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Examiners use only
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Centre No.
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Paper Reference
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Paper Reference(s)
WAC02/01Pearson Edexcel International Advanced LevelAccounting (Modular Syllabus)Unit 2: Corporate and Management
AccountingTuesday 21 January 2014 AfternoonTime: 3 hours
Materials required for examination Items included with question papersNil Source booklet
Instructions to CandidatesIn the boxes above, write your centre number, candidate number, your surname, initial(s) and signature. Check that you have the correct question paper.Answer FIVE questions, choosing TWO from Section A and THREE from Section B.Indicate which question you are answering by marking the box ( ).If you change your mind, put a line through the box ( ) and then indicate your new question with a cross ( ).All calculations must be shown.Write your answers in the spaces provided in this question paper.Do not return the insert with the question paper.
Information for CandidatesThe marks for individual questions and the parts of questions are shown in round brackets: e.g. (2).There are 7 questions in this question paper. The total mark for this paper is 200. There are 44 pages in this question paper. Any blank pages are indicated.Calculators may be used.The source material for use with questions 1 to 7 is in the enclosed source booklet.
Advice to CandidatesWrite your answers neatly and in good English.
This publication may be reproduced only in accordance with Pearson Education Ltd copyright policy. 2014 Pearson Education Ltd.
Printers Log. No.
P43183AW850/WAC02/57570 1/1/1/1/1/1/1/1/1
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SECTION A
Answer TWO questions from this section.
If you answer question 1, put a cross in this box .
Source material for question 1 is on pages 2 and 3 of the source booklet.
1. (a) Calculate the net present value of the contract at the end of year 4.
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(b) Calculate the Payback period for the contract.
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(c) Evaluate the project for the company, using the calculations made in (a) and (b) and considering any other relevant factors.
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(d) (i) Complete the calculation, clearly stating any formula used, to nd the exact Internal Rate of Return, accurate to two decimal places.
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(ii) Using your answer for the exact Internal Rate of Return calculated in (d)(i), decide whether Tsevo Farms should invest in the project, giving a reason for your answer.
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Q1
(Total 52 marks)
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If you answer question 2, put a cross in this box .
Source material for question 2 is on pages 4 and 5 of the source booklet.
2. (a) Prepare a cash flow statement for the year ended 31 December 2013 for Zonqor Minerals plc in accordance with International Accounting Standard (IAS) 7 Cash Flow Statements (revised).
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(b) Evaluate the raising of capital for a plc by issuing a debenture instead of taking out a bank loan.
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(Total 52 marks)
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If you answer question 3, put a cross in this box .
Source material for question 3 is on pages 6 and 7 of the source booklet.
3. (a) Journal entries to show the items 16 above as recorded in the books of Kelontan Power plc. Dates and narratives are not required.
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(b) The Equity section from the Statement of Financial Position after the above items have been entered into the books.
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(c) Briefly explain
(i) two advantages to Kelotan Power plc of redeeming some of the 4% Redeemable Preference shares.
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(ii) two disadvantages to Kelotan Power plc of redeeming some of the 4% Redeemable Preference shares.
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(d) Evaluate the creation and utilisation of a Capital Redemption Reserve.
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TOTAL FOR SECTION A: 104 MARKS
Q3
(Total 52 marks)
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SECTION B
Answer THREE questions from this section.
If you answer question 4, put a cross in this box .
Source material for question 4 is on pages 8 and 9 of the source booklet.
4. (a) Prepare a Capital Budget to finance the launch of the new Zeus car.
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(b) Prepare a Production Budget, in units of cars produced, for each week of the first four weeks of production of Zeus cars.
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(c) Prepare a Cash Budget to show the amount received from customers for each of the first four weeks of sales of Zeus cars.
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(d) Evaluate the three payment options from the point of view of Auto Albion Motors plc.
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(Total 32 marks)
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If you answer question 5, put a cross in this box .
Source material for question 5 is on page 10 of the source booklet.
5. (a) Calculate for Saidpur Household Appliances Limited for the 6-month period ended 31 December 2013 the:
(i) break-even point in units of output
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