Balances of Debtors and Creditors1. William Ferguson started manufacturing and selling solar panels on 1 JanuaryYear 1. He provides you with the following information for the financial year ended31 December Year 1.Sales 268,000Cost of Goods Sold 93,800Advertising 9,000General expenses 27,000Wages 108,000Stock 30,800Debtors 24,500Creditors 13,500His business had the following fixed assets which were depreciated as follows:Machinery (at cost 1 January Year 1) 100,000 10% per annum diminishingbalanceVehicles (at cost 1 January Year 1) 48,000 20% per annum on costFerguson informs you that:In Year 2 profits were earned and expenses incurred at the same rate as in Year 1with the exception of a 5% increase in wages at the start of Year 2.On 30 June Year 2 his business was completely destroyed by fire and he was unableto resume trading until 1 January Year 3.He provides you with the following analysis of his bank account on 30 June Year 2.Opening Balance 1,500 CrReceived from customers 205,200Paid to suppliers 78,600Wages paid 47,250Advertising 5,250General expenses 11,250Refunds of overcharges to customers 3,200Drawings 12,000Balances of Debtors and Creditors on that date were 23,200 and 16,300respectively.[X209/13/01] Page twoMarks1. (continued)(a) Calculate:(i) Gross Profit Percentage for Year 1;(ii) Sales for 6 months ended 30 June Year 2;(iii) Purchases for 6 months ended 30 June Year 2. 7(b) Prepare the Trading and Profit and Loss Account for 6 months ended 30 JuneYear 2 and a Balance Sheet at that date. 39Fergusons business insurance covers the loss of assets and the loss of profits for upto one year during any period he is unable to trade.(c) Calculate the total value of the insurance claim Ferguson will make. 4(50)[Turn over[X209/13/01] Page threeMarks2. PART AAnderson PLC and Watson PLC provide you with the following financialinformation for the year ended 31 December Year 3.Anderson PLC Watson PLC000s 000sSales 480 400Cost of goods sold 338 288Expenses (excluding interest) 72 76Interest charges on loan and overdraft 6 4Profit after interest 66 32Fixed Assets 240 200Stock 56 48Debtors 40 40Bank 64 Dr 32 CrMortgage repayable Year 16 42Creditors 28 96Ordinary Shares of 50p each 200 100Share Premium 30 20Profit and Loss Account balance 100 40All transactions are on a credit basis. Stocks, Debtors and Creditors haveremained constant throughout the year and both companies charge similar sellingprices.The directors of Anderson PLC are convinced that their company:1 obtains more favourable purchase prices from suppliers;2 is more efficient at controlling expenses;3 has better credit control;4 has more rigorous stock control;5 makes better use of their fixed assets.Discuss whether Anderson PLCs comments are justified. Your comments shouldbe supported by appropriate workings. 20[X209/13/01] Page fourMarks2. (continued)PART BYou work for a firm of financial advisors and have been asked to analyse theinvestment performances of the following 2 companies.Bowlers plc Rounders plcNet profit after interest and tax 150,000 350,000Ordinary Shares of 1 each 200,000 1,000,0005% Preference Shares 250,000 Nil8% Debentures Nil 500,000Ordinary Shares market price 1ú75 1ú50Ordinary dividend per share 10p 8p(a) You are required to calculate for each company:(i) Dividend yield;(ii) Dividend cover;(iii) Earnings per share;(iv) Price/earnings ratio.Answers should be given to 2 decimal places. 8(b) (i) By analysis of each of the ratios calculated above state the advice youwould offer to a potential investor. 8(ii) Calculate the Capital Gearing Ratio for each company. 2(iii) Explain which company would be the better investment in periods ofhigh profit. 