1.6. Analysis and communication of accounting information
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 137 questions
The following information has been extracted from the accounting records of T Limited at 30 June 2021. Inventory at 1 July 2020 was valued at $46 800. Inventory at 30 June 2021 was valued at $54 200. The rate of inventory turnover was 8.8 times. The gross profit margin was 45%. REQUIRED Calculate for the year ended 30 June 2021: cost of sales revenue. REQUIRED Calculate the balance of the provision for doubtful debts at 30 June 2021. Prepare the income statement for the year ended 30 June 2021. Use the space on the next page for your workings. T Limited Income Statement for the year ended 30 June 2021 $ Revenue Cost of sales Gross profit Administrative expenses Distribution costs Profit from operations Finance costs Profit for the year Additional information The following transactions had also taken place during the year ended 30 June 2021. Date Transaction 1 July 2020 Freehold property was revalued downwards by $10 000. 1 July 2020 Made a rights issue of one ordinary share of $2 each for every two shares held. This was offered at a premium of $0.75. The issue was fully subscribed. 1 March 2021 Made a bonus issue of one ordinary share of $2 each for every ten shares held. Reserves were left in the most flexible form. 31 March 2021 Paid a dividend of $0.05 per share on all shares in issue at that date. REQUIRED Prepare the statement of changes in equity for the year ended 30 June 2021. T Limited Statement of Changes in Equity for the year ended 30 June 2021 Ordinary share capital $ Share premium $ Revaluation reserve $ Retained earnings $ Total $ At 1 July 2020 440 000 – 86 320 533 820 At 30 June 2021 Additional information The directors make use of accounting ratios to interpret the information contained within the financial statements. REQUIRED State the formula for calculating the non-current asset turnover. State what information the directors would obtain from calculating the non-current asset turnover. State three limitations of ratio analysis when comparing the performance of businesses in the same industry.
9706_w21_qp_23
THEORY
2021
Paper 2, Variant 3
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N Limited provided the following information for the year ended 31 August 2022. $ 6% debentures (2022) 20 000 Bank overdraft 9 430 Cash in hand Closing inventory 64 800 Finance costs 1 400 Opening inventory 45 600 Operating expenses 96 000 Other payables 4 340 Other receivables 6 080 Purchases 172 000 Revenue 292 000 Trade payables 10 100 Trade receivables 19 800 Cash sales accounted for 20% of revenue. Cash purchases accounted for 25% of purchases. REQUIRED Calculate the following efficiency ratios, showing the formula used. Ratio Formula Workings Trade receivables turnover Answer: Trade payables turnover Answer: Calculate the following liquidity ratios to two decimal places, showing the formula used. Ratio Formula Workings Current ratio Answer: Liquid (acid test) ratio Answer: Additional information The directors have reported a 5% increase in profit for the year ended 31 August 2022 and are satisfied with the results. REQUIRED Advise the directors whether or not they are correct to be satisfied. Justify your answer and support it by considering the efficiency ratios and liquidity ratios in and . State two limitations of using accounting ratios to compare the results of two businesses.
9706_w22_qp_22
THEORY
2022
Paper 2, Variant 2
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Questions Discovered
137