1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
Bach runs a manufacturing business. An extract from his statement of financial position at 1 January 2012 is shown below: Non-current assets Cost Accumulated depreciation Net book value $ $ $ Factory premises 220 000 26 400 193 600 Machinery 138 600 52 200 86 400 During 2012 the following transactions took place for machinery. Disposals Date Machinery reference Year of purchase Initial cost Disposal proceeds $ $ 26 March M12 14 000 7 100 17 August M18 8 000 1 320 13 December M20 9 600 Additions Date Machinery reference Cost $ 20 April M27 11 500 25 October M31 16 200 All receipts and payments for these transactions are processed through the business bank account. All of the remaining machinery at 31 December 2012 was purchased after 2008. Depreciation on the factory premises is charged on a straight line basis based on a 50 year life, with no residual value. Depreciation on machinery is charged on a straight line basis based on a five year life and an estimated residual value of 10% of the original cost. It is the company policy to charge a full year’s depreciation in the year of purchase but none in the year of disposal. For Examiner's Use REQUIRED Prepare the following ledger accounts for the year ended 31 December 2012. Machinery account Provision for depreciation of machinery account For Examiner's Use Machinery disposals account Identify two alternative methods of providing for depreciation. State three causes of depreciation. For Examiner's Use Bach’s statement of financial position showed the following at 1 January 2013: Trade receivables $12 000 Trade payables $10 000 Bank balance $800 Dr Sales are paid in full one month after the sale Purchases are payable 50% in the month of purchase, the remainder one month later Other expenses are paid in the month they occur Budgeted sales, purchases and other expenses for the period January to March 2013 are as follows: January $ February $ March $ Sales 10 000 12 000 14 000 Purchases 8 000 12 000 16 000 Other expenses 5 000 5 000 5 000 Complete the following table to show the budgeted closing bank balance on 31 March 2013. Receipts January February March Receipts from customers Payments Payments to suppliers Other expenses Opening bank balance Net cash flow Closing bank balance For Examiner's Use Suggest two ways Bach could improve his budgeted bank balance at 31 March 2013.
9706_s13_qp_21
THEORY
2013
Paper 2, Variant 1
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Questions Discovered
1775