2(40)[Turn over[X209/13/01] Page five3. Merchant plc has provided the following data for the year ended 31 DecemberYear 2.Trial Balance as at 31 December Year 2.Dr Cr000s 000sSales 2,400Purchases of finished goods 500Wages and salaries 1,000Stock on 1 January Year 2 250General expenses 420Debenture interest paid 20Discounts (Net) 10Carriage inwards 10Directors fees 65Debtors and creditors 450 80Bank 720Land and warehouses at cost 2,000Equipment at cost 1,000Vehicles at cost 600Provisions for depreciation:Equipment 200Vehicles 90Interest received 25VAT 6010% Debentures (Years 410) 400Ordinary Shares of 50p each (fully paid) 2,5008% 1 Preference Shares (fully paid) 1,000Share Premium 100Investments at cost (Market Value 70,000) 60Profit and Loss Account balance at 31 December Year 2 2507,105 7,105In addition:1 Stocks of Finished Goods at 31 December Year 3 188,000.2 Auditors Fees unpaid 15,000.3 Prepaid General Expenses amounted to 5,000.4 Allocate expenses as follows:Cost of Sales Distribution AdministrationWages and salaries 30% 40% 30%General expenses Nil 20% 80%Depreciation of Equipment 80% Nil 20%Depreciation of Vehicles Nil 90% 10%[X209/13/01] Page sixMarks3. (continued)5 Depreciation is to be charged as follows.Equipment 20% on reducing balance.Vehicles 20% on cost.6 Corporation Tax charge for the year is 45,000.7 The following dividends were paid on 20 December Year 2. No entries hadbeen made in the accounts of the plc.Ordinary share dividend of 1p per share.Preference share dividend paid in full.(a) Using the above information calculate:(i) Cost of Sales;(ii) Distribution Costs;(iii) Administration Expenses. 16(b) Prepare the Profit and Loss Account for the year ended 31 December Year 2 ina form suitable for publication, together with a Balance Sheet on that date. 24(40)[Turn over[X209/13/01] Page sevenMarks4. The fact that a business has made a healthy profit does not necessarily mean thatthere is sufficient ready cash available to meet its needs.(a) Explain the purpose of a Cash Flow Statement (FRS1) and outline theaccounting statements required to prepare it. 6(b) Identify the different sections contained in the Cash Flow Statement anddescribe the information included in each section. 24(30)5. Explain how the following are dealt with when preparing a Consolidated BalanceSheet.(i) Goodwill(ii) Post acquisition profits(iii) Minority Interest(iv) Unrealised profits(v) Consolidated reserves (30)[X209/13/01] Page eight[Turn over for Section B on Page ten[X209/13/01] Page nineSECTION B MarksYou should attempt 3 questions from this section.Question 6, AND Question 7 OR 8, AND Question 9 OR 10.6. Ring Ltd has been formed to produce 4 products W, X, Y and Z. Each productpasses through 3 departments Machining, Assembly and Finishing.Estimated data for Period 1Product W X Y ZUnits Produced 200 250 400 210Labour hours per unit 10 8 10 8NOTES:1 Labour hours are split between departments as follows.Machining 50%Assembly 30%Finishing 20%2 The percentage of labour hours spent on machines in the MachiningDepartment isProduct W 80%Product X 50%Product Y 60%Product Z 75%.3 Departmental Overhead CostsMachining Assembly Finishing19,406 10,164 9,222(a) (i) Calculate the factory-wide rate for overhead absorption based upondirect labour hours worked.(ii) Calculate the overhead charge per unit for each product. 7(b) (i) Calculate departmental rates for overhead absorption for eachdepartment using the following bases.Machining Rate per machine hourAssembly Rate per labour hourFinishing Rate per unit(ii) Calculate the overhead charge per unit for each product. 18[X209/13/01] Page tenMarks6. (continued)The factory overhead costs were further analysed on an activity basis as follows.Activity Cost Cost DriverSet up 20,000 Number of production runsMaterial requisitioning 8,000 Number of requisitionsQuality control 5,492 Number of production runsOrder despatch 5,300 Number of batches soldProducts W, X and Y will be produced in batches of 50.Product Z will be produced in batches of 70.All sales will be in batches of 10.The number of requisitions for each product will be 10.(c) (i) Calculate the overhead absorption rate for each activity.(ii) Show for each product the total overhead absorbed per activity.(iii) Calculate the overhead charge per unit for each product. 25(50)[Turn over[X209/13/01] Page elevenMarks7. Wagner plc has been formed to manufacture 4 products. Budgets will be producedfor each 60day budget period each year.Estimated data for Period 1 Year 1Product A B C DProduction (Units) 1,000 2,000 3,000 2,000Costs per unit ()Materials 10 10 5 9Labour 20 8 25 32Variable overhead 5 6 10 15Selling price per unit ()115 44 80 96Fixed costs will be 160,000.No stocks will be held.Production will be scheduled at a uniform rate throughout the budget period.