9706_w12_qp_22 - revisedeck

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Sharon Woo does not maintain full accounting records but is able to provide the following cash receipts and payments information for the year ended 30 April 2012. Cash receipts $ Cash payments $ Cash sales 260 000 Payments to credit suppliers 216 000 Receipts from trade debtors 40 000 Equipment 20 000 Disposal of surplus equipment 4 800 Wages 22 000 Drawings 48 000 Rent 10 000 The following information is also available: Balances 1 May 2011 30 April 2012 $ $ Premises 100 000 100 000 Bank 8 000 3 200 Cr Trade receivables 26 800 24 800 Trade payables 21 200 22 400 Equipment 24 000 36 400 Rent prepaid 1 200 1 600 Inventory 16 800 20 800 Surplus equipment was sold at a loss of $400 The sales figure does not include $18 000 of which Sharon Woo took $6 000 for her own use and the remainder was used to pay wages. Discounts allowed during the year amounted to $7200. Discounts received during the year amounted to $10 800. For Examiner's Use REQUIRED Calculate Sharon Woo’s capital at 1 May 2011. For Examiner's Use Prepare Sharon Woo’s income statement for the year ended 30 April 2012. For Examiner's Use Calculate the return on capital employed for the year ended 30 April 2012 (to two decimal places) using the opening capital figure. Advise Sharon Woo how she can use the figure for return on capital employed to assess the performance of her business.

3. Financial accounting (A Level) → 3.5. Analysis and communication of accounting information

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

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For Examiner's Use Amina and Nizam are in partnership sharing profits and losses in the ratio of 3:5. Their accounting year ended on 31 December 2011. The partnership agreement also states that: Amina receives a salary of $24 450 annually; Interest on drawings is charged at 5% on annual drawings; Interest on capital is payable at the rate of 4% per annum. The following balances were extracted from the books on 1 January 2011. Capital account Current account Amina $140 000 $8 400 Dr Nizam $240 000 $3 200 Dr On 1 July 2011, Amina paid an additional $20 000 capital into the business bank account. Drawings for the year were Amina $26 000, Nizam $35 000. Profit for the year before appropriations was $120 000. REQUIRED Prepare the appropriation account for Amina and Nizam for the year ended 31 December 2011. For Examiner's Use Prepare the current accounts for Amina and Nizam for the year ended 31 December 2011. For Examiner's Use On 1 January 2012, Amina and Nizam agree to admit Sarah as a partner. At that date goodwill was valued at $40 000. The following were also agreed about the new partnership: Goodwill would not remain in the books; Amina, Nizam and Sarah would share profits and losses in the ratio 3:5:2 respectively; Sarah would put $70 000 cash into the business; Sarah would bring into the partnership inventory at a value of $30 000 and a motor vehicle valued at $20 000. REQUIRED Prepare the capital accounts for Amina, Nizam and Sarah at 1 January 2012. For Examiner's Use In July 2012, Amina, Nizam and Sarah discovered several errors that had been made in their accounts. Their trial balance failed to agree and the difference was entered into a suspense account. The revenue account had been overcast by $18 200. Discounts received of $9 600 had been entered on the debit side of the discounts allowed account. Simon, a debtor, had paid a cheque for $9 400 to clear his account. His account had been credited for this amount but no entry had been made in the cash book. REQUIRED Prepare journal entries to correct each of the errors which had been discovered (narratives are not required). For Examiner's Use Prepare the suspense account, clearly showing the balance brought forward.

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

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

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For Examiner's Use Rapunzel Ltd produce three types of shampoo: Aloe, Hazel and Peach. Each shampoo uses the same manufacturing process but contains different ingredients. The following data is available for the 6 months ended 31 October 2012. Aloe Hazel Peach Sales 120 000 39 000 60 000 Selling price per litre $8.00 $14.00 $10.00 Direct materials per litre $2.70 $7.80 $5.36 Variable overheads per litre $1.80 $2.20 $1.00 Direct labour rate per hour $3.20 $3.20 $3.20 Output per labour hour 8 Total fixed costs of $477 750 for the 6 months were recovered at the rate of $13.00 per direct labour hour. No inventory is kept and all output is sold in the month of production. REQUIRED Calculate the total direct labour hours required for the 6 months ended 31 October 2012. For Examiner's Use Prepare a statement showing the net profit or loss for each of the three products, and the total profit made for the six months ended 31 October 2012. Calculate the contribution made per direct labour hour for each product. For Examiner's Use One of the directors suggests that production of the Hazel shampoo should be stopped and resources should be concentrated on the production of the Aloe and Peach shampoos. If this decision is implemented: • The sales of Aloe and Peach shampoos are forecast to increase by 10% each; • There will be no increase in the selling price; • The rates for variable costs will remain unchanged; • Higher marketing costs will increase the total fixed costs to $550 000. REQUIRED Prepare a statement showing the expected net profit or loss for the Aloe and Peach shampoos and the total expected net profit for the 6 months ending 30 April 2013. Using the overhead recovery rate of $13.00 per direct labour hour clearly show any fixed overhead over/under absorbed. For Examiner's Use Based on your calculations in and above, advise the Board of Directors regarding the future production of the range of shampoos.

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

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

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