Questions and Answers of Accounting For Cambridge International AS And A Level

Referring to information in Questions 2 and 4, calculate the total value of Thespa plc's closing inventory assuming that: • 4 per cent of the annual production of matons remains
Peter Ltd produces one product, the Baz. The standard direct material cost of each unit was as follows: 2.5 kilos of material at $4.80 per kilo = $12 per unit. During February 2015, the company
Thespa plc manufactures two products: matons and cratons. The company has the following cost pools and has established that the cost drivers within each cost pool are as shown.During November
Using the information given in Question 1, calculate the selling price of a breve and a minim. The directors of Morad Industries Ltd wish to achieve a profit margin of 20 per cent on cost. It
The following information is available about production costs. • The direct costs of product are as follows.• The company total factory overheads are $50 000. (Other overhead costs can be
The number of labour hours available in the assembly department in each of these months is 1450. a. Prepare a labour budget for each of the three months ending 31 March 2016. b. What advice
Carmon plc manufactures mountain bikes. The following information is available about productions costs budgeted for March 2017 and actual costs for that month.Required a. Prepare a flexed budget
Alexon Ltd is a company selling bicycles. The directions have an overdraft facility of $30,000, but are concerned about liquidity and wish to prepare a cash budget for the three months ending 30 June
Ali, Broc and Cheema have been in partnership trading as Abche They share profits and losses in the ratio 3:2:1. Gavin and Hanuko have been in partnership trading as Gavu. They share profits and
Morad Industries Ltd manufactures two products: breves and minims. The company has the following cost pools and has established that the cost drivers within each cost pool are as shown.During
Explain two possible reasons why a business may be interested in a quick payback period.
Rex Limited manufactures plastic storage boxes. The directors are considering buying a new, more efficient moulding machine to replace the existing machine. The new machine will increase output by 25
Identify a budget which is not useful to each of the following businesses and give a reason why: a. A school b. A firm of accountants c. A leisure complex d. A high street butcher.
Identify the advantages and disadvantages of using each of the following methods of capital investment appraisal: a. Payback b. The ARR c. The IRR d. NPV.
Paul Ltd produces one product. the Pax. The standard direct labour cost of each unit was as follows: 4.25 hours of direct labour at $6.20 = $26.35 per unit. During March 2015, the company
Chang Limited manufactures one item of kitchen furniture known as Excon. The following standard cost data is available for one unit of Excon.During March 2015, the budgeted production was 240
'Departmental managers should be left to their own devices and not restricted by budgets as then they are free to act in an unrestricted manner and so innovation will be achieved.' Discuss.
Mary Ltd produces one product: the Marl. The budgeted sales for April 2014 were 13 030 units at a selling price of S1.90 per unit. The actual sales during April 2014 were 12 200 units at a selling
The managers of Stanley Standen Ltd are considering the purchase of either machine Elpha or machine Fettan. The following information applies to these machines.Both machines are expected to last five
Hatim Limited manufactures one product, an office chair. Sales of the chair for the period April-July 2015 are expected to be as follows.Hatim Limited plans to hold 1500 metres of wood in
Using the information given in Question 2, calculate the selling price of a maton and a craton. The directors of Thespa plc wish to achieve a profit margin of 50 per cent on cost. It should be
Identify two uses for each of the following budgets: a. A cash budget b. A production budget c. A trade receivables budget.
Colin Ltd produces one product, the Col. The standard direct costs for each unit of Col are as follows: 7 metres of material at $5.75 per metre. 1.5 hours of direct labour at S5.60 per
The cost of capital for Patel plc is 14 per cent. The managers are considering a three-year project that will cost $100 000. The net cash flows for the project are expected to be:The extracts
Baku Limited is a manufacturer of ladies' clothing. The following information has been extracted from the company's budgets for the six months ending 30 September 2015.Additional
Referring to information in Questions 1 and 3, calculate the total value of Morad Ltd's closing inventory assuming that: • 10 per cent of the annual production of breves remains
Jameson Ltd operates over 13 periods a year. Each period consists of four weeks with five working days in each week. The sales for the next four periods are expected to be as follows:Assume that
Patrick Ltd produces one product, the Rick. The standard direct costs for each unit of Rick are as follows: 4 kilos of material at $42.50 per kilo. 30 minutes of direct labour at $7.40 per
The main cutting machine of Gawain Wilkins Ltd needs to be replaced. A replacement machine will cost S300,000. The current machine cuts 40,000 units a year. The number of units cut is expected
Identify two uses for each of the following budgets: a. A labour budget b. A trade payables budget c. A master budget.