(a) Calculate:(i) the weighted average contribution per unit for each product;(ii) the budgeted total contribution and profit for Period 1;(iii) the break even point in units of each product and in total;(iv) the number of days production required to break even;(v) the sales in units and value of each product required to provide a profitof 72,000 after tax at 25%. 25Wagner plcs directors are also considering the addition of Product E which wouldcost 50 per unit and take 2 hours to produce. Fixed costs would rise to 250,000.Wagners plcs capacity is limited by the shortage of labour to 18,000 hours perbudget period. Labour costs 10 per hour.The demand for Product E will be dependent upon its price as follows.Price Demand90 3,000 units120 2,000 unitsThe minimum production run of any product is to be 1,000 units.(b) (i) Calculate the effect on maximum profits if Product E is produced in eachof the above quantities.(ii) Advise Wagner plc whether or not to produce Product E and at whichlevel of output. 15(40)[X209/13/01] Page twelve[Turn over for Question 8 on Page fourteen[X209/13/01] Page thirteenMarks8. PART AFire Ltd produces a single product called Magma.The following data relate to Year 3.Budgeted ActualProduction and Sales (units) 4,000 3,975Selling price per unit 300 310Direct material usage 8 kg per unit 31,600 kgDirect material cost 8 per kg 259,500Direct labour 10 hours per unit 40,250 hoursDirect labour cost 10 per hour 394,450Variable overhead 30% of labour cost 115,000Fixed overhead 15 per unit 61,000(Recovered at a rate per unit)(a) Calculate the total standard cost of actual sales for Year 3. 4(b) Calculate the following variances.(i) Sales price(ii) Sales volume(iii) Material price(iv) Material usage(v) Labour rate(vi) Labour efficiency(vii) Variable overhead expenditure(viii) Variable overhead efficiency(ix) Fixed overhead expenditure(x) Fixed overhead volume 24[X209/13/01] Page fourteenMarks8. (continued)PART BIce plc has provided the following budget data for Month 6.Output 6,000 unitsCosts:Materials 1,200 kg @ 3 per kgLabour 1,800 hours @ 8 per hourDirect expenses 1,500Maintenance 1,000 (400 fixed)Heating and lighting 1,600Rent and rates 2,000Salaries 10,000Miscellaneous expenses 3,000 (1,200 variable)Ice plcs maximum production capacity is 10,000 units.50% of all sales will be for cash at 10 per unit and the remainder sold on credit ata discount of 5% of the cash price.Assuming an activity level of 80% prepare a budget statement for Month 7 andcalculate the budgeted profit for the month. 12(40)[Turn over for Questions 9 and 10 on Page sixteen[X209/13/01] Page fifteenMarks9. Outputs from production processes may be higher or lower than expected.(a) Explain the treatment of production losses or gains in process accounting. 12(b) Discuss the problems of arriving at an accurate cost per unit in processaccounting (other than the problems caused by production losses or gains). 18(30)10. (a) Explain the differences between mutually exclusive and alternativeprojects. 6(b) Describe 4 methods of investment appraisal, stating the advantages anddisadvantages of each. 20(c) Explain why investment appraisal methods based upon discounted cash flowsmay not be suitable for use when comparing mutually exclusive projects. 4(30)2.Trial Balance1. The following is the Trial Balance of Glencairn plc at 31 December Year 4.000 000Sales 430Purchases 246Stock at 1 January Year 4 30Administration Expenses 36Selling and Distribution Expenses 33Warehouse Expenses 16Discounts (net) 4VAT 16Wages 40Provision for Doubtful Debts at 1 January Year 4 5Debtors 60Creditors 35Quoted Investments 70Bank 6Goodwill 20Preliminary Expenses 10150,000 1 Ordinary Shares 15010% Debentures 80Buildings (at cost) 100Office Equipment (at cost) 30Motor Vehicles (at cost) 50Provisions for Depreciation at 1 January Year 4:Office Equipment 8Motor Vehicles 10Share Premium 30Interim DividendOrdinary Shares 6Rent and Rates 5Profit and Loss Account balance at 1 January Year 4 10768 768[X209/12/01] Page two1. (continued) MarksNOTES at 31 December Year 4(1) Stock valued at 20,000 (cost) and 24,000 (market value).(2) Administration Expenses prepaid 2,000.