1. Financial accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 1775 questions
B Limited provided the following information for the year ended 30 September 2023. $ 8% debenture (2025) 60 000 Administrative expenses 161 100 Allowance for irrecoverable debts at 1 October 2022 3 820 Cash and cash equivalents 4 680 Distribution costs 84 650 Dividend paid 4 000 Finance costs 3 950 Inventory 74 000 Other payables 1 860 Other receivables Property plant and equipment at 1 October 2022 Cost / valuation 408 400 Accumulated depreciation 110 650 Retained earnings at 1 October 2022 45 850 Revaluation reserve at 1 October 2022 10 000 Share capital (ordinary shares of $1 each) at 1 October 2022 200 000 Share premium at 1 October 2022 14 000 Trade payables 57 150 Trade receivables 82 680 The revaluation reserve relates to land only. The gross profit for the year ended 30 September 2023 was $321 070. The following information is also available. Property plant and equipment at 1 October 2022 Cost / valuation $ Accumulated depreciation $ Depreciation method Allocation of depreciation Land 95 000 Nil – Nil Buildings 215 000 53 750 5% per annum straight line 60% administrative expenses Equipment 98 400 56 900 20% per annum reducing balance 40% distribution costs Total 408 400 110 650 There were no acquisitions or disposals of non-current assets during the year. Prepare an extract from the statement of profit or loss for the year ended 30 September 2023 commencing with the gross profit for the year. B Limited Statement of profit or loss for the year ended 30 September 2023 $ Gross profit for the year Distribution costs Administrative expenses Profit from operations Finance costs Profit before taxation Taxation Profit for the year Workings: Distribution costs Administrative expenses Prepare the statement of financial position at 30 September 2023. Use the space provided on page 7 to show your workings. B Limited Statement of financial position at 30 September 2023 Additional information The directors wish to raise additional finance and they are considering two options. Option 1: make a rights issue of one ordinary share for every four shares held at a premium of $0.10 per share. Option 2: issue a further 8% debenture (2028) to raise $50 000. Advise the directors which option they should choose. Justify your answer.
9706_w23_qp_23
THEORY
2023
Paper 2, Variant 3
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Questions Discovered
1775