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

### Passage

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

 \$ (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)

Edit

### Write in Brief

One Liner▾

Calculate Aparajita’s Quick Ratio (Marks 3)

## Question 114 (4 of 5 Based on Passage)

Edit

### 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)

Edit

### Write in Short

Calculate Aparajita’s Working Capital (Marks 4)

### Passage

The following trial balance was 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

(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

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

 \$ \$

(Marks 14)

### Explanation

Asmita & Sons

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 \$ 14,000Add: 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 \$ 11,000Add: Outstanding Salaries \$ 1,600 12,600 Insurance \$ 700Less: 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