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7/25/2019 Accounting 6001, 6002.PDF
1/24
r
Prl.r R.f 6 nr)
6001i01
M257L4A5 ; J r 0
J , 5 , 1 . 5
s Guv bc rqr( tJillcC u n l rn rrc, irJ, r rcc q r ih t_ t lc \ r l i . r n ' r cd ( \ , p \ . { h ( p u l r e r . C : f } ; Ed
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-,
Balance /dSubscriptionsBook salesInterest Investment ccounl
SEC'IION A
souRCE i \ IATERIALFOR USE WITH QUESTION -
l. Nunyell Book and LircraryClub prepares inal accounts n i0 April of cach ycar. Thc Club wa s
established o undcrtake iterary eadings nd to purchasc ooks or mcmbcrs at discount prices
from book u'holcsalers-
Receipts nd Payments ccount lr4ay 006 30 April 3007t
I 695I r 0 0
r 99 8 050
The follon'ing nformation s also avai lablc :
(i )
PremiscsFixtures nd ittings60,6 ongate ot: prenniscs4olonvestmcnt ccountCreditors or booksCreditor or buildrng vorksInsurance aid n advanceElectricityaccruedSubscriptions in arivance
_ IN AITCATS
Srock of books
Book purchaseslnsuranu-eElcct r ic i tyl\4ortgage a)'mentsInvcstrnent ccountAccounting ee sFixtures urchascVisiting spcakcrsBalance id
16700320
l - + 1 03 10 0r 000
60 0i 000
:5 06 ,145
30 sl50825
I l\{ay1006
+
t00 00 0r0 000l0 000
r 000I 750
1 5 054 0
_ / ut t 6 5 0
30 April3007
+
?9 350
l8 000? 0004 40 0E000
3 53 s 042 0
952 1 0 0
(i i) i}e Clubpurchases ooks each month ronr book wholesalers. he books are hen offered oclub members.
l i i i) The buiidine works undertaken uring he year consisted f the edecoration f the premisescosting 2 000 and an extension o the premises osting 6 000.
iiv) Depreciation s charged t the rate of 2V. on premises nd l5% on fixtures and inings usingthe straight ine method. The policy is to charge a full year's depreciarion n all assets eidat the end of the vear.
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(v) The capital cpayment n thd mortgage ook prace n 30 April 2007.
(vi) The payment nto he nvqstmenr ccount ook piace on 30 ctober 2006.
(vii) AII subscriptions n arrears n I Mav ?006 were collecied n fuil.
(viii) on I lvlay2006 he club offered mernbers l0 year nembership r rhe ate of {100. Twelvemernbers ccepted he ofl-eq aying n fuIl. rn.iuur*iptions in advance oes not inciude aproportion of those payments.
'
-(ix) The accumurared und on r May 2006 was 92 00u.
Requ i red :
(a) Pi'eparc ire:
(i) book rading ccounr or thc 1'ear nded 0 Aprit ?007:I
( i i ) income nd expenditure ccount or rhe ear ended 0 Apri r2007:
( i i i )balance heet s at 30 Apri l2007.
(1 )
The policy of thc- lub is that all books held n stock or more han hrce monrhs re valued t theower of cost or net ealisable alue.
(b) Expla in he erm net rea l i sable alue.
(c) Expla in 'hy the apprication f the.accruars matching) conceptdetermining orv he redccoration ithe premises nd thc L-xrcnsiorltreated n tiie ncome nci xpenditurc ccount.
will be importanrto the prcmises vi l l
( d ) E v ' a l u e t e t h e d e c i s i o n o f t hc c l u b t o o f f e r t c n y c a r s u b s cr i p t i o n s a i a r e d i . r c e d r a r e .
f the qucst ion papcr.
Turn over
7/25/2019 Accounting 6001, 6002.PDF
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soLRCE : \ IATERIALFOR USE \ ' lTH QLESTIO\ : '
Ecl ipsc ,lanufacturing roduccs \\ 'o products: hc Rcgular rtd hc Pt 'cmittm. hc lbl lo$ ' ing
infonnition s avai i rblc br hc 1'car ndcd 0 Apri l2007'
(i) Both products se he same au' matcrial. On I May 2006. hc stock of rau' material u'as
I 100 units at a value of f40 Per unit.
