IGCSE Accounting Paper-2: Specimen Questions with Answers 113 - 116 of 189

Passage

The assets and liabilities of Aparajita’s business included the following:

The Assets and Liabilities of Aparajita’s Business Included
$

(I) Cash

1,500

(II) Unearned Income

2,000

(III) Trade Receivables

10,000

(IV) Inventory

15,000

(V) Prepaid Expenses

4,000

(VI) Trade Payables

6,000

(VII) Bank Overdraft

5,500

Question 113 (3 of 5 Based on Passage)

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Write in Brief

One Liner▾

Calculate Aparajita’s Quick Ratio (Marks 3)

Explanation

Question 114 (4 of 5 Based on Passage)

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Write in Brief

One Liner▾

If Aparajita wants to still improve her working capital ratio, which one of the above six transactions should she make? (Marks 1)

Explanation

Transaction (V)

Working Capital Ratio is improved when it is increased. Payment of a part or whole of trade payables will increase and hence improve the working capital ratio.

Question 115 (5 of 5 Based on Passage)

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Write in Short

Short Answer▾

Calculate Aparajita’s Working Capital (Marks 4)

Explanation

Passage

The following trial balance was extracted from the books of Asmita & Sons as at 31 December 2,019-

Extracted from the Books of Asmita & Sons as at 31 December 2,019-
Debit Balances

$

Credit Balance

$

Capital

56,000

Drawings

6,000

Premises

35,000

Opening Stock

10,000

Purchases

55,000

Plant & Machinery

21,000

Insurance

700

Cash

2,800

Direct Wages

14,000

Salaries

11,000

Discount Received

1,000

Sales

120,000

Trade Debtors

36,000

Trade Creditors

12,000

Carriage Inward

1,500

Bank Overdraft

7,200

General Expenses

3,200

196,200

196,200

Additional Information:

(I) Closing Stock is valued at $ 15,000 (cost) , (market value $ 20,000)

(II) Wages amounting to $ 4,000 and salaries amounting to $ 1,600 are outstanding

(III) Prepaid Insurance amounted to $ 300

(IV) Plant & machinery is to be depreciated@10% pa

Question 116 (1 of 4 Based on Passage)

Write in Short

Short Answer▾

Prepare Income Statement of Asmita & Sons for the year ending 31 December 2,019.

Asmita & Sons

Income Statement for the year ended 31 December 2,019

Income Statement for the Year Ended 31 December 2,019
$

$

(Marks 14)

Explanation

Asmita & Sons

Income Statement for the year ended 31 December 2,019

Income Statement for the Year Ended 31 December 2,019
$

$

Sales

120,000

Less: Cost of Goods Sold

Opening Stock

10,000

Purchases

55,000

Direct Wages $ 14,000

Add: Outstanding Wages $ 4,000

18,000

Carriage Inward

1,500

84,500

Less: Closing Stock

15,000

(69,500)

Gross Profit

50,500

Add: Indirect Incomes-

Discount Received

1,000

51,500

Less: Indirect Expenses

Salaries $ 11,000

Add: Outstanding Salaries $ 1,600

12,600

Insurance $ 700

Less: Prepaid Insurance $ 300

400

General Expenses

3,200

Depreciation on Plant & Machinery (I)

2,100

(18,300)

Net Profit

33,200

Workings

(I) Depreciation on Plant & Machinery

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