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ZIMSEC A Level · 9197/2 · J2015

Accounting Paper 2 June 2015

Questions
51
Total marks
100
Time allowed
105 min
Syllabus code
9197/2

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Questions
51
Pass mark
31
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Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 101

[2 marks]bad and doubtful debts
How does the accounting treatment of a bad debt differ from that of a doubtful debt?
  1. AA doubtful debt is written off the customer's account
  2. BA bad debt is written off the customer's account
  3. CA bad debt leaves the customer's account untouched
  4. DA doubtful debt is charged in full to the income statement

Question 102

[3 marks]bad and doubtful debts
Chaminuka's trade receivables at 31 December 2013, after writing off a bankrupt customer's debt, are $23 000 aged 0 to 30 days, $16 500 aged 31 to 60 days, $9 000 aged 61 to 90 days, $3 800 aged 91 to 120 days and $1 500 over 120 days. Provision for doubtful debts is made at 1%, 2%, 3%, 5% and 10% of those bands in that order. Calculate the provision required at 31 December 2013.

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Question 103

[2 marks]bad and doubtful debts
An ageing schedule of trade receivables shows $4 800 in the 91 to 120 day band, on which a provision of 5% is made. Included in that band is $1 000 owed by a customer who has been declared bankrupt, and that debt is to be written off. Calculate the provision on this band.
  1. A$50
  2. B$190
  3. C$240
  4. D$1 190

Question 104

[2 marks]bad and doubtful debts
During the year ended 31 December 2013 a trader wrote off debts of $620 from Bhunu on 7 May, $500 from Sigogo on 16 July and $280 from Mushangwe on 24 October, and at the year end wrote off $1 000 owed by Chatindo, who had been declared bankrupt. Calculate the amount transferred from the bad debts account to the income statement.

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Question 105

[2 marks]bad and doubtful debts
On 17 November 2013 a trader received $750 from Simango, whose debt had been written off as bad in March 2010. How is the $750 treated?
  1. AIt is credited to Simango's account as a debt
  2. BIt is credited to bad debts recovered as income
  3. CIt is credited to the provision for doubtful debts
  4. DIt is deducted from the trade receivables total

Question 106

[2 marks]bad and doubtful debts
A provision for doubtful debts account had a balance of $970 on 1 January 2013, and the provision required at 31 December 2013 is $1 170. Calculate the amount charged to the income statement for the year.

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Question 107

[2 marks]bad and doubtful debts
A trader's bad debts for the year are $2 400 and the provision for doubtful debts is increased by $200. Calculate the total charged in the expenses section of the income statement for these two items.
  1. A$200
  2. B$2 400
  3. C$2 600
  4. D$3 570

Question 108

[2 marks]bad and doubtful debts
A trader's trade receivables at 31 December 2013 are $53 800 after writing off a bankrupt customer's debt, and the provision for doubtful debts at that date is $1 170. Calculate the net trade receivables shown in the statement of financial position.

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Question 109

[2 marks]bad and doubtful debts
How does the prudence concept apply when a provision for doubtful debts is made?
  1. AIt recognises a foreseen loss straight away
  2. BIt spreads the loss over the whole life of the debt
  3. CIt values receivables at their invoiced amount
  4. DIt records the loss only when the debt finally fails

Question 110

[2 marks]bad and doubtful debts
A customer owing $1 000 has been declared bankrupt and the debt is written off. Which entry records the write off?
  1. ADebit the customer, credit bad debts
  2. BDebit provision for doubtful debts, credit the customer
  3. CDebit bad debts, credit the customer
  4. DDebit bad debts, credit provision for doubtful debts

Question 111

[2 marks]bad and doubtful debts
In a provision for doubtful debts account, where is an increase in the provision entered?
  1. ACredit side, as balance brought down
  2. BDebit side, as income statement
  3. CCredit side, as income statement
  4. DDebit side, as balance carried down

Question 112

[2 marks]bad and doubtful debts
Chaminuka's trade receivables at 31 December 2013 total $54 800 before any adjustment. A debt of $1 000 owed by a bankrupt customer is to be written off. Calculate the trade receivables to be shown before deducting the provision for doubtful debts.

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Question 201

[2 marks]final accounts of a sole trader
Property, plant and equipment cost $318 000 and the provision for depreciation on it is $125 000. Depreciation is charged at 20% a year on the written down value. Calculate the depreciation charge for the year.

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Question 202

[3 marks]final accounts of a sole trader
Sarudzai's records for the year ended 30 September 2012 show opening inventory $40 000, purchases $410 890, purchases returns $3 112, carriage inwards $4 240, goods taken for her own use $2 500 and closing inventory $58 000. Calculate the cost of sales.

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Question 203

[1 marks]final accounts of a sole trader
A trader's revenue for the year is $693 330 and the cost of sales is $391 518. Calculate the gross profit.