(i i) During he year 4 200 units of rau, ntatcrial u'crc ssued o production and the follorvine
ourchases f rau' material u'cre madc:
rJuneOctober.lanuaryMarclt
000 @ r4 0000 @ f4 :100 t fj-ss00 @ fi O
(i i )
( r' )
(.')
(vi )
Stock s valuc'd sing he Firsr n Firsr Out (F.l.F.O.) lethocj asc-d pon periodic aluation.
One unit of ran'material ' i l lmakc ei ther ne unit of Rcgular r one uni t of Premium.
During hc -r'ear .100Regular nitsand I i00 Prcrniurn nits u'crc produced.
Manufacturing 'ages are paid on tlte basis of day-uork ratc plus bonus. Production taff
u,ork 40 hours per u,eek or 50 u'ecks n the year and are paid at a rate of f4 per hour plus a
bonus payment f 50ori, f tire ime sar,ed n the productiol of units.
The standard ime to produce unit of Regular 'as 0 hours and a unit of Prcmium u'as
l5 hours. en production taffmade Regular nits and u'clvc production taffmade Premtum
unlts.
(vii) lr{anagemenr alaries f 66 000 are o be apponioned ctu'ccn he nvo products n he basisof the number of production staff.
(v i i i )Premise sanc lgene ra lunn ingcxpensesof l lS0000a rcappon ionedonf loora rea -Thea reaoccupied s: production f Regular 00 sq m. production f Premium 400 sq m and salesadnrinistration 00 sq m.
(ix) Depreciation s chargcd n machinery t the rate of 20% using h- straight ine method.Machinery urchased r soid during he 'ear u'ill have depreciation harged n proportion othe months of ou'nership n the year. The balances n I ir''la1' 006 u'ere:
Regular roduction ine machinery t costprovision or dcpreciation
Premium produciion ine - machinery t cost t200 000provision or depreciation r 00 000
fr60 000fr00 000
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(x) on I Febru'ary aa7,new achin.?,lr^Tglremium productioninewaspurchased ta:::i::Jit fi*,:.Tiffi,1;ii;1r..rffjl;';'rtou.'b.,2005asradedn art(xi) \lork in progress:
RegularPremium
I tutay2006
f8 60 0f i0 500
30 Apri l1007
f9 000f i l 0 0 0
(t 6)
(6 )
for production achinery ather ha n
({ )
(Total 26 marks)
Requ i red :
(a) Prepare or fhe year ended 0Aprii 1007, he ;
(i) llanufacturingaccount' tto*'in rhe producrion osrof-theR.egurar nd premium:(i i .yPremiunr roductionine *o.n,n"O accour.rr;( i i i )Premium roductionrine prorision or depreciarion ccount;( iv) Ilachinen disposat ccounr.
(b) Explain threc characterisrics of ov.t-.rhelci xpensr_s.
(c) Evaluate he bc nusins rcduc ' r* u;J j : t :t
us ing stra ight ine deprecia t ion
uestion tper.
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souRCE NIATERIAL FOR USE \/ITH QUESTION 3.
3. Rizan s a g,--ncralradcr buving and sellinc goods on crcdit. Rizan cmploYs bookkccper 'h o
r,ai'tdins tlrc accounts. ue to thc illrrr.ss f thc bookkccpcr hr.' cbtors and creditors ersonal
accounts rarcnorbccn naintaincd or he hrcc nronths ndcd 0Apri l:00?. Al l othcr ntries av e
been made n the accounts-
Rizan r,,,ishcs o preparc his final accounts or thc thrcc nronths nded 30 April 2007. He ha s
cxtracted trial balance irh the exccption f tliebalanccs or debtors nd creditors. lthough e s
a\r'are hat here are some errors n thc accounts.
The ol lorving alarrces erc avai lablc t 30.{pril 2007:I
2 5 1 036 40 068 65033 200
900-1 00: 100i 600
29 47063 000
95085 0
I 450
(i) a creditpurchase f goods or resale. ostin*a I :00. had been ecorded n the office stationeryaccount:
(i i) a credir nore or -soods etumed o Rizan. worth f2 800. had not been entered nto theaccounls:
(i i i) a cheque or f.175 cnt eceivabic ad becn dcbited o the ent cceivable cc:ount s 147 anddebited 0 the bank account s 75:
(iv) discount eceived f f20 had been ncorrectly iaimed 1' Rrzan:
(v) invoices for credit saies of f4 000. had not been entcrcdbeen advised hat one of these nvoiccs. ior f 1 500. rciatcs
dlclared bankrunt.