(3) The Provision for Doubtful Debts is to be adjusted to 10% of Debtors.(4) Dividends of 3,000 are due from Investments.(5) Provide for Depreciation for the year as follows:(i) Office Equipment 10% on cost.(ii) Motor Vehicles 20% on the diminished balance.(6) Provide for Corporation Tax at 25% of Net Profit.(7) Buildings have been revalued at 110,000 the surplus on revaluation is to be transferreddirectly to a Revaluation Reserve.(8) Preliminary Expenses are to be written down by transfer from Share Premium.(9) A cheque for payment of Rent for 1,000 for this year has been completely omitted from thebooks and has still to be recorded.(10) The Directors propose to:(i) pay a final dividend of 10% on the Ordinary Shares;(ii) write down Goodwill by 12,000.You are required to prepare (for internal use) from the Trial Balance and Notes:Trading and Profit and Loss Accounts (including the appropriation of available profits) for the yearended 31 December Year 4 and a Balance Sheet as at that date. (50)[Turn over[X209/12/01] Page threeAny incorrect figure not supported by adequate working will receive no marks. Marks2. PART AThe following information has been extracted from the accounts of Joseph McCaig, a retailer, at31 December Year 4.Sales (75% credit) 160,000Closing Stock 10,000Gross Profit Ratio 40%Rate of Stock Turnover 10 timesAverage Debtors 12,000Expenses Ratio 20%Capital 120,000Fixed Assets 80,000(a) Calculate the following.(i) Mark-up Ratio(ii) Opening Stock(iii) Purchases(iv) Return on Capital Employed(v) Debtors Collection Period (days)(vi) Fixed Asset Turnover. 15Joseph sets the following targets for Year 5 for the business. Increase Rate of Stock Turnover to 12 times Reduce Average Stock by 25% Increase Sales by 15% Reduce Expenses Ratio to 15%(b) Calculate the following for Year 5.(i) Cost of Goods Sold(ii) Gross Profit(iii) Purchases(iv) Expenses(v) Net Profit. 10(c) Calculate the Gross Profit Ratio for Year 5 and give 3 reasons for the change in the ratio fromYear 4 . 5[X209/12/01] Page four2. (continued) MarksPART BAt 31 December Year 2 the final accounts of Weir Enterprises showed a Net Profit of 54,000.After an audit of the accounts, the following errors and omissions were discovered.(1) A sales invoice for 4,000 had been entered as 400(2) Wages had been underadded by 3,200(3) VAT of 420 had been omitted on Purchases(4) Rent Received of 500 had been entered as Rent paid(5) No entry had been made for the sale of a van (NBV 3,200) for 2,500.(6) Expenditure of 520 on a new laptop computer had been entered in the Profit and LossAccount(7) Stock valued at 300 had been omitted from closing stockPrepare a Statement to show the amended Net Profit figure after correction of the above errors. 10(40)[Turn over[X209/12/01] Page fiveAny incorrect figure not supported by adequate working will receive no marks.3. The following is a summary of the receipts and payments of the Topspin Tennis Club for the yearended 31 December Year 2.Receipts 000Subscriptions (Year 1) 2Subscriptions (Year 2) 60Subscriptions (Year 3) 1Bar Sales 21Sale of Raffle Tickets 3Dinner Dance Tickets 4Vending Machine Takings 4Life Membership Fees 20115PaymentsEquipment (1 July Year 2) 8Carriage on Bar Purchases 1Raffle Prizes 1Wages 21Raffle Expenses 1Coachs Honorarium 2Electricity 10Loan Repayment 4Dinner Dance Costs 2Stationery 2Creditors for Bar Purchases 9Rent of Clubhouse 24Vending Machine Rental 287Assets and Liabilities are as follows:1 January Year 2 31 December Year 2000 000Accumulated Fund ? ?Equipment at cost 6 ?Creditors for Bar Purchases 2 1Subscriptions in Advance 3 1Subscriptions in Arrears 2 4Bar Stocks 3 2Bank 12 ?Stock of Stationery unused 1Loan 10 ?Rent due on Clubhouse 4 3[X209/12/01] Page six3. (continued) MarksNOTES as at 31 December Year 2.(1) Equipment is to be depreciated at 10% per annum on cost.(2) One third of Wages relates to the Bar.(3) The Electricity is split between the Bar and the Clubhouse in the ratio of 3:2.(4) 80% of the Life Membership Fees are to be capitalised.(a) Calculate the Accumulated Fund as at 1 January Year 2. 4(b) Prepare:(i) a Bar Trading and Profit and Loss Account for year ending 31 December Year 2; 11(ii) an Income and Expenditure Account for year ending 31 December Year 2. 