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Y12 Mock Exams March 2024 - Accounting p2
Y12 Mock Exams March 2024 - Accounting p2
INSTRUCTIONS
● Answer all questions.
● Use a black or dark blue pen.
● Write your answer to each question in the space provided.
● Do not use an erasable pen or correction fluid.
● You may use an HB pencil for any rough working.
● You may use a calculator.
● You should present all accounting statements in good style.
● International accounting terms and formats should be used as appropriate.
● You should show your workings.
INFORMATION
● The total mark for this paper is 90.
● The number of marks for each question or part question is shown in brackets [ ].
1
1. The following information has been extracted from the accounting records of T Limited
at 30 June 2021.
REQUIRED
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(ii) revenue.
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2
Additional information
The following balances were extracted from the books of account at 30 June 2021.
$
8% debentures (2026–2027) 96 000
Administrative expenses 55 900
Directors’ remuneration 62 400
Distribution costs 59 200
Finance costs 6 350
Wages and salaries 88 300
Trade receivables 110 360
Provision for doubtful debts at 1 July 2020 1 235
1 The 8% debentures (2026–2027) were taken out on 1 November 2020. Interest was
paidevery three months in arrears, starting on 1 February 2021.
3 At 30 June 2021, a bonus was due to be paid to the sales director of $12 000.
6 A credit customer owing $2360 from 12 April 2021 has been declared bankrupt and the
debtis to be written off to administrative expenses.
3
REQUIRED
(b) Calculate the balance of the provision for doubtful debts at 30 June 2021
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(c) Prepare the income statement for the year ended 30 June 2021. Use the space on
the next page for your workings.
T Limited
Income Statement for the year ended 30 June 2021
$
Revenue
Cost of sales
Gross profit
Administrative expenses
Distribution costs
Finance costs
4
Workings
Administrative expenses
Distribution costs
Finance costs
Other workings
[11]
Additional information
The following transactions had also taken place during the year ended 30 June 2021.
Date Transaction
1 July 2020 Freehold property was revalued downwards by $10 000.
1 July 2020 Made a rights issue of one ordinary share of $2 each for every two
shares held. This was offered at a premium of $0.75. The issue was
fully subscribed.
1 March 2021 Made a bonus issue of one ordinary share of $2 each for every ten
shares held. Reserves were left in the most flexible form.
31 March 2021 Paid a dividend of $0.05 per share on all shares in issue at that
date.
5
REQUIRED
(d) Prepare the statement of changes in equity for the year ended 30 June 2021.
T Limited
Statement of Changes in Equity for the year ended 30 June 2021
At 30 June 2021
[6]
Additional information
The directors make use of accounting ratios to interpret the information contained within
thefinancial statements.
REQUIRED
(e) (i) State the formula for calculating the non-current asset turnover.
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(ii) State what information the directors would obtain from calculating the non-current asset
turnover.
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(f) State three limitations of ratio analysis when comparing the performance of businesses in the
same industry.
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[3]
[Total: 30]
(a) Explain why a business should comply with the following concepts when
accounting fornon-current assets.
Prudence........................................................................................................................................
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Accruals(matching)...................................................................................................................................
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Additional information
$
Plant and machinery at cost 174 300
Provision for depreciation 48 700
7
On 1 July 2017 the company disposed of a machine which had a net book value of $20 000.
Themachine had been purchased on 1 July 2015.
On 1 October 2017 a new machine was purchased for $68 600 paid by cheque.
The company depreciates plant and machinery at 20% using the reducing balance
methodcalculated on a month-by-month basis. No depreciation is charged in the year of
disposal.
REQUIRED
(b) Prepare the provision for depreciation on plant and machinery account for the year
ended30 June 2018. Dates are required.
Provision for depreciation on plant and machinery
$ $
Workings:
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8
Additional information
Rather than paying immediately, the company had the option to pay in full for the new
machine15 months from the date of purchase.
REQUIRED
(c) Explain the impact on the financial statements for the year ended 30 June 2018 of
paying forthe new machine 15 months from the date of purchase.
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[Total: 15]
3. Martina has prepared the following sales ledger control account for the month of August 2022.
All sales are on credit.
Sales ledger control account for the month of August 2022
$ $
Balance b/d 14 280 Sales returns journal 210
Sales journal 9 540 Bank 11 860
Discounts received 280
Balance c/d 11 470
23 820 23 820
Balance b/d 11 470
Martina produced a list of all customer account balances at 31 August 2022 totalling $10 020.
She discovered that the following errors had been made in the records.
1 Discounts allowed of $1190 had been entered in customers’ accounts but had not been
entered in the control account.
2 A credit transfer from a customer of $420 had been correctly entered in the cash book but
had been credited to the customer’s account as $240.
3 A credit balance of $60 on a customer’s account had been recorded on the list of balances as
a debit balance.
4 A contra to the purchases ledger of $860 had been entered in the customer’s sales ledger
account but had not been entered in the control account.
5 A cheque received from a customer of $380 had been returned unpaid by the bank. No entries
had been made in Martina’s books of account in respect of the unpaid cheque.
6 Martina had sent a cheque for $20 to a customer who had overpaid his account. The payment
had been correctly processed in both the cash book and the customer’s account but had
been posted to the purchases ledger control account in error.
9
REQUIRED
a. Prepare an adjusted sales ledger control account.
$ $
[6]
b. Prepare an adjusted list of sales ledger balances to agree with the adjusted sales
ledger control account balance in part (a).
$
[4]
10
c. Explain how the preparation of a sales ledger control account assists in the prevention
of fraud.
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d. State three types of error that will not be identified by preparing a sales ledger
controlaccount.
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[3]
[Total: 15]
At one site the company makes a single product. The following details are available.
REQUIRED
(a) Calculate the break-even point per month in units.
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(b) Define the term ‘margin of safety’.
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Additional information
2 Introduce a sales commission of $2 per unit on every unit sold in excess of 5000 units
per month.
Buying direct materials in bulk will increase storage costs by $4000 per month.
Demand will be 98% of factory capacity.
REQUIRED
(c) Prepare a marginal costing statement to show the monthly profit based on
these changes.
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12
(d) Explain two advantages of using a system of marginal costing.
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Additional information
At its other site the company makes three products: Product X, Product Y and Product Z.
The following details are available.
Each month the company plans to work to full capacity producing the maximum output of each
product.
In August 2021 only two-thirds of the month’s machine hours will be available.
REQUIRED
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13
Additional information
The company has a regular order to supply one major customer with 50% of the output of
each product per month.
Two options are being considered to deal with the shortage of machine hours.
Option 1: The finance director has recommended the company makes the maximum profit
possible in August 2021 and if necessary not complete all of the major customer’s
order.
Option 2: The sales director has recommended that the company should ensure it fulfils the
major customer’s order.
REQUIRED
(f) Calculate the profit or loss for August 2021 based on:
(i) Option 1
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(ii) Option 2
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14
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(g) Advise which option the company should choose. Justify your advice by discussing
both options. (Consider both financial and non-financial factors.)
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[Total: 30]
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