M257r4A
Total crcditors t I Fcbruary'2007Total dcbtors t I F cbruarl 3007
' Sales n credi tCheques ai dRc-turns n*'ards
, Purchases or cashBad dcbt u'rincn of fPror sion or doubtfuldebtsPurchases n creditChcques eceivedRetums utn'ardsDiscount eceived
Dcbtor cheoue eturned ishonoured
The ollou'ingerrors ave been discovered n the books:
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' \
1Requierd:
(a) Prepare or the dissolution f the partnership, he:
(i) reairsation ccount;
(ii) c.rpital ccounrs f Cill and Hameect;
(ii , bank account.
(b \ Exp la in :
(i) the erm gooCu,ili;
(ii) rvhygoodwiilw.ould e entered nro he books ,hen he parrnership s being dissolved.(6)
Evaluate he need or a fonnar partnership Agreement rvhen rading as a partnership.
(2)
(Toral 6marks)
Ansrver pace or qucst ion is on pages 2 to 1.1 f the question aper.
9 _
(8)
( c )
M257t4A
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souRcE MATERIAL FOR USE WITH QUESTTON .
Jameel nd Kalid arc retailers rading n sinrilargoods. heir surnnrariscd rading and profit andloss accounts nd balance hcets re as ollorvs:
Trading nd protit and oss accounts or the year endcd 30 April 2007
Jameelf000
Opening stock 35Purchases 33 0Expenses 80Net profit
.#
Jameelf000
Fixed assets 23 0Stock 45Debtors 80Bank
d
Kalidi000
2533010060
5 1 5
Kalidf000200
l 560
Balancc heets sat 30 Aori l2007
Jameclf000
Sales 50 0Closing tock 45
54 5
Capita lLon_q erm loanBank overdraftCreditors
Jarneelr000
r 5 01 5 0
Kalidf000500
t )
5 r 5
50I J
27 5
Kalidf000
1 5 0
70370
M257t4A
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Reguired: , r
(a) Calculate for both Jameel and Kalid the:(i) gross prolit to sales ercenhge;(ii) rate of stock urnover:
(iii) fixed assets o sales;
(iv) current ratio.
(v) triquid acid :est) atio. d
(bJ E.rplainrhe crm protirabitig..
( t )il each of ( i ) and (i i ) bclo*; ident i r i , r r.^ .o . e)arioromlilr'#'Jltll;l:;]'#.nttr'v rvo irrbrencesber*.c-enthebusinessesorJameerandi) a custonrer .i
(ii) a credit".", ;;:::":::''""'s'
premiscs:
(d) Evaluate rhe usel:
i.rlnessof accountingratios n assessin_gthc_ uccess of a business.
Ansn.er spacc lbr que.stion5 is on pagcs I5 an d
(2)
(Totall6 marks)
l6 ol ' thc qucstfon paprlr.
(8)
(1)
I | ]57I4r \
-
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souRcE N{ATERIALOR USEWITI{QUESTI0N'
6. Creg s in busincss fi.cringlrc rirco| a rltni cliggcrmachinc. 1c ror,idcs
\^'o ypcs of scrr,icc:
. Thc dai lyhi rcof thc ntnidiggcr tr ts ou'n'
Gregdc l ive r s thcd iggc r tocus tomcrs .p rov idc - ins t ruc t ion to r t l r ccus to l ] l c r tousc thed igge rfor rhc o'y "nO
thcridrcg collccts hc digger at hc cnd o1-theay'OR
. T h e d a i l l , h i r e o f t h c r r r i r r i d i g g c r l o g e t h e r r r. i l . J r c g a s t h c o p c n t o r.