22(c) Calculate the closing balance on the Bank Account at 31 December Year 2. 3(40)[Turn over[X209/12/01] Page sevenMarks4. (a) State 4 stakeholders with an interest in the financial performance of a partnership. 4(b) List the steps for the admission of a new partner. 4(c) Explain the term limited partner. 2(10)5. (a) State 6 duties of a financial accountant. 6(b) Compare Preference Shares with Ordinary Shares. 4(10)[X209/12/01] Page eight[Turn over for SECTION B on Page ten[X209/12/01] Page nineSECTION B MarksYou should attempt 3 questions from this section:Question 6, AND Question 7 OR 8 AND Question 9 OR 10.Any incorrect figure not supported by adequate working will receive no marks.6. PART ASharp Ltd manufactures 3 products, R, S and T in its Armadale factory.The following data apply to the Armadale factory for Year 3.Profit and Loss Account for the year ended 31 December Year 3Product R Product S Product T Total(000) (000) (000) (000) (000) (000) (000) (000)Sales 525 600 350 1,475Less:Materials 150 170 100 420Labour 100 140 100 340Variable Overheads 50 300 100 410 50 250 200 960225 190 100 515Fixed Costs 110 110 110 330Profit/(Loss) 115 80 (10) 185Each product takes 2 machine hours to make.Product R Product S Product TUnits Sold 5,000 2,000 1,000(a) Calculate for each product:(i) unit selling price; 3(ii) unit total variable cost; 3(iii) unit contribution. 3(b) Calculate the total machine hours worked in Year 3. 2[X209/12/01] Page ten6. (continued) MarksYEAR 4Estimated Data for Year 4Product R Product S Product TDemand in units 5,000 4,000 3,000In Year 4, Sharp Ltd intend to increase machine capacity by 25% in order to maximize profits. As aresult Fixed Costs will rise by 100,000 per annum.(c) Calculate the units to be produced of each product and the total estimated profit. 17YEAR 5 Demand for Product R will increase to 8,000 units mprovements in efficiency will result in one unit of Product R taking only one machine hourIto make Variable cost per unit of R will fall by 3 All other costs, prices, demand and machine capacity will remain unchanged from Year 4.(d) Calculate the profit or loss which would be made in Year 5 if Sharp Ltd decide to meet thedemand for Product R in full. 10(e) Advise the management of Sharp Ltd whether or not to meet the market demand forProduct R. Give a reason for your answer. 2PART BKingsgate Ltd produces Product Y in 2 processes? A and BDuring the month of April Process A incurred total costs of 8,160, including 500?kg of materialcosting 5,000.Process A expects to lose 4% of input material during the process.During April 450?kg were transferred from the process to finished goods.(a) Calculate:(i) the abnormal loss in kg during April;(ii) the cost per kg of the good output if all losses are waste. 6(b) Calculate the change in cost per kg of good output if expected losses were scrap and could besold for 4ú80 per kg. 4(50)[Turn over[X209/12/01] Page elevenAny incorrect figure not supported by adequate working will receive no marks. Marks7. PART AThe following budgeted data relate to Scotia Enterprises plc for the period July to NovemberYear 4.July August September October NovemberSales (in units) 4,000 4,300 4,600 5,000 4,800Credit Sales are expected to be 40% of total sales.Closing Stock at the end of each month is equal to the level of credit sales of the following month.(a) Prepare the Production Budget for the period July to October. 6The following information is also available.(1) Bank Balance at 1 August is expected to be 12,000(2) The retail selling price per unit is 40 Credit Sales are to trade customers at a discount of 10% Credit Sales are paid for one month after sale Monthly bad debts are estimated to be 10% of credit sales(3) Costs are as follows. Materials 14 per unit, payable in the month before production Labour 12 per unit, payable in the month of production Variable Overheads 10 per unit 50% payable in the month of production and the restin the month following production(4) Fixed Costs, excluding depreciation of 1,500, are 3,000 per month(5) A van owned by the business will be sold during the month of August. The purchase price ofthe van was 12,000 and at time of sale will have an expected net book value of 6,500. It isestimated that it will be sold for a profit of 300.