1.3. Accounting for non-current assets
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 480 questions
For Examiner's Use The following is a summary of Harry's balance sheet at 30 April 2008. $000 $000 Assets Fixed assets Furniture and equipment at net book value Current assets Stock Debtors Cash Total assets Equity and liabilities Equity Owner's capital Current liabilities Creditors for supplies Creditors for expenses Bank overdraft The following information is available for the year ended 30 April 2009: $000 1 Amount paid into bank (This included $50 000 from the sale of furniture and equipment which had a net book value of $48 000.) 2 Cash from Harry's sales was used to pay for the following: Expenses Drawings 3 Amounts paid from the bank: Purchases Interest on overdraft Expenses 4 Balances at 30 April 2009: Creditors for supplies Creditors for expenses Debtors Stock Cash 5 During the year, Harry brought into the business a motor vehicle. 6 A provision for doubtful debts of 4% of debtors is to be made. 7 Depreciation on all fixed assets was to be provided for at 25% using the reducing balance method. Full depreciation would be provided for in the year in which an asset was introduced but none would be applied in the year of disposal. For Examiner's Use REQUIRED Explain, briefly, the difference between a liability and a provision. Calculate, showing all workings, the total sales for the year ended 30 April 2009. For Examiner's Use Calculate, showing all workings, Harry's bank balance at 30 April 2009. For Examiner's Use Prepare Harry's trading and profit and loss account for the year ended 30 April 2009. For Examiner's Use Prepare Harry's balance sheet at 30 April 2009. Use a layout similar to the balance sheet at the beginning of the question.
9706_w09_qp_22
THEORY
2009
Paper 2, Variant 2
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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 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). 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. 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.
9706_w10_qp_21
THEORY
2010
Paper 2, Variant 1
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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 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). 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. 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.
9706_w10_qp_22
THEORY
2010
Paper 2, Variant 2
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Answer Sections A and B. A Sarah runs a wholesale business. An extract from her statement of financial position (balance sheet) at 31 December 2009 shows: Motor vehicles at cost $371 000 Motor vehicle accumulated depreciation $130 000 During the financial year ended 31 December 2010 the following transactions took place. A motor vehicle purchased on 1 January 2006 for $9200 was sold on 30 June 2010 for $500. A motor vehicle was purchased on 1 April 2010 for $15 000. Depreciation is charged at 20% per annum on cost, with the rate being applied for each part of the year. No allowance is made for any residual value. All motor vehicles held by the company at 31 December 2010 had been purchased within the previous five years. All transactions are by cheque. REQUIRED Prepare the following ledger accounts for the year ended 31 December 2010. Motor vehicles account Provision for depreciation of motor vehicles account Motor vehicle disposal account Prepare an extract from the statement of financial position (balance sheet) for non-current assets at 31 December 2010. Explain why businesses provide for depreciation on their non-current assets. B The treasurer of Hamilton Social Club has provided the following information for the year ended 31 March 2011. 31 March 2010 31 March 2011 $ $ Café inventory at cost Café trade payables Subscriptions in arrears Equipment (net book value) Stock of stationery at cost Cash at bank 5% loan (repayable 2015) – Equipment costing $5000 was purchased on 1 April 2010. It was financed by the 5% loan. At the year end 31 March 2011, no payment of interest had been made. Included in the café inventory at 31 March 2011 were items costing $120 that were out of date. They had a net realisable value of $30. REQUIRED Prepare a statement of financial position (balance sheet) for Hamilton Social Club at 31 March 2011. Show clearly the surplus or deficit for the year. An income and expenditure account is not required.
9706_w11_qp_23
THEORY
2011
Paper 2, Variant 3
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Questions Discovered
480