Gregde l i r, e r s thcd iggc r ' ope rat e s thcd iggc r fo r thedayand thcnrc t r i o r, e s thed iggera t t hecndofthe daY'
Gregcha rgcs l250pe rda l ' '^ fo r t l r c l r i r eo f thcnr in id iggc rand t350pc rda l ' fo r theh i reof themlni digger ogcther 'ithGreg as hc opcraior'
The follorving nformation s availablc:
{i) ln the ast lnancial car:I
. Greg hiredout he mini diggcron ts orvn or50 da1's nd
. c r e g h i r c d o u t t h c r r r i n i d i g g c r l i i t h h i n r s e l f a s t h c o p g r a t o r f o r T 0 d a - v s
( i i ) T h e m i n i d i g g e r c o s t . f 3 0 0 0 0 a n d i s t o b e d e p r e c i a t e d u s i n ' ] t l r c * r a i g h t l i n e m e t h o d o v e r41'ears- tren t u'ill be sold or t6 000'
( i i i ) \ 4 a t n t e n a n c c o f t h e m i n i d i * t g e r c o s t s f 3 0 0 0 f o r t h c y c a r '
( i v ) \ \ i henh i r ingou t themin id igge ron i t so rvn ' c reg tooka io t a io f2hours tode l ive randco l l ec tthe ninidiggcr n each ccasion'
tv) whcn hiring tlie rnini diggcrrvith himself as the opcrator' Greg took a
total of
8 hours n each ccaston'
. (\ 'i) Greg paid hirnself 13 100 or thcycar' i
(r'ii) Genr.-rai verhcrds br thc mini digger u'ere6 000'
I
tvl251l4A IJ-
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a \t+ . .'a
, { . 't . _
Required:
(a) Explain each of the ollowing e;
(i) fixed cost;
(ii) semi-fixed osr.
using an .ample:
(4)(b) Calculate or the t*ear, he dailyct. i(,:
(i) hire hc mini dig*ucr n irsor r
(ii) hirc- hc.,nrini igger ogerhcr rr Creg a:, .. operator.
(6)(c) (i) comrrent on the rve pnlqtcurrcnri'bein*qchar-qed y Grcg.
( i i ) Explain rv chis mini o'**Ltili.l"r:l ';:.o*'-
iould change is pricingp.tic-v o mprove ncome ro m
(4)(d) Evaluate hetherGreg shourd rnproy n accountanr o assisr is business.
(2 )
(Total 6 marks)
Anslver sp: tce or qucst ion 6 is on pagcs l7 an d I8 of the qucst ion apcr.
f,l5i'JlJIERilAil0[iAL0cl{UiltP l a y o ' 0 ' L e v e l& ' A ' I e v e l
f.,lanii?,.4arhet.'lrlkltet,Jhai:a?0 5tulou0 I 416 16, r8 '58 ' t i8
-
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souRcE MATERIAL FOR USE WITH QUESTION 7.
1. T5e following nfornrari6n s lvai la t r lc iorn rhc accounts t 'King Rcta i l or t l tc 'ycar cndcd
3l Marcl r 007.
(i) The percentage f debtors scd o maintain ticprovision or doubtful ebts was aised ro m
4Yoto5o/o f outstanding cbtors n 3l March 1007.
Dcbtors l N4arch 006 f28 000Debtors March 2007 f 19 00 0
(ii) Rcnr eceivablc f i-1?5 pcr quancr u'as orving o King Rctail on I April 2006. Paymcntswerc eceivcd s ollou's:
'3 Apri)2006 Ru-ccipl y cheqtrc '1755 Jull' 2006 Receipt ,v heque ^1754 October 006 Rcceipt y chc'que 4753 january 007 Reccipt y cheque 4? 5
On I january 00?. King Rctail aiscd hc cnt o f500 pcr quartcr'
The payment eceived n 4 October 006had bcen orrectly ntercd n the bank account uthad becn entercd n thc rcnt cceivablc ccolrnt s 745. This crroru'as correrctcd y ournal
entry on 31 N{arch 007.
(iii) The eiephone ccount ccords he payments o two conrpanics Western elephones or theoffice elephone harges nd Biue Phones or mobile phonc hargcs.
