at 1 October 2022 Cost / valuation 408 400 Accumulated depreciation 110 650 Retained earnings at 1 October 2022 45 850 Revaluation reserve at 1 October 2022 10 000 Share capital (ordinary shares of $1 each) at 1 October 2022 200 000 Share premium at 1 October 2022 14 000 Trade payables 57 150 Trade receivables 82 680 The revaluation reserve relates to land only. The gross profit for the year ended 30 September 2023 was $321 070. The following information is also available. Property plant and equipment at 1 October 2022 Cost / valuation $ Accumulated depreciation $ Depreciation method Allocation of depreciation Land 95 000 Nil – Nil Buildings 215 000 53 750 5% per annum straight line 60% administrative expenses Equipment 98 400 56 900 20% per annum reducing balance 40% distribution costs Total 408 400 110 650 There were no acquisitions or disposals of non-current assets during the year. Prepare an extract from the statement of profit or loss for the year ended 30 September 2023 commencing with the gross profit for the year. B Limited Statement of profit or loss for the year ended 30 September 2023 $ Gross profit for the year Distribution costs Administrative expenses Profit from operations Finance costs Profit before taxation Taxation Profit for the year Workings: Distribution costs Administrative expenses Prepare the statement of financial position at 30 September 2023. Use the space provided on page 7 to show your workings. B Limited Statement of financial position at 30 September 2023 Additional information The directors wish to raise additional finance and they are considering two options. Option 1: make a rights issue of one ordinary share for every four shares held at a premium of $0.10 per share. Option 2: issue a further 8% debenture (2028) to raise $50 000. Advise the directors which option they should choose. Justify your answer.

1. Financial accounting (AS Level) → 1.5. Preparation of financial statements

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Alex owns a business selling computer equipment. He provided the following information for the year ended 31 July 2023. Opening inventory at 1 August 2022 was $19 100. Gross profit for the year ended 31 July 2023 was $56 380. Cash sales were $36 870. All other sales were made on credit. All sales were made to achieve a gross margin of 25%. All purchases were made on credit. Inventory turnover was 8 times per annum. Trade receivables at 31 July 2023 were $23 150. Trade payables at 31 July 2023 were $17 370. Calculate the trade receivables turnover for the year ended 31 July 2023. State the formula used. Formula Calculation State the formula used to calculate the rate of inventory turnover . Calculate the closing inventory at 31 July 2023. Calculate the trade payables turnover for the year ended 31 July 2023. State the formula used. Formula Calculation Additional information Alex understands that by comparing his business’s financial results with those of various other businesses he will learn how successful his own business is. Advise Alex whether his understanding is correct. Justify your answer.

1. Financial accounting (AS Level) → 1.6. Analysis and communication of accounting information

3. Financial accounting (A Level) → 3.1. Preparation of financial statements

2. Cost and management accounting (AS Level) → 2.1. Costs and cost behaviour

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The directors of J Limited provided the following information at 1 September 2022. $ Share capital (ordinary shares of $0.50 each) 60 000 Share premium 21 800 Retained earnings 32 600 Total equity 114 400 During the year ended 31 August 2023 the following transactions took place. 1 December 2022 Made a rights issue of one ordinary share for every five shares held at a premium of $0.20. The issue was fully subscribed. 1 January 2023 Paid a final dividend of 4% on all shares in issue at 1 September 2022. 1 April 2023 Made a bonus issue of three ordinary shares for every eight shares held at that date. The directors wish to leave reserves in the most flexible form. 1 June 2023 Paid an interim dividend of $0.02 per ordinary share on all shares in issue at that date. Profit for the year ended 31 August 2023 was $16 500. Prepare the following ledger accounts to record the transactions. Dates are not required. Share capital Details $ Details $ Balance b/d 60 000 Share premium Details $ Details $ Balance b/d 21 800 Retained earnings Details $ Details $ Balance b/d 32 600 Additional information J Limited currently operates a manual system of bookkeeping and the directors are now considering introducing a computerised accounting system. State three disadvantages of introducing a computerised accounting system. State three ways in which the security of data in a computerised accounting system can be assured.

1. Financial accounting (AS Level) → 1.5. Preparation of financial statements

1. Financial accounting (AS Level) → 1.2. The accounting system

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Dev manufactures two products, Aye and Bee. He operates a system of marginal costing. Explain one difference between marginal costing and absorption costing. Explain one difference between a direct cost and an indirect cost. State the meaning of the following terms: break-even point margin of safety. State three situations where marginal costing can help in decision-making. Additional information Dev’s business operates from one rented factory. The forecast data for the year ending 31 December 2024 is as follows: Aye $ Bee $ Revenue (60 000 units at $11.00) 660 000 Revenue (80 000 units at $8.50) 680 000 Direct materials (192 000) (256 000) Direct labour (156 000) (208 000) Supervisor fixed salaries (60 000) (35 000) Variable overheads (114 000) (152 000) Fixed factory overheads (33 000) (44 000) Profit / 105 000 (15 000) The fixed factory overheads are allocated on the basis of units produced. Calculate the break-even point in units for Aye. Calculate the break-even point in units for Bee. Additional information Dev is concerned about the forecast loss for Bee. He is considering two options. Option 1 Replace the current model Bee with an upgraded model Bee. Increase the selling price of Bee by 10%. Increase the direct material price by $0.45 per unit using an upgraded material. Pay $18 000 for an advertising campaign to announce the upgraded model. Dev believes that this will result in a 20% increase in units of Bee sold. Option 2 Discontinue production of Bee. Make the supervisor of Bee redundant thereby incurring redundancy costs of $6000. Increase the advertising budget for Aye initially by $8000. Reduce the selling price of Aye by $0.44 per unit. Dev believes that this will result in a 50% increase in units of Aye sold. Calculate the revised total profit of the business if option 1 is adopted. Calculate the revised total profit of the business if option 2 is adopted. Advise Dev which option he should choose. Justify your answer.

2. Cost and management accounting (AS Level) → 2.2. Traditional costing methods

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