Deborah Ltd produces one product, the Deb. The budgeted sales for each unit of Deb in March 2015 were 1500 units at a price of $32 per unit. The actual sales were 1750 units at a price of $34.50. The
One of the assembly machines at Roberts Ltd needs to be replaced. A replacement machine will cost $200 000, which is payable on purchase. The replacement machine is expected to last four years,
Romets Ltd manufactures a range of car accessories, one of which is called a 'grix'. Grix take 3.5 labour hours to assemble and the labour rate for assembly staff if $7.20 per hour. The
Kathryn Ltd produces one product, the Kath. The budgeted sales for each unit of Kath in April 2014 were 4200 units at a price of $26. The actual sales were 4280 units at a price of $25.50. The
Fratelli Ltd manufactures two products: hexo and zaco. The following information is available about production costs. • The direct costs of product are as follows.• The company total
Jemima Ltd produces one product, the Jem. The total budgeted direct costs for the business for January 2015 were n4 550. The following variances have been calculated.RequiredCalculate the actual
Ali Khan has a business selling computer games. All games are sold on credit to high street retailers. His predicted sales for the next three months are:Each game is sold for $20 each. Ali expects 60
Mandy Ltd produces one product, the Mend. The total budgeted profit for the business for February 2015 was S38 400. The following variances have been calculated. RequiredCalculate the actual
TickTock Ltd is a small company that sells antique clocks. The following budgeted information is available for the five months ending 31 October.Each clock costs $12.50. Each month 25 per cent of the
Carsley plc manufactures `grats'. The following information is available concerning fixed overhead expenditure for the year ended 31 March 2015. Calculate fixed overhead variances for the
Explain two benefits and two limitations of using a cash budget.
Orpen Ltd had budgeted to make a profit of $72,500 for the year ended 31 December 2014. However, actual profit was less than expected and an investigation has shown the following variances
David Ltd is a small business that manufactures teddy bears. The following information is available for the next four months:Additional information: • Each teddy bear sells for
• Shafiq hopes to start a new business on 1 March selling surfboards. • His balance at bank on that day will be $3200. • He intends to sell each surfboard for $160. On 1 June, the
The table shows the budgeted resources required for production and sales, and the available resources. Market research shows sales demand for 120,000 units.Identify the principal limiting factor
Peishan owns a business manufacturing drinking mugs. The business operates over 13 four-week periods with five working days in each week. Previously, Peishan had fixed production at 18 000 mugs per
Navin plc manufactures cricket bats. The following information is available for the year ended 31 January 2015.Additional information: • Inventories at 31 January 2015 were (in $000): raw
Cuppa and Cake is a charity that runs a small café to raise money for local children. The following information has been prepared by the treasurer for the year ended 31 December 2014.Additional
Seddel Ltd's financial statements prepared on 30 June 2014 are shown below.Additional information:The proceeds from the sale of non-current assets in the year ended 30 June 2014 was $88
In what ways are directors required to help auditors in their role?
The following information is available for Kanka Trading Ltd for the year ended 31 October 2014.Calculate for both wars: a. The dividend cover b. Earnings per share c. The price
Identify the two concepts that apply to the provision for unrealised profit.
Hole in One is a golf club. The following information has been prepared by the treasurer for the year ended 31 December 2014,Additional information:Prepare: a. A statement of affairs to show the
Vortex plc's statements of financial position at 31 December 2013 and 2014 are shown below.Additional information:• There were no disposals of machinery during the year ended 31 December 2014.•
Explain the distinction between a qualified and unqualified auditors' report. b Describe three important elements of an unqualified auditors' report.
Nikoloz Ltd manufactures a single product. Its goods are transferred from the factory at cost plus 25 percent. The following information is available at 31 October 2014.Prepare a statement of
Sing to the Sky is a club that promotes choral singing among teenagers. Every year an outdoor concert with an evening barbecue is given at the clubhouse to raise funds for the club. The following
Complete the following table. Inventory at cost ($) Mark-up ($) Inventory at transfer price (S) 12 000 20 26 000 40 ? 25 50 000 ? 10 33 000
Support Our Town (S.O.T.) is a charity that runs a small town's annual fundraising carnival. The following information has been prepared by the treasurer of the charity for the year ended 31 January
Tabco Products is a manufacturing business. It transfers all goods manufactured to the income statement at production cost plus 20 percent. The following figures relate to inventories held by
The Curtain-up Drama Club was formed several years ago. The club operates a life membership scheme. The club's treasurer is able to supply the following information about the year ended 31 December
Marco plc manufactures garden chairs. The following information is available for the year ended 31 January 2015.Additional information: • Inventories at 31 January 2015 (in $000): raw
Kingsly Theatre Club is an amateur dramatic club that has existed for many years. The club rents a local theatre with a café and the members regularly give performances to the town's residents. The
Give two reasons why auditors might express reservations in their report to shareholders.
The following information is available about Gamble plc:• In 2001 it issued at $0.75 a number of ordinary shares with a nominal value of $0.50 each.• During 2007 Gamble Ltd issued $200,000 6
What steps would you introduce to ensure that a business's computerized accounting information was secure?
Helen, Ian and Jane have formed a joint venture to grow and sell vegetables. The vegetables will be grown on land owned by Helen. Ian will help with the cultivation and harvesting of the vegetables.
