1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
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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The following information relates to the business of Nother Limited. Trial Balance at 31 March 2014 Dr Cr $000 $000 Share capital Factory premises at cost Factory machinery at cost Provisions for depreciation: Premises Machinery Inventories at 1 April 2013: Raw materials Work in progress Finished goods Revenue Purchases of raw materials Manufacturing wages Factory expenses Administrative expenses Sales expenses Retained earnings Trade receivables and payables Provision for doubtful debts Bank overdraft Bad debts written off Additional information Inventories at 31 March 2014 $ Raw materials 300 000 Work in progress 220 000 Finished goods 480 000 Other payables at 31 March 2014 $ Factory expenses 112 000 Sales expenses 56 000 Manufacturing wages 40 000 Prepayments at 31 March 2014 $ Administrative expenses 8 000 During the year ended 31 March 2014 a machine was sold for $14 000. This had been debited to the bank account and credited to the sales account. The machine had been purchased for $44 000 and depreciation of $24 000 had been written off up to 31 March 2013. A full year’s depreciation is provided in the year of purchase but none in the year of sale. Depreciation is to be provided as follows: Factory premises 1% straight line Factory machinery 15% reducing balance. The provision for doubtful debts is to be adjusted to 5% of trade receivables. REQUIRED Prepare Nother Limited’s manufacturing account for the year ended 31 March 2014. Prepare Nother Limited’s income statement for the year ended 31 March 2014. Explain the following terms. Direct costs Indirect costs Prime cost Production cost
9706_w14_qp_22
THEORY
2014
Paper 2, Variant 2
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Questions Discovered
1775