During the 1,ear nded 3l March 3007 nvoices r'ere cccir cd from Western Telephonestotalling 2 060 or actual sasc, t u'as estimatcd hat hc follori'ing ums were owing oWestern eleDhones n:
I April2006 f 16031 r4arch 007 f3l0
I{25?l4A
Mobile phonc paylncnts o Bluc Phones rc by'bank nsiruction t'f500 pcr quarter. t u'asestimated lnt thc ollor'. 'ing ums 'ercprL-paido Bluc Phoncs n:
i
i April2006 f480
31 March 1007 fl50
l 4' . 1 :_. l . .A
I
-H-
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Requircd:
(a) Prcparc hc i r l lou ' ingc
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trEr kc{alrc'
6002t0rLondon Examinations CE,Accounting Modular Syllabus)Advanced Subsidiary/Advanced
evelUnit 2 - Corporate nd Management ccountingFriday 5June 007 Morninq
Sgurce ooklet or use vith Questions1to7 .
Do not return the nsert rvith hequestion aper.
rlililililliltltillil|ltillililltltl2 5 7 1 7 A T t t i ' t : , ' - . 'edexCel =,a o v a n c i ^ i , : a ' - - _ - ' i - ' -
-
Pnntcr's Lng Ntr
M2s7 7Awt50/600 JtJ?0 J/515/51
Th6 plblom Dy b. Gprldoccd 6ly r ecd.G rrrh Edcrql Limrri copmghr Folr]., C:m? E&st Limird
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I SECTION A
souRCE ivr.{TERTALFOR USE WITH QUESTION I
l' I{earU plc operues a,19 ile nhonl3elwork and has an authorised hare capitar of g00 00 0;il:ll ;":'li:'ti,:X,:T*?"TJ,ni:*:hi{f,n, p.iiiodo,,,he,a*r,heordinan.share capi ta l soJoooSlu prc i l , r.cnccshare api ta l g0 000109,o cbenturc 010 300 00 0proi l rand oss esen,e 95 00 0Ge-neral cserve
20 000|
,i;i:.:H:',1ii.,:t:j'ilffi;iiarch2007 as een uccessnrr.nd he radingrontor he earIrrrvlarch 007, rredirectors f Hearu prc agreed he orowi'_s:(i)
;;Tii;'1.:tl1ot;lo"d toordinaryharehordersor-r ence-er hare.he dividendas aid
(i i) 11.,. retcrence shares re cumulati
;:l:"ii,",l..;::;.'"'x#i.TJffi['?i""',lHtl',::il"Tf,1i]f:Tln:;J[j;?::( i i i )Trar,st 'cr 50 000 o hc Gcneral r.sen,e.
t i v r \ l akc a p ro r. i s i onof f 120 00 o c rol )c i , tc hc nrobilc h";-";; ; ; ; ; : tJ.i l t : : : .pavablc to tht '-so\.c.r-i , lcnr,ibr r i rc ic , rnce o(r ) I lcdc . . r r" r100 000 ordinan. harcs rpar.
"'';]::::l,J.,].|,]l,::',,:[\J,1.,"11.i?;ifo.700 rrerhe car ncrrockrake,o epracehe
r . 1 2 5 7 7A
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Requircd:
(a) Prcparc he ournal cntrics o sho* ircu :l:_._ ::HcarU plc. Datcs ndnarrar ivcs rc oi ruc- : r r,J ,
. . - . : bc rcco rdcd ul lhc lrooks of
(e)
' lxrvc bcen(b )Prcpa re thesha rcho lde r s in t c re s t sbc t ionf romrhcb : ] ; : . . . -
cntered nto hc books.
Calculate he gearing ratio for HcarU plc onI April 2007, clca:.i : ..-i
__
Evaluate he dccision of the directors to redeem he ordinary shares.
(c )
(d )
(To ta l26 m; :^ .
t he q u c s t i o n pape r.
, M:5717A
\-_
Turn ovcr
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)
souRcE I \ IATERTAL FC'R USE WITH QUESTTON
Achi l lcs lc produces raining hoes t ts actory. he raining hoes re hendelivered o Achi l lesplc shops. vltcrc ltcy arc sold o custonlcrs. At 3l March ?007, he followingwcre some of th ebahnccs n thc books.
