1.5. Preparation of financial statements
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 637 questions
Booksellers Limited prepared the following trial balance for the year ended 31 December 2012: $000 $000 Gross profit for the year Wages and salaries Rent Heating and lighting Motor expenses Office expenses Insurance Discount allowed Other expenses Inventory at 31 December 2012 Trade receivables Provision for doubtful receivables Bank Trade payables Goodwill Motor vehicles at cost Shop fittings at cost Office fittings at cost Provision for depreciation on motor vehicles Provision for depreciation on shop fittings Provision for depreciation on office fittings 5% Debentures Ordinary share capital Retained earnings ___ Additional information: Wages owing amounted to $23 000 at 31 December 2012. Debenture interest for the year had not been paid. Bad debts of $5000 were to be written off. The provision for doubtful receivables was to be 5% of trade receivables. Depreciation was provided on motor vehicles at 12½% on cost and on shop fittings at 10% on net book value. Office fittings had been revalued at $19 000. Rent paid in advance was $8000. For Examiner's Use REQUIRED Prepare an income statement for the year ended 31 December 2012. For Examiner's Use Calculate the retained earnings of Booksellers Limited at 31 December 2012. Prepare, in as much detail as possible, a statement of financial position at 31 December 2012. For Examiner's Use The directors wish to raise funds to expand the business. State two sources of finance they could use. State the advantages and disadvantages to the company of the two sources of finance you have chosen.
9706_w13_qp_21
THEORY
2013
Paper 2, Variant 1
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Joe Brown has a petrol station which has three departments, fuel, car wash and café. The following information is available for the year ended 31 December 2012. Fuel Car wash Cafe $ $ $ Revenue 735 600 30 650 61 300 Inventory at 1 January 2012 38 700 3 650 4 725 Purchases 454 320 7 240 9 620 Inventory at 31 December 2012 39 760 2 480 4 820 Direct wages 36 000 3 000 12 000 Non-current assets at cost 120 000 15 000 2 760 Accumulated depreciation 6 000 1 200 Additional information Depreciation rate 10% 15% 15% Depreciation method Straight line Reducing balance Straight line Floor area (square metres) 3 400 Other expenses for the year are: $ Rent of premises 46 288 Electricity 18 300 Administration charges 17 119 Other expenses 54 023 The expenses are split between the departments on the following basis: Rent of premises in the ratio of floor area, Electricity in the ratio 4:1:1 between fuel, car wash and café, Administration charges in the ratio of wages, Other expenses in the ratio of sales. For Examiner's Use REQUIRED Prepare a departmental income statement for the year ended 31 December 2012. For Examiner's Use Joe is considering closing the car wash department due to its poor profitability. Advise Joe on the long term effects of this decision. Joe is looking for funds to improve the business. He is considering applying for either a bank loan or an overdraft. Explain three differences between a bank loan and an overdraft.
9706_w13_qp_22
THEORY
2013
Paper 2, Variant 2
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Questions Discovered
637