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9706_s10_qp_21
A paper of Accounting, 9706
Questions:
3
Year:
2010
Paper:
2
Variant:
1
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1
For Examiner’s Use The following trial balance was extracted from the Mighty Wholesale Company’s books at 30 April 2010. Dr $000 Cr $000 Revenue (Sales) Ordinary goods purchased (Purchases) Property (Buildings) at cost Warehouse fittings at cost Inventory (Stock) at 1 May 2009 Capital 12% loan repayable 2015 Wages Provisions for depreciation at 1 May 2009: Property (Buildings) Warehouse fittings Trade receivables (Debtors) Trade payables (Creditors) Cash and cash equivalents (Bank) Distribution expenses Business rates Insurance Advertising Drawings Loan interest Additional information: Inventory at 30 April 2010 cost $230 000. This includes inventory costing $20 000 which has a net realisable value of $9000. Warehouse fittings were sold during the year. The proceeds of $10 000 were debited to the bank account and credited to the property at cost account. No other entry has been made regarding this transaction. The fittings sold had cost $52 000 and the total depreciation charged to them by 1 May 2009 amounted to $41 000. No depreciation is charged in the year of disposal. Depreciation is to be provided for as follows: Property 2% on cost Warehouse fittings 25% reducing balance Other payables at 30 April 2010 are: Wages $12 000 Distribution expenses $5 000 Loan interest ? (The loan was taken out in 2005) Other receivable at 30 April 2010 is: Insurance $2000 For Examiner’s Use REQUIRED Prepare the income statement (trading and profit and loss account) for the year ended 30 April 2010. For Examiner’s Use Prepare the balance sheet at 30 April 2010.
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
1. Financial accounting (AS Level)  →  1.3. Accounting for non-current assets
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2
For Examiner’s Use The following is an extract of Chikkadea’s financial statements (final accounts) for the year ended 30 April 2010. Income Statement (Trading and Profit and Loss account) for the year ended 30 April 2010 $ $ Revenue (Sales) 375 000 Less cost of sales: Inventory (Stock) at 1 May 2009 32 000 Ordinary goods purchased (Purchases) 281 250 313 250 Inventory (Stock) at 30 April 2010 28 000 285 250 Gross profit 89 750 Less expenses 44 750 Profit for the year (Net Profit) 45 000 Balance Sheet at 30 April 2010 Assets $ $ Non-current (Fixed) assets 428 000 Current assets Inventory (Stock) 28 000 Trade receivables (Debtors) 22 500 Cash and cash equivalents (Bank) 1 500 52 000 Total assets 480 000 Equity and liabilities Equity: Capital 450 000 Current Liabilities Trade payables (Creditors) 30 000 480 000 The following have been calculated for Dakeeri, a competitor in the same type of business. Gross profit ratio 20.2% Net profit ratio 10% Return on capital employed 9% Return on total assets 8% Current (working capital) ratio 1.5 : 1 Liquid (acid test) ratio 0.7 : 1 Receivable days (Debtors’ turnover) 28 days Payable days (Creditors’ turnover) 35 days Inventory turnover (Rate of stockturn) 8 times For Examiner’s Use REQUIRED Calculate the same ratios for Chikkadea’s business. In order to gain full marks you must show the formula or your workings for each calculation. Where possible show your answers to one decimal place. The first answer has been given as an example. Gross Profit Sales × 100 = 89 750 × 100 375 000 = 23.9% For Examiner’s Use Name the business which performed better during the year ended 30 April 2010. Justify your answer to by comparing four of the ratios which you have calculated with the same four ratios given for Dakeeri.
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
Open
3
For Examiner’s Use Poynder and Park plan to manufacture a new product for use in the underwater construction industry. This product will be sold for $34.00 per unit. The following are the unit costs of the product: Direct Materials 1 waterproof container $1.00 Chemical P 3 kilograms at $1.00 per kilogram Chemical Q 4 kilograms at $1.75 per kilogram Direct labour 15 minutes at $8 per hour Variable factory overhead Absorbed at $14.00 per direct labour hour. Fixed factory overhead $3040 for the 6 months ended 30 June 2011. To be absorbed at a rate per unit. Expected production and sales for the 6 months ended 30 June 2011 are: January February March April May June Production 50 Sales 40 Additional costs will be: Sales commission per unit sold $1.00 Fixed administrative costs $2500 per annum REQUIRED Prepare a detailed forecast income statement (profit and loss account) for the six months ended 30 June 2011, using marginal costing. Write your answer on the next page. You may use the space below for your workings. For Examiner’s Use REQUIRED Prepare a detailed forecast income statement (profit and loss account) for the six months ended 30 June 2011, using absorption costing. For Examiner’s Use Prepare a statement to reconcile the profit in with the profit in .
2. Cost and management accounting (AS Level)  →  2.2. Traditional costing methods
3. Financial accounting (A Level)  →  3.1. Preparation of financial statements
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