1.4. Reconciliation and verification
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 385 questions
Charles Altas does not keep books on a double-entry basis. He provided the following information. Charles Altas Statement of Financial Position at 1 January 2013 $ $ Non-current assets 60 000 Current assets Inventory 29 600 Trade receivables 33 000 Cash and cash equivalents 9 800 72 400 Total assets 132 400 Equity and liabilities Capital at 1 January 2013 108 600 Current liabilities Trade payables 18 200 Other payables 5 600 23 800 132 400 Additional information for the year ended 31 December 2013 $ Cheques received from credit customers 166 660 Discounts allowed 8 600 Cash takings banked 30 000 Cheques paid to credit suppliers 155 690 Discounts received 8 200 Expenses paid 26 100 Purchase of non-current assets 20 000 Returns inwards 4 200 Returns outwards 4 500 Bad debts 2 200 All cash takings were banked except for $29 000. Of this $10 000 was used to pay wages and the remainder kept for personal use. All other payments were made by cheque. On 31 December 2013 Charles Altas had the following assets and liabilities: $ Non-current assets 74 000 Trade receivables 20 832 Trade payables 14 930 Inventory 35 200 Other receivables 1 720 Cash and cash equivalents 4 670 No non-current assets were disposed of during 2013. All purchases were made on credit. REQUIRED Prepare the sales ledger control account for the year ended 31 December 2013. Prepare the purchases ledger control account for the year ended 31 December 2013. Calculate the total expenses for the year ended 31 December 2013. Prepare the income statement for the year ended 31 December 2013.
9706_s14_qp_22
THEORY
2014
Paper 2, Variant 2
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Patel, a sole trader, does not keep proper books of account. He provided the following information. 1 January 2014 31 December 2014 $ $ Land and buildings at cost 50 000 50 000 Fixtures and fittings at valuation 6 000 4 500 Motor vehicles at net book value 7 600 ? Trade payables 16 750 14 900 Trade receivables 14 670 13 690 Wages owing 1 200 1 400 Inventory 21 750 22 450 Cash in hand Rent in advance 1 000 ? Summary of Patel’s bank account for the year showed the following. Receipts $ Payments $ Balance b/d 16 980 Payments to credit suppliers 109 620 Receipts from credit customers 156 420 Wages 22 670 Cash sales 20 700 Rent 19 000 Proceeds from sale of motor vehicle 1 500 Electricity 8 650 General expenses 4 750 Purchase of new motor vehicle 16 400 ______ Balance c/d 14 510 195 600 195 600 Additional information Before banking his receipts from cash sales Patel took $400 per month for his personal drawings. All other payments were made from the bank. During the year he took goods costing $2600 for his own use. Patel depreciates his vehicles at 20% per annum using the reducing balance method. A full year’s depreciation is charged in the year of purchase. No depreciation is provided in the year of sale. The vehicle sold had a net book value at 1 January 2014 of $2880. A customer has been declared bankrupt and will not pay $750 owing. The amount was included in the trade receivables at 31 December 2014. In addition Patel has decided to create a provision for doubtful debts of 5%. The rent payable is $16 000 per annum. REQUIRED Prepare Patel’s income statement for the year ended 31 December 2014. Prepare Patel’s statement of financial position at 31 December 2014. Additional information Patel wishes to expand his business and is undecided about taking out a five year loan or asking the bank for an overdraft. REQUIRED State one advantage and one disadvantage of each option. Five year loan Advantage Disadvantage Bank overdraft Advantage Disadvantage
9706_s15_qp_21
THEORY
2015
Paper 2, Variant 1
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Questions Discovered
385