Dcb i tL
Credit I$ ,
-\dyc rtis n I 17 00B.rr ld .-bts 1 5 0 i
I--i
iCournr i ss ionn sa l c s 8 _i00
Corporetion ax provision
l2 ' f Dcben tu rc s 0 l
100 00
Direc t abou r ; 270 00
Dircc t ma tc r i a i s r 195 00 i
D i r c c t o r s ' s a l a r i c s95 000 l w -
F a c t o n ' b u i t d i n g s r zl 000 000
Lesal t -ees 1 40 0 0 l -i| *N l o t o r o r r i c s t cos t 270 00
lncomc tronl tnvestments i t k s o
8l 000
-l() r;t)
Sa lc s
Stoc l i f l l n i shcd oods t I Apr i l1006,
I 850 0i-t0
180 00
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SOURCE MATERIAL FOR USE WITH QUESTION 3' . . . . ' . ' . ' . ' '
3. Fcrnne Fltrlic Limitcd,which uns a chain of beauty alons, as decidcd o mergewith The LookeLinritcd vhiciimakes osmetic roducts t its factory. he new company s called Feeling GoodLimited and s to have anAuthorised hareCapital f t 500 000 ordinary hares f f I each. henew comparl\, as ormed on I April 2007.
Tircbalancc hcets f the rvoexist ing ompanies n 3l March 1007 wcrcas ollows:
FemmeFataileLimited
t 0 0 0 t 0 0 0
400
The Looke v/Limited
f 000
55 0
90"t2.
i 5
I 000
737
Fircd Assr. t s
Bui l c l i nss
{achinen
Fixtures ni flrttings
Vchic les
Cur ren t Assc t s
S, ,r n L-
Dcbtors
Bank
Cash
Cur rcn t L i a u i l i t i e s
Cre r to r s
Working capi ta l
Nct . \ssc ts
Fin lnccd b l ' :
Ordinary sharcs of f I cach
S l l r r , ' n . ^ - i . r r l r u r l l
Profi t& loss cscrve
Crp i t a l I . -mployd
80
3 0
60 0
1 0 0
40
300
50
204
5 1 0
25
37
l8()0
, t a+o
95A ITT
6
J
l i i J
l.r5A 1
74054
55.+ 740
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a
a
a
a
Feeling Good Lirni tcd. i s o sc t t le he purchase onsidcrarionb1, ssuing o thc sh: rrcrrordcrsfl:l':::::xll"r nrircd;;ii;;i"ok'"'Lin',i,"0
",ai,"ry,rio,,",nFccringr.rrLir'ircrrrruccr
r : : i l i " : J . rdLirni tcc ls to takc- . r 'c r hc osscrs nd iabi l i t ic -s: r r-. .ok Atuc, rvi rh i rc i r l l t r*i ' r :
. Thc buildings vcre cvalucd s.fol lows:Fcrnme ata l le imircd SOOOOOThc Lookc Limitcd1450 0b;
""
The machine* of Thc Lookc Lir, i rcd ,. .as'alucd t 40 00 0Thc fixturesanci itrin-r.rsr Fr'nm'rc iraile Linritcdu,crc varued t f (r0 00 0The vchic les f The LookcLinrire,d ,crc alucd t 45 00 0The net ca l isable a lue f the stock u,as s ollou,s:Femme Faral le inr i rcd :0 004
- '
The Lookc Lirni tcd gO 000 iDebtors f r8 000 of Trre ooke Limitcd 'ere *.ri tren ff as b.c i crcbts .Good*'it u'as aiued at 75 000 for Fenrmc Fatatc Lirnircci rr dt f . lO000 or Thc Lookc Li ' i i ted
- - -" 'rrrL dL(rrrclnt r lcd r - .The purchasc r iccof Fcrrr-rc-aratc Li 'ri tcd was 7(r.1 00.
Required:
(a) (i) Calcuiate lrepurchase rice of The ao:I. Linrited.
ttt'iiili,lol\'',manv
hareshemcrnbe^ r'r" Looke irnitcdi,
(b) ln the books of Femnrc ara l lc imited.prcpare he
(1)
,. . . ,r," in Feci ingCood
t 6 )
(Total 6 trarks.;
( 1 )
accuunt .
Sundry harcholdersaccount
(c) Prepare he balancc hcct f Fecl ingCood Lirni tcdas a t I Apri l2007.
to,,;11iliil;:r",-:.i,:leholdcr
in Fcrrr,e Fatalre imited.As srrannir.s dcccu,ranr c\aruarc
( - i )
( 1 )
( i I
t h c
Answer space or oucstion paper.
