9706_w10_qp_22 - revisedeck

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For Examiner’s Use On 1 January 2009 Clara Coyle, a sole trader, had the following balances: $ Inventory 24 170 Premises 60 000 Fittings and fixtures (net book value) 28 000 Cash and cash equivalents 4 000 Rates prepaid Trade receivables 3 810 Trade payables 3 420 Capital 117 000 There was no opening cash or cash equivalent. Full accounting records were not kept, but the following information was available for the year ended 31 December 2009. Bank Account Receipts $ Loan from uncle (interest free) 10 000 Receipts from trade receivables 163 100 Cash sales paid into bank 34 000 Bank Account Payments Payments to trade payables 141 508 Ordinary goods purchased by cheque 6 300 Rates 2 600 Drawings 3 650 General expenses 4 410 Wages 21 300 Cash payments from cash sales General expenses 2 680 Purchases 1 200 Balances as at 31 December 2009 Trade receivables 4 100 Trade payables 11 850 Rates prepaid General expenses owing Wages owing 1 620 Cash and cash equivalents 515 Bank ? Additional Information: 1 The selling price on all goods is based on cost plus 25%. 2 During the year Clara Coyle withdrew goods, costing $140, from the business, for her own use. 3 The business allowed discounts, $1 300, to its trade receivables . 4 The business received discounts, $1 600, from its trade payables . 5 No additions or disposals of non-current assets took place during the year. Depreciation of $3 000 is to be provided on fixtures and fittings. Premises are not depreciated. For Examiner’s Use REQUIRED Calculate the total sales for the year ended 31 December 2009. Calculate the total purchases for the year ended 31 December 2009. For Examiner’s Use Prepare the Income Statement (trading and profit and loss account) for Clara Coyle for the year ended 31 December 2009. For Examiner’s Use Prepare the Balance Sheet for Clara Coyle at 31 December 2009.

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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For Examiner’s Use The following information is given about the Schubert Music Club. Schubert Music Club Balance Sheet at 31 December 2008 Cost Depreciation Net Book Value Non-current (Fixed) Assets $ $ $ Clubhouse 50 000 10 000 40 000 Instruments 06 000 05 000 01 000 56 000 15 000 41 000 Current Assets Inventory of cafe supplies 4 000 Subscriptions in arrears Cash and cash equivalents 2 100 6 500 Current Liabilities Trade payables for cafe supplies 3 000 Cafe expenses owing 1 200 Subscriptions in advance 0 300 4 500 02 000 43 000 Accumulated fund 41 000 Life subscriptions 02 000 43 000 Schubert Music Club Receipts and Payments Account for the year ended 31 December 2009 $ $ Balance b/d 2 100 Suppliers for cafe 8 400 Subscriptions – 2008 Cafe expenses 4 200 Subscriptions – 2009 2 200 Wages – cafe staff 5 000 Life subscriptions 4 000 Clubhouse repairs 6 000 Cafe takings 18 500 Sundries 2 500 Balance c/d 01 000 27 100 27 100 Additional information at 31 December 2009 Inventory for the cafe was $2 000. Suppliers for cafe purchases were owed $2 200. Cafe expenses of $50 were owing. Depreciation is to be charged on a straight line basis: Clubhouse: 4% on cost per annum Instruments: $1 000 per annum For Examiner’s Use Life subscriptions are available under a scheme which started 8 years ago. The cost remains at the original $500 per person. At 31 December 2008 there were six members with life subscriptions. The life subscriptions are brought into income over 20 years commencing from the year in which payment of life subscription takes place. The ordinary subscription rate for 2009 was $100 per person. This is to be increased by 50% in 2010. No subscriptions are prepaid for 2010. $300 remained owing from 2009 but these are expected to be received during January 2010. Subscriptions owing at 31 December 2008, which were not received during 2009, are to be written off as bad debts. REQUIRED Prepare a Subscriptions Account for ordinary members for the year ended 31 December 2009 (a life subscriptions account is not required). For Examiner’s Use Prepare a Cafe Trading Account for the year ended 31 December 2009. Prepare an Income and Expenditure Account for the year ended 31 December 2009. For Examiner’s Use The treasurer had suggested increasing cafe prices and the rate of lifetime subscriptions but the club committee refused to do this. Instead, the committee decided to raise the ordinary subscriptions by 50%. REQUIRED Suggest three additional ways in which the club could try to minimise or eliminate the deficit in future years.

1. Financial accounting (AS Level) → 1.3. Accounting for non-current assets

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For Examiner’s Use Debussy currently produces one product for which the following information is available: Product D946 $ per unit Selling price 6.00 Direct materials 2.50 Direct labour 1.40 Variable overheads 1.10 Total fixed costs $120 000 per annum Sales per annum $200 000 REQUIRED Using the data for the current product D946 calculate the following: break – even point in units and sales value; profit for the year, showing the contribution per unit; For Examiner’s Use margin of safety in units and as a percentage of sales. Prepare the contribution to sales (profit/volume) graph, using the chart below, for the current product D946. Clearly show the profit at the current sales level. $000 ’000 units For Examiner’s Use Debussy is considering extending its product range with two additional products. The fixed costs would double to $240 000 if any new product was introduced and would apply regardless of the number of new products introduced. Product D947 Product D948 $ per unit $ per unit Selling price 9.00 13.00 Direct materials 6.60 7.00 Direct labour 2.40 2.10 Variable overheads 1.50 0.90 Sales per annum 50 000 30 000 The demand for each product is estimated to be fixed at the levels stated, regardless of whether one or two additional products are introduced. The existing workforce is currently operating at full capacity in the production of product D946. REQUIRED Debussy decides to extend the product range with both additional products. Calculate the maximum profit Debussy could achieve in the next full year, if it were to produce products D946, D947 and D948. Show clearly the total contribution per product. For Examiner’s Use Based on your calculations advise Debussy whether or not to go ahead and produce all three products. Give reasons for your advice.

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

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