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Question 204

[2 marks]final accounts of a sole trader
Stationery of $6 195 was paid during the year. At the year end $220 was owing for stationery and unused stationery in stock was valued at $450. Calculate the stationery expense charged for the year.

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Question 205

[2 marks]final accounts of a sole trader
A sole trader took goods costing $2 500 out of the business for her own use, and no entry was made. How is this recorded?
  1. AReduce revenue and increase the drawings
  2. BIncrease purchases and reduce the drawings
  3. CReduce closing inventory and increase drawings
  4. DReduce purchases and increase drawings

Question 206

[1 marks]final accounts of a sole trader
Rental income of $1 020 was received during the year and $280 was still owing at the year end. Calculate the rental income for the year.

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Question 207

[3 marks]final accounts of a sole trader
Sarudzai for the year ended 30 September 2012: gross profit $301 812, discount received $2 942, rental income $1 300, wages and salaries $137 652, other administrative expenses $33 537, stationery $5 965, discount allowed $3 220, carriage outwards $1 819, depreciation $38 600. Calculate the profit for the year.

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Question 208

[2 marks]final accounts of a sole trader
Sarudzai's balances at 30 September 2012 are inventory $58 000, stock of stationery $450, trade receivables $33 400, rent prepaid $2 000, rental income receivable $280 and bank $11 374. Calculate the total current assets.

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Question 209

[2 marks]final accounts of a sole trader
Sarudzai's capital at 1 October 2011 was $200 000. The profit for the year to 30 September 2012 was $85 261 and her drawings for the year were $31 297. Calculate the capital at 30 September 2012.

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Question 210

[2 marks]final accounts of a sole trader
A trader's drawings account shows $28 797 for the year. She also took goods costing $2 500 for her own use, for which no entry had been made. Calculate the total drawings for the year.
  1. A$2 500
  2. B$26 297
  3. C$28 797
  4. D$31 297

Question 211

[2 marks]final accounts of a sole trader
Which is a disadvantage of trading as a sole proprietor?
  1. AProfits must be shared with the partners
  2. BThe accounts must be published each year
  3. CDecisions need the agreement of others
  4. DThe owner's private assets are at risk

Question 212

[1 marks]final accounts of a sole trader
A trader's provision for depreciation was $125 000 at the start of the year and the charge for the year is $38 600. Calculate the accumulated depreciation at the year end.

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Question 213

[2 marks]final accounts of a sole trader
Other administrative expenses of $35 537 include rent of $2 000 paid in advance at the year end. How is the prepayment shown?
  1. AAs a current liability of $2 000
  2. BAs a current asset of $2 000
  3. CAs a deduction of $2 000 from the capital
  4. DAs an expense of $2 000 in the income statement

Question 301

[1 marks]dissolution of a partnership and sale to a company
Jay and Kay share profits and losses in the ratio of their fixed capital account balances, which are $15 000 and $10 000. What is their profit sharing ratio?
  1. A5 : 3
  2. B1 : 1
  3. C2 : 1
  4. D3 : 2

Question 302

[2 marks]dissolution of a partnership and sale to a company
Kay was earning 8% interest on a $5 000 loan he had made to a partnership. When the business is sold he is to receive enough 10% debentures to earn the same interest as before. Calculate the nominal value of the debentures he receives.

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Question 303

[3 marks]dissolution of a partnership and sale to a company
A purchase price of $45 000 is settled by a cash payment of $5 000, $4 000 of 10% debentures, and the balance in ordinary shares of $1 each issued at a premium of 20 cents per share. Calculate the number of ordinary shares issued.

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Question 304

[2 marks]dissolution of a partnership and sale to a company
30 000 ordinary shares of $1 each are issued at a premium of 20 cents per share. Calculate the amount credited to the share premium account.
  1. A$6 000
  2. B$7 200
  3. C$7 500
  4. D$9 000

Question 305

[3 marks]dissolution of a partnership and sale to a company
Jay and Kay's assets at book value were premises $20 000, motor vehicles $2 400, fixtures and fittings $4 000, inventory $2 500 and trade receivables $3 000, and their trade payables were $4 100. The business was sold for $45 000 and dissolution costs of $1 200 were paid. Calculate the profit on realisation.

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Question 306

[1 marks]dissolution of a partnership and sale to a company
A profit on realisation of $16 000 is shared between two partners in the ratio 3 : 2. Calculate the larger partner's share.

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Question 307

[3 marks]dissolution of a partnership and sale to a company
Indigenous Ltd takes over premises valued at $26 000, motor vehicles $1 800, fixtures and fittings $3 500, inventory $1 900 and trade receivables $2 700, and assumes trade payables of $4 000. The purchase price is $45 000. Calculate the goodwill arising on the purchase.

