IGCSE Accounting Paper-1: Specimen Questions with Answers 185 - 189 of 338

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Passage

Aiona՚s trial balance at 31st March 2015 included the following items:

Perticulars Item Name
Particulars$
Sales150000
Sales returns20000
Opening stock30000
Purchases70000
Purchases returns10000
Closing stock5000

Question 185 (2 of 2 Based on Passage)

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Calculate Aiona՚s gross profit ratio. Show your calculation and give your answer to decimal places.

Explanation

Question 186

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Ramesh is a retailer. Complete the following table by using a (√) to specify how each item would be classified as capital expenditure or revenue expenditure:

The List of Capital and Revenue Expenditure
ParticularCapital expenditureRevenue expenditure
Delivery costs
Repair costs
Installation costs
Renewal expenses
Replacement costs

Explanation

Shows this Table in List of Capital and Revenue Expenditure
ParticularCapital expenditureRevenue expenditure
Delivery costs√
Repair costs√
Installation costs√
Renewal expenses√
Replacement costs√

Passage

Terry and Candy are partners of a firm sharing profit and loss in the ratio of 7: 5.

The Goodwill is to be valued at 2 years purchases of four years average profit which were $ 40000, $ 32000, $ 15000 and $ 13000 respectively.

Question 187 (1 of 2 Based on Passage)

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Find the four years average profit:

Explanation

$ 25000

Solution: The four years average profit is as follows:

Profit for four years:

Find the Four Years Average Profit
I year40000
II Year32000
III Year15000
IV Year13000
Total100000

Question 188 (2 of 2 Based on Passage)

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Calculate the goodwill for the above transaction:

Explanation

$ 50000

Solution:

Question 189

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Write any two characteristics of a company.

Explanation

The following are characteristics of a company:

  1. Common Seal
  2. Freely transferable shares
  3. Limited liability of members
  4. Perpetual Succession
  5. Separate legal entity

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