Turn or c r
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SECTIOIi B
SOURCE NTATERIAL OR USE WITH QUESTION 4
4. Blackrington overs FootballClub Limitedhas been romoted o he National ootball eague. o
ha'e room br more people, he directors re considiring dding 000 extra eats n a ncw stand'
Thc nerv standwould cost 8 000 000 and would be expected o ast or 25 years. Atier 25 years
thc resiciurl alue of tirestand s estimated o be l00 000'
it is cstimatcd. hat hc ncrvstand vould esult n extra pcople s bilorvs:
. 13 noimll matches year, when 80% of the seats vouldbc sold
. i soccral latchcs a ycar. vhcn 909/o f the seats ould be sold
The seat riccs or every normalmatch vould e l5 each or the next wo years' ising o i8 each
fnr tl-rebilorving lrrce vears. eat rices or every specialmatch i'ouiC e 20 each or the next
i\vo yei-rrs,ising o t2'1 each or the bllowing hree ears'
The unning expcnscs f the new stand or each f the irst rwo years re estimated o be 1100 000
p )r )/e3r, nituding dcpreciation. t the start of the hird year, unning xpenses reexpected o
in.r""r. b;- 20 000. Runninq xpenses villstay at his evel or the oll6rving wo years.
T6e directors f the football lub equire he stand o pay back vitlr.inivc years.
R c q u i r e d : ,_ .
(a) Calculatc he payback criod or the new stand, horving our answcr n ycars and ntonths'' ( 1 2 )
(b) Eraluetc whcthcr thc invcstmcnt n thc new stand s , , i 'or thr i 'h i lc .
(Total 16 marks)
Answ'e r p rcc or qucs t i on . l s on pagcs 2 and 3 of thc qucs t ion apc r.
\ 11 5 7 7 , \
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SOURCI ] \ IATERIALFOR usE \ ' tTt{QU[sTtoN
r i l . ' : . - : : _ - : . : , - : t . . r . t r r r s : r 1 . f . * , h o c o u l d c a c h \ \ _ o r l q l q _ o u r. u c c k . T h c r. c a r c l 0 n r a c h i ' c s * . ' i c 'ca' c-acht',ijFN-r ' - l '
"i,n."r,
or";iiit';ffi for50 rours weck acrrThc fol lorrng in r,,rnra on
ProductLabour hours pr-,r ni tMachinc rours er uni lMaxinlum sales ni tsSe l l i ng r i ce e r un i rVariable osts cr unit
r s a r a i l a b l c o r n c c k 2 7 :
i , ., h .
l rT
lt i n
u1 o
f l 9
( .- )
r50f.9
L1 . 51 . 5
:00f.21f9
M' . )I
r 0 0
{ ' l 1
( o
f t O , f 5
Required:
t"'
;,Tflil: l:Jlilj:::.[,11""rrtat shonasc rmachinc
ours nd ot abourours
(b) calculate he optiltlumproductior hat *'iil give he maximum profit for week 27 .(6)
profit for u'eek 27 at the optimunr production evel if fixed cosrs or
(2 tEvaluate hc oprio's a'ailabre o Muritha with regard o the direct rabour taff.
. (1)
(Tota l 6 nrar. l i s)
r s t he
(1 )
(c) Calculate thc fbrccasru,eek 27 are f2 500.
Ansrver pace or orestion paper.
