answer 5 of them please
4. Explain the following terms: (a) A petty cash system [6 marks] (b) Utmost good faith [4 marks] (c) Pool of risks [4 marks] (d) Books of original entry [6 marks] (e) Ledger accounts [5 marks] 5. (a) A business is in the process of acquiring costly equipment. It is arranging to buy a machine costing $50,000 plus 20% VAT on hire purchase (HP). The vendor will require an initial deposit of 10% of the total amount. Calculate the amount of the deposit required. [2 marks] (b) You have 20,000 shares in a company. That company has just declared a dividend of 15 pence per share. Calculate the total gross dividend that you will receive. [2 marks] (c) Explain the function of a trial balance. [6 marks] (d) Explain the term life assurance. [4 marks] (e) List five typical matters usually required by a bank in support of a business loan. [5 marks] (f) A business started a business with $60,000 of capital. During the first year of trading it made a profit before tax of f10,000. Calculate the return on capital. [2 marks] (g) List four services a bank may provide to a client. [4 marks]ANSWER FOUR QUESTIONS FROM FIVE 2. The following is the trial balance of Berisha at 29" February 2020: Edr Ecr Sales 480,000 Purchases 174,000 Accounts receivable (debtors) 36,000 Accounts payable (creditors) 25,000 Communication expenses 32,000 Insurances 23,000 Carriage inwards 1,000 Energy costs 44,000 Payroll costs 133,000 Discounts allowed 2,000 Business rates 29,000 Inventory at 1" March 2019 3. 13,000 Interest on loan 1,000 Long term loan 30,000 Drawings 30,000 Premises 300,000 Equipment 60,000 Capital at 1" March 2019 347,000 Balance at bank 1,000 Totals 882,000 882,000 Notes at 29" February 2020: The value of inventory was f15,000. Payroll costs owing amounted to $5,000. Insurance prepaid amounted to $2,000. Business rates prepaid amounted to $4,000. Ignore depreciation. (a) Prepare the income statement (trading and profit and loss account) for the year ended 29" February 2020. [13 marks] (b) Prepare the position statement (balance sheet) as at 29" February 2020. [12 marks]2. (a) There are three partners in a partnership (A, B, and C). Their agreed profit sharing ratio is A 50%; B 25%; and C 25%. In their last year of trading the total sales revenue was f220,000 and their total expenditure was f140,000. (i) Calculate the partnership profit. [1 mark] [ii) Calculate each partner's share of the profit. [6 marks] (b) A business sells the following products, on credit, to a customer: (i) 40 of product X at $5 each (ii) 80 of product Y at $8 each (i) 60 of product Z at $6 each The business allows a trade (quantity) discount of 10%. VAT (sales tax) at 20% is chargeable. Calculate the amount due from the customer (show your workings). [6 marks] (c) List six sources of finance. [6 marks] (d) Outline the purposes of a cash flow budget. [6 marks] 3. The following are the summarised final accounts of a trader: Income Statement E000 Sales 1,600 Cost of sales (700 Gross profit 900 Expenses (600) Net profit Position Statement Non-current assets 400 Inventory 160 Accounts receivable 90 Cash and bank 10 Accounts payable (180) Total capital 180 (a) Calculate the following ratios: (i) Gross profit to sales percentage (ii) Net profit to sales percentage (iii) The expenses to sales percentage (iv) The stock turnover (v) The current ratio (vi) The acid test [18 marks] (b) The equivalent ratios for the previous year were: gross profit percentage 48%; net profit percentage 14%; expenses percentage 34%; the rate of stock turnover 6.1; current ratio 2:1; acid test 1:1. Comment briefly on the financial performance of the business. [7 marks]
