7/25/2019 Accounting 6001, 6002.PDF

1/24

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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

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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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21/24

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 , \

7/25/2019 Accounting 6001, 6002.PDF

22/24

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

7/25/2019 Accounting 6001, 6002.PDF

23/24

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

7/25/2019 Accounting 6001, 6002.PDF

24/24

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 '