3 Multiple Choice

(i)The following information relates to Loop Ltd for the year ended 31 August 2015.

Sales 600,000

Purchases 460,000

Opening inventory 110,000

The company operates at a uniform mark-up of 20% on cost of sales.

What is the closing inventory?

A 70,000

B 90,000

C 130,000

D 150,000

(ii)A sole trader has a mark up of 25% on cost of sales. The following other information is relevant

Total receivables at start of year 1,725

Total receivables at end of year 1,820

Cash and bank at start of year 715

Cash and bank at end of year 810

Total payments made 13,870

The only receipts during the year consisted of cash and cheques received from customers.

To the nearest what is the gross profit for the year?

A 2,774

B 3,515

C 2,812

D 3,468

(iii)From the information below you are required to calculate certain figures in respect of Archibald's business which he started on 1 January 20X1 with 2,000. On 31 December 20X1 the position of the business was:

Itowned

Freehold lock up shop, cost 4,000

Shop fixtures and equipment cost 500

Inventory of goods bought for resale, cost 10,300

Debts owing by customers (receivables) 500

Cash in till 10

Cash in bank 150

Itowed

Mortgage on shop premises 3,000

Payables for goods supplied 7,000

Accrued mortgage interest 100

Archibald has withdrawn 500 for personal living expenses

Shop fittings are to be depreciated by 50, and certain stock which cost 300, can be sold for only 50.

No records have been maintained throughout the year.

Enter your answers in the boxes provided indicating for (c) whether the result is a profit or loss?

(a) Non-current assets less provision for depreciation

at 31 December 20X1

(b) Net current assets at 31 December 20X1

(c) Net profit/loss for 20X1

(iv)The cash book of Peter Pan shows a credit balance of 1,350. Cheques of 56 have been written to suppliers but not yet cleared with bank; uncleared lodgements amount to 128. The bank has accidentally credited Peter Pan's account with interest of 15 due to another customer. A standing order of 300 has not been accounted for in the general ledger.

What is the balance on the bank statement?

A 993 Cr

B 993 Dr

C 1,707 Cr

D 1,707 Dr