(6) The company will issue 20,000 Ordinary Shares of 50p each in August at a premium of 10pper share.(7) The company will receive a loan of 30,000 from the bank in August. The bank loan,including interest of 5% per annum, will be repaid in 12 equal instalments starting inSeptember.(b) Prepare the Cash Budget for the months of August and September Year 4. 24[X209/12/01] Page twelve7. (continued) MarksPART BOn 1 March Year 3 Brooks Ltd held 150 units of Item No. PAR72 used in production of one of itsfinished goods. These units had been bought for 2 each.Brooks Ltd then bought 400 units on each of 4, 12 and 21 March.Issues to production during March were as follows.8 March 300 units15 March 420 units29 March 440 units(a) Calculate the number of units remaining in stock after the issue on 29 March. 3The items bought cost as follows.2ú10 each on 4 March2ú20 each on 12 March2ú25 each on 21 March(b) State the cost per unit of closing stock if First-In-First-Out (FIFO) was used as the methodof pricing. 1(c) Prepare a Stock Record Card for March using Last-In-First-Out (LIFO) as the method ofpricing issues. 6(40)[Turn over[X209/12/01] Page thirteenAny incorrect figure not supported by adequate working will receive no marks. Marks8. Nivens Ltd operates a system of separate absorption rates for each of the production cost centres inits factory.The factory has 3 production cost centres, A, B and C, and 2 service cost centres, X and Y.The following estimates have been made for Year 3.Overheads Total CostRent 144,000Canteen Costs 90,000Power 160,000Heat and Light 36,000Machine Insurance 9,000Indirect Materials 41,032The following details are also available.A B C X YNo of employees 120 75 60 30 15Kilowatt hours (000s) 20 48 12 Area (000s sq metres) 24 36 18 12 6Value of machinery (000s) 30 90 60 Indirect materials 7,720 7,517 13,910 8,730 3,155Machine hours 10,200 26,480 5,600 Labour hours 38,300 20,000 10,440 5,100 2,600Direct wages 306,400 200,000 93,960 (a) (i) Apportion the overheads for Year 3 to the 5 cost centres using the most appropriatebasis in each case.(ii) Re-apportion the service cost centre overheads to the production cost centres, on thefollowing bases: Department X followed by Department Y.Department BasisX(including share to Dept Y) Number of EmployeesY Machine Hours 15Nivens Ltd intends to recover overheads in Year 3 by using the labour hour rate method in costcentres A and C and by the machine hour rate in cost centre B.(b) Calculate for each production cost centre the overhead absorption rate to be used in Year 3. 6[X209/12/01] Page fourteen8. (continued) MarksNivens Ltd has been asked to give a quotation for a job to which the following details relate.Direct material required 192Direct labour hours: A 30B 15 (including 10 on machines)C 6Nivens Ltd aim to earn a profit margin of 40% on selling price.(c) Using the information above and the relevant information calculated in (b) prepare thequotation showing clearly the final selling price. 19(40)[Turn over for Questions 9 and 10 on Page sixteen[X209/12/01] Page fifteenMarks9. (a) State 4 assumptions of break-even analysis. 4(b) Explain the following terms.(i) Profit Volume Ratio(ii) Margin of Safety. 6(10)10. (a) State the factors to be taken into account when setting re-order quantities. 4(b) Explain the following terms.(i) Opportunity Cost(ii) Semi-Variable Cost 6(10)3.1. Oliver and James are in partnership. The following figures relate to the year ending 31 DecemberYear 3.000Sales 410Sales Returns 10Purchases 160Purchases Returns 60Stock 1 January Year 3 20Stock 31 December Year 3 25Discount Received 5Expenses Paid 73Prepaid Expenses 3(a) Prepare a Trading and Profit and Loss Account for the year ending 31 December Year 3. 13The following information is also available for the year ending 31 December Year 3.000Salary: Oliver 15Drawings: Oliver 80James 60Capital Accounts on 1 January Year 3: Oliver 100James 80Current Accounts on 1 January Year 3: Oliver 30 (Cr)James 20 (Cr)The Partnership Agreement states that profits/losses are to be split between Oliver and James in theratio 2:1 respectively.