Turn over
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I
SOURCE MATERIAL FOR USE \'ITH QUESTION 6
6. Soiar Chocolarcs lc s a major producer elling hree hocolate ar productsJupiter' eprune nd
Satum. Normal monthly sales or these ars are:
Jup i t c r 3 rn i l l i on Neptune 2 million Saturn,l million
Tlie fbllorving pfonnation elatcs o sales n cxceptional onths:( i ) in N,: , '"crnbcr.a les br Jupit ' .-rnd Neptunc vi l ldouble '
(ri) il \(ivcnlbdr. slics ibr Saturn i'ill increasc ,v50o'6'
tiii) In Dccernbcr. alcs br Jupitcr nd Neptune will be our iinesgreatcr han a normal month'
ri.,.) n Dcce nbr.r, alcs or Saturn vili increasc y another 0')i, n thc Novcmber igure'
Requ red :
(:r) Consiruct a salcs buclgct for each of tire 6 months July to Dccembcr. \\ ' i lirin the totalsales
budget. siroi,i tltc for.ccast ales cr the Jupit,- 'r. eprune and Saturn bars. (4)
Kce pi 'g l i i s tocks o a ni in imum is a pol icy of Solar Chocolates lc . Product ion s nonnal lycanied
or-rt )nc n.ionih bcfbre salcs take place in ihe shops. This is not always possiblc- n relation to th ecxccptionei months because he monthly capacity for production is :
Jup i t e r 6 mi l l i on Sarurn 6 million
production facilities tbr onc bar cannot be used o iiroduce another bar. In order o mcet exceptional
sa les 1 Nor.cgr i lcr and December, product ion schedules may hal 'e o bc adjusted, t t t a minimtrnt
u-ii i.i-:monih's lcad limc mr.rst pplrv. ,.
br ts ' . i i l i rc turn o normal
. . \ n c s scn t i l l ng rcc l i cn tn a l l th rcc ba r s s ' choco le t e cn tmb ' . E l c h o i t i l . ' i l i ; . ' . -b a : s con ta ln s
I gr ;rms of chocrcla tc rumb. ln order o kccp stocks o a minintunr. hc chocol l lc crunlb rcquired
is ocl ivcrcd in ' .hc same nlonth as product ion.
Neptune 5 rni i l ion
( c ) C o l s t r t i c t Lr o ta l s tock bgdgc t tb r. ' a ch o I t l t c ' 6 n ton lhs J ' . 111 't l
c i ' ' . t t i tb .
tor chocolate
(2 )
(d ) Elu lLr : i t chc po l i cy o f So la r Choco la te s l c o f k . ' cp ing tock o : l l l l l n r r t t u l n '(4 )
(Tot :r l l6 nr lrks)
Ans* ' c r sp : l c0 o r q u c s t i o n 6 i s o n p : l g c s 16 and l 7 o f thc t l r t e s t i r t n l p c r :
\ r : 5 7 1 i . - \ l 0
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7.
souRcE J\,TATERIALFoR usE \\,ITH QUESTTON
I:],lO:": Linrircd produccs saris.,?.:,:-;.'"0
Product on ngur"r. ir,.. .l r use,s f lexible
Dudgcrarrd acrual no^:.1*"t'1*s'slcnr. it-qures or prod uc,iol.ttd"-
pt:prt cs rt on t 'n lor Apri l arc gi . ,cnd .
.-\
Dircct ,n",."in.,-.-.-..-..---.----..--.-.-..-..---=- ; v l r L L r r r r a r L , ' a i s
H : . == I5*k; --____=i_1luoo i 2o5elFi^.d ou".h..--F i 5-i 9(ro' j
Total cosl of producrio===--- ; 2 3 0 0 - i-_ : 300I - - r r v u u u u o n
65j50 7ss6;-I\4ana-ecmc-nt*,as satisfie^ rh^, ^-- ,=---
isfied that some bud_set figures \\,erc rlct cxr.rl\,.. eacit sari u,as bLdger..l r^ ..^_. each arihourd:::9 :"
use4 nerrhaveakc-nh";;,r;'b:ll,ffiT:lilj::*:Jl:", andhis as achicr,ed
. eacharihurd;;;"i;; ;l:,, j;11,il?:li:J::ffiilljJ:.lH;
Required:
(a) Prcpare thb lexibte h,,.r.,^.ble budger or a producrion of 6 600 sarjs.
(b) Calculate,clearl,vsrating he ormula used, he :(i) marerialsprice variance;
(i i) Jabour atc varjance.
(c) Explain thrce pcssible causes of the rnaterials price
(d) Evaluare hou.acLimited.
"-" adcurote ly the management accountanr
(Tora l 6 marks)
(3)
(3 t
(3)variance calcr i la tc t j in (b)( i ) .
G)has ser hc buclgcr orAprii for Rajnbou.
(1)
Answer space or question 7 is 1n p"g"r Ig and 19 of the question paper.. . ' , , " l ] ,
l l - - , ' '' " t l '