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)
Question 114 (4 of 5 Based on Passage)
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)
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 |
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
| $ | $ |
(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 $ 14,000 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