3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
Listing 10 of 678 questions
Alana owns and manages a shop with three separate departments selling food, clothing and toys. The following trial balance is available for the year ended 30 April 2012. $ 000 $ 000 Inventory at 1 May 2011: Food Clothing Toys Purchases and sales Food Clothing Toys Sales staff wages Advertising Heat and light Insurance Fixtures and fittings at cost Provision for depreciation, fixtures and fittings Property Trade receivables Bank Trade payables Capital Additional information: Inventory at 30 April 2012: $ Food 17 000 Clothing 12 000 Toys 43 000 The shop has 2 floors with the food department on the ground floor and both the clothing and toys departments taking up equal floor space on the floor above. At 30 April 2012:  an invoice for advertising amounting to $2000 remained unpaid;  $6000 had been paid in advance for heating and lighting. Expenses are apportioned between departments as follows: Apportioned on the basis of sales income:  sales staff wages; advertising. Apportioned on the basis of floor area:  heat and light; insurance; depreciation. Straight line depreciation is charged on fixtures and fittings at 10% per annum. For Examiner's Use REQUIRED Prepare, in columnar format, a departmental income statement for the year ended 30 April 2012. Food Dept Clothing Dept Toys Dept $000 $000 $000 $000 $000 $000 For Examiner's Use Explain how the preparation of a departmental income statement might assist Alana in managing the business. Alana’s accountant values some inventory at cost of purchase and some at net realisable value. Explain these terms to Alana: cost of purchase net realisable value.
9706_s12_qp_21
THEORY
2012
Paper 2, Variant 1
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678