The treasurer of the Glades Social Club is able to provide the following information about the club's most recent financial year which ended on 30 June 2014.Additional information: • The loans
Identify the financial statements that must be included in a company's published accounts in accordance with the requirements of the Companies Act 2006.
The treasurer of the Grandford Sports Club provided the following information at the end of the club's most recently completed financial year ended 31 March 2015. At 1 April 2014 the club's
Julia Harper sells goods through her agent Xera Retail in Quebec, Canada.Prepare the following ledger accounts.a. In the books of Julia Harper the consignment to Xera Retail account to record the
Anderson plc is a manufacturing business. At the end of the accounting year, 31 March 2015, the following information is available.Additional information: • Inventories at 31 March 2015 were:
Dwight and Zamran formed a joint venture, sharing profits and losses equally. They agreed to purchase a quantity of electrical goods from a wholesale business that was closing down. The following
Identify which of the following costs are direct and which are indirect manufacturing costs. Cost Direct Indirect Cost of raw materials Salary of factory supervisor Lease of factory Machine
Identify in which financial statement(s) each of the following items should be recorded. Receipts Income and Statement expenditure of financial position at year end Item and payments account
In each of the following situations identify the number of the standard which should be applied and the title of that standard. IAS Situation number IAS title Accruals, going concern, consistency and
Indicate whether each of the following statements is true or false by placing a tick (✓) in the appropriate column.True or false? True False Auditors are appointed by directors. b Auditors report
Marion and Nigel are in partnership, sharing profits and losses in the ratio 4:1, respectively. They sell the partnership assets to Opus Ltd for $210,000.The purchase consideration is made up of
Hamish Powertools Ltd sells goods on consignment to its agent in Hong Kong, Kai Inc. The following transactions occurred.Prepare the ledger accounts required to record these transactions in the books
Here is a list of possible benefits and disadvantages of computerising accounting records. The items are in random order. In each case decide whether the item should be considered an advantage (mark
A company has capital of one million ordinary shares of $1 each. The company pays a dividend of 6 per cent. The profits for the year after tax were $480 000. The sales revenue for the year was $4
Nigel Carr has provided the following information for the year ended 31 January 2015. Calculate the total direct costs for Nigel Carr for the year ended 31 January 2015. Administration costs 56
The following information is available for Sports First, a local community sports club, for the year ended 31 March 2015.The cash balance at 1 April 2014 was $450. Prepare a receipts and
Explain the term 'window dressing'. Illustrate your answer with an example.
Explain why international accounting standards are important to a shareholder in a limited company. Illustrate your answer by referring to IAS 1 Presentation of financial statements.
Explain why it is a legal requirement that shareholders appoint auditors.
Xavier and Zeb are in partnership, sharing profits and losses in the ratio 3:1, respectively. They have agreed to sell their business to Young Ltd. The purchase consideration is $400,000, comprising
Carlos Rodriguez of Venezuela sells goods on consignment to BOT Inc of New York. The following details are available concerning a recent consignment.Prepare the following ledger accounts to record
Prepare a table based on the following example in which the benefits and disadvantages of installing a computerised accounting system are summarised. The points made should be from the viewpoint of
The following information is available for two companies for the year ended 28 February 2015.a. Calculate the following investment ratios for the two companies:i. Gearing ratioii. Dividend coveriii.
Osomo Ltd is a manufacturing organisation. On 31 December 2014 the following information was extracted from the company's books.Additional information: • The company transfers goods from the
The following information is available for S. Ramjeet Lid, a manufacturer of toys, for the year ended 31 March 2015.Prepare an extract from the manufacturing account to show the prime cost for the
The following information is available for Charlie's Chess Club, a chess club run from a local village hall by a retired teacher, for the year ended 31 October 2014.The cash balance at 1 November
You are provided with the following information for a business with a year end of 31 December.RequiredPrepare a reconciliation of profit from operations to the cash from operating activities for the
The following situations have arisen affecting the financial affairs of Hexamon Ltd. The company's year-end was 28 February 2015.a. The company owns some machinery that has been under-used during the
The role of auditors and directors At a recent annual general meeting of the Yushui Company Ltd, the shareholders reappointed the directors of the company and the firm of Kashchei & Co was
Tom, Dick and Harry were in partnership, sharing profits and losses in the ratio 3:2:1, respectively. Business profits have been falling consistently over the past few years and the partners have
Recently Harry Clarke sent goods on consignment to his agent in Kenya. Harry sent 320 crates of goods at $60 per crate. Harry paid carriage and insurance totalling $4200 on these goods. At the end of
Prepare a table based on the following example in which the benefits and disadvantages of installing a computerised accounting system are summarised. The points made should be from the viewpoint of
The following information is provided for Ace Ltd at 31 March 2015.Complete the following table. Ordinary shares of $1 each $3 486 000 6% preference shares of $10 each $1 400 000 7% debenture stock

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