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Question 308

[2 marks]dissolution of a partnership and sale to a company
A partner's capital account on the dissolution of a firm shows an opening balance of $15 000, a current account balance of $500 transferred in and a share of the realisation profit of $9 600. He takes shares in the purchasing company worth $18 000. Calculate the amount he receives from the bank.
  1. A$6 900
  2. B$7 100
  3. C$15 000
  4. D$25 100

Question 309

[2 marks]dissolution of a partnership and sale to a company
A purchase price is settled partly by 30 000 ordinary shares of $1 each issued at a premium of 20 cents, and the shares are divided equally between two partners. Calculate the value of the shares taken by each partner.

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Question 310

[2 marks]dissolution of a partnership and sale to a company
Dissolution costs of $1 200 are paid when a partnership is wound up. How are they recorded?
  1. ADebit realisation, credit bank
  2. BDebit bank, credit the realisation
  3. CDebit the capital accounts, credit bank
  4. DDebit the purchasing company, credit bank

Question 311

[2 marks]dissolution of a partnership and sale to a company
On the sale of a partnership, an 8% loan made to the firm by one of the partners is not among the liabilities taken over by the purchasing company. How is the loan dealt with?
  1. AIt is shared between the partners as a loss
  2. BIt is repaid to the partner through the bank
  3. CIt is written off as a realisation loss
  4. DIt is taken over by the purchasing company

Question 312

[2 marks]dissolution of a partnership and sale to a company
In the books of a company that has bought a business from a partnership, which account is credited with the $45 000 purchase price?
  1. AThe realisation account
  2. BThe goodwill account
  3. CThe business purchase account
  4. DThe ordinary share capital

Question 401

[1 marks]absorption and marginal costing
What is contribution?
  1. AProfit after all costs have been deducted
  2. BSales less the total cost of production
  3. CSales less the fixed cost of the period
  4. DSales less the variable cost of sales

Question 402

[1 marks]absorption and marginal costing
What is the marginal cost of a product?
  1. AThe cost of making one more unit
  2. BThe average cost of a unit made
  3. CThe lowest price a unit can be sold at
  4. DThe fixed cost carried by each unit

Question 403

[2 marks]absorption and marginal costing
Fixed costs are expected to be $49 000 at a normal level of production of 7 000 units. Calculate the fixed overhead absorption rate per unit.

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Question 404

[2 marks]absorption and marginal costing
A product has direct materials of $46, direct labour of $18 and direct expenses of $8 a unit, and fixed overhead is absorbed at $7 a unit. Calculate the absorption cost of one unit.

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Question 405

[1 marks]absorption and marginal costing
In 2009 a company produced 6 800 units and sold 6 400 units, and it held no inventory at 1 January 2009. Calculate the closing inventory in units at 31 December 2009.

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Question 406

[1 marks]absorption and marginal costing
A company values its inventory at an absorption cost of $79 a unit and holds 400 units at the year end. Calculate the value of the closing inventory.

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Question 407

[2 marks]absorption and marginal costing
A company absorbs fixed overhead at $7 a unit on a normal level of production of 7 000 units. Actual production in 2009 was 6 800 units. What is the effect on the accounts?
  1. A$2 800 is under absorbed
  2. BNo adjustment is needed
  3. C$1 400 is under absorbed
  4. D$1 400 is over absorbed

Question 408

[3 marks]absorption and marginal costing
Local Products Ltd in 2009 sold 6 400 units at $120 each. It produced 6 800 units at an absorption cost of $79 a unit, held no opening inventory and had 400 units in closing inventory. Fixed overhead of $1 400 was under absorbed. Calculate the profit for 2009 under absorption costing.

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Question 409

[1 marks]absorption and marginal costing
A product sells for $120 a unit and has direct materials of $46, direct labour of $18 and direct expenses of $8 a unit. Calculate the contribution per unit.

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Question 410

[2 marks]absorption and marginal costing
A company sold 6 400 units in 2009 at a contribution of $48 a unit, and its fixed costs for the year were $49 000. Calculate the profit for 2009 under marginal costing.

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Question 411

[3 marks]absorption and marginal costing
Local Products Ltd in 2010 sold 7 000 units at $120 each. It produced 7 200 units at an absorption cost of $79 a unit, opening inventory was 400 units and closing inventory 600 units, both valued at $79 a unit. Fixed overhead of $1 400 was over absorbed. Calculate the profit for 2010 under absorption costing.

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Question 412

[2 marks]absorption and marginal costing
A company produced 7 200 units in 2010 and sold 7 000, having held 400 units in inventory at 1 January 2010. Calculate the closing inventory in units at 31 December 2010.

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Question 413

[2 marks]absorption and marginal costing
In 2009 a company's marginal costing profit was $258 200. It held no opening inventory and 400 units of closing inventory, each carrying $7 of fixed overhead. Calculate the profit under absorption costing.
  1. A$255 400
  2. B$258 200
  3. C$261 000
  4. D$303 000

Question 414

[2 marks]absorption and marginal costing
Why does absorption costing show a higher profit than marginal costing in a year when inventory rises?
  1. AFixed cost is held in the closing inventory
  2. BVariable cost falls as output rises
  3. CFixed cost is written off when incurred
  4. DSales are valued at a higher price

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