(b) Using the information above and the information from (a), prepare the:(i) Profit and Loss Appropriation Account of the partnership for the year ending 31December Year 3; 6(ii) Current Accounts of each partner for the year ending 31 December Year 3. 7(c) List 2 sources of finance available to plcs which are not available to partnerships. 4(30)[X209/10/01] Page twoAny incorrect figure not supported by adequate working will receive no marks. MarksYou should answer all parts of this question on the Workbook provided.2. PART AThe following balances were extracted from the ledger of Matthew Stevenson at 1 January Year 2.Bank 1,500 (Dr)Equipment 5,000H Samson (Debtor) 300(a) Enter the balances above into the appropriate ledger accounts. 3(b) Using the following information complete the entries in the ledger accounts of Matthew,opening new accounts as necessary.Purchased goods 500 (plus 100 VAT) on credit from2 JanuaryCameron plcReceived a cheque from H Samson (Debtor) for 250 in full3 Januarysettlement of the amount owed 15PART BThe following figures are available for Maria Mendez, a sole trader, for Year 1.000Sales 300Opening Stock 11Closing Stock 13Cost of Goods Sold 180Gross Profit 120Net Profit 90Calculate the following ratios:(a) Gross Profit Ratio 2(b) Net Profit Ratio 2(c) Average Stock 2(d) Rate of Stock Turnover 2PART CGive an example of:(a) Capital Expenditure 2(b) Revenue Expenditure. 2(30)[X209/10/01] Page three [Turn overAny incorrect figure not supported by adequate working will receive no marks.You should answer all parts of this question on the Workbook provided.3. PART AThe Petty Cash Statement shown below gives details of East and Wests petty cash expenditure forthe week beginning 1 February Year 2.PETTY CASH STATEMENTPCV Cash Analysis ColumnsDate Details Cash In BalanceNo Out Cleaning Postage Stationery Travel01 Feb Imprest 100ú00 100ú0001 Feb Bus Fare 1 5ú00 95ú00 5ú00Cleaning02 Feb 2 7ú00 88ú00 7ú00FluidString03 Feb 3 4ú50 83ú50 4ú50and PensThe vouchers below have still to be recorded.PCV 4 PCV 5Petty Cash Petty CashVoucher Voucher04-Feb 04-FebDETAILS AMOUNT DETAILS AMOUNTEnvelopes 6ú75 Stamps 25ú25Total 6ú75 Total 25ú25Signature: M East Signature: R WestPassed by: D Houston Passed by: D HoustonPCV 6 PCV 7Petty Cash Petty CashVoucher Voucher05-Feb 05-FebDETAILS AMOUNT DETAILS AMOUNTTaxi Fare 32ú00 Window Cleaner 15ú00Total 32ú00 Total 15ú00Signature: M East Signature: R WestPassed by: D Houston Passed by: D Houston[X209/10/01] Page fourAny incorrect figure not supported by adequate working will receive no marks. MarksYou should answer all parts of this question on the Workbook provided.3. PART A (continued)(a) Complete East & Wests Petty Cash Statement using the Petty Cash Vouchers on Page fourfor the first week in February Year 2. 9(b) Restore the imprest on 8 February Year 2. 3PART BOn 30 September Year 1: the Bank Account in the books of Martin Davidson showed a debit balance of 535. the balance on the Bank Statement, received from the bank, showed a credit balance of 675.On checking the Bank Statement against his records Martin found the following differences.ITEMS WHICH APPEARED IN THE BANK STATEMENT BUT DID NOT APPEAR INMARTINS RECORDS.Interest Received 30Direct Debit 90Bank Charges 50(a) Using the information above update the Bank Account at 30 September Year 1. 8ITEMS WHICH APPEARED IN THE RECORDS OF MARTIN BUT DID NOT APPEAR INTHE BANK STATEMENT.Cash takings of 200 deposited in the night safe of the bank after closing hours on 30 SeptemberYear 1.Cheques drawn on 30 September Year 1 and sent to trade creditors but not presented for paymentby 30 September Year 1 were:Corolla & Co 450(b) Prepare the Bank Reconciliation Statement of Martin Davidson as at 30 September Year 1. 6PART CExplain the following terms:(a) Cash Discount(b) Trade Discount 4(30)[END OF SECTION A][X209/10/01] Page five [Turn overSECTION B MarksYou should attempt Question 4 and ONE other question from this Section.Any incorrect figure not supported by adequate working will receive no marks.You should answer all parts of this question on the Workbook provided.4. PART AThe following forecasted figures for Year 2 are available for Braxton plc.Cash balance at 1 May 20,000.March April May June
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