Danho
ZIMSEC A Level · 6001/3 · J2023

Accounting Paper 3 June 2023

Questions
58
Total marks
100
Syllabus code
6001/3

Sit this paper online

Questions
58
Pass mark
35
Sit this paper

Answer every question in the printed order, get marked at the end, then see the answers.

The questions

Question 101

[2 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd's machinery account at cost, year ended 30 June 2017, opens with a balance of $200 000. Machines are purchased during the year: Machinery 5 cost $30 000 (1 October 2016), Machinery 6 cost $20 000 (1 April 2017), Machinery 7 cost $45 000 (1 May 2017, bought from Wellingtons Company on credit). What is the total cost of machinery purchased during the year?

Answer this when you sit the paper.

Question 102

[2 marks]Non-current assets: machinery account, depreciation, disposal
During the year ended 30 June 2017, Wise Ltd disposed of three machines: Machinery 1 (cost $40 000), Machinery 2 (cost $15 000) and Machinery 3 (cost $20 000). What is the total cost of machinery transferred out of the machinery account on disposal?

Answer this when you sit the paper.

Question 103

[1 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd's machinery account at cost opens the year ended 30 June 2017 with $200 000, has purchases of $95 000 during the year, and machines costing $75 000 are disposed of. What is the closing balance carried down on the machinery account at 30 June 2017?

Answer this when you sit the paper.

Question 104

[3 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd charges depreciation on machinery at 20% per annum on cost, for each month of ownership. During the year ended 30 June 2017: continuing machines with a combined cost of $125 000 were held for the full 12 months; Machinery 5 (cost $30 000) was owned for 9 months; Machinery 6 (cost $20 000) was owned for 3 months; Machinery 7 (cost $45 000) was owned for 2 months; Machinery 2 (cost $15 000) was owned for 3 months before its sale; Machinery 1 (cost $40 000) was owned for 6 months before its sale; Machinery 3 (cost $20 000) was owned for 9 months before its sale. What is the total depreciation charge for the year ended 30 June 2017?

Answer this when you sit the paper.

Question 105

[2 marks]Non-current assets: machinery account, depreciation, disposal
Machinery 1 was purchased on 1 October 2012 for $40 000 and sold on 31 December 2016. Depreciation is charged at 20% per annum on cost for each month of ownership. What is the accumulated depreciation on Machinery 1 at the date it was sold?

Answer this when you sit the paper.

Question 106

[2 marks]Non-current assets: machinery account, depreciation, disposal
Machinery 2 was purchased on 1 January 2014 for $15 000 and sold on 30 September 2016. Depreciation is charged at 20% per annum on cost for each month of ownership. What is the accumulated depreciation on Machinery 2 at the date it was sold?

Answer this when you sit the paper.

Question 107

[2 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd's provision for depreciation account for machinery opens the year ended 30 June 2017 with a balance of $50 000, has a depreciation charge for the year of $39 750, and accumulated depreciation of $53 250 is removed on the disposal of Machinery 1, 2 and 3. What is the closing balance carried down on the provision for depreciation account at 30 June 2017?

Answer this when you sit the paper.

Question 108

[2 marks]Non-current assets: machinery account, depreciation, disposal
Machinery 1 (cost $40 000) had accumulated depreciation of $34 000 at the date of its sale, and was sold for proceeds of $2 500. What is the loss on disposal of Machinery 1?

Answer this when you sit the paper.

Question 109

[2 marks]Non-current assets: machinery account, depreciation, disposal
Machinery 3 (cost $20 000) had accumulated depreciation of $11 000 at the date of its sale, and was sold for proceeds of $2 000. What is the loss on disposal of Machinery 3?

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Question 110

[1 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd's three disposed machines (Machinery 1, 2 and 3) produced individual losses on disposal of $3 500, $1 750 and $7 000 respectively. What is the total loss on disposal transferred to the income statement?

Answer this when you sit the paper.

Question 111

[2 marks]Non-current assets: machinery account, depreciation, disposal
Which of the following is a genuine reason why a business charges depreciation on its non-current assets?
  1. ATo increase the value at which the asset is shown in the statement of financial position.
  2. BTo reduce the tax the business pays, which is the only reason a depreciation charge is made.
  3. CTo match (spread) the cost of using an asset against the revenue it helps generate over its useful life.
  4. DTo build up a cash fund set aside for replacing the asset at the end of its useful life.

Question 112

[2 marks]Non-current assets: machinery account, depreciation, disposal
Under which circumstance is the straight line method of depreciation most appropriate for a non-current asset?
  1. AWhen the business wants to charge the heaviest depreciation in the asset's early years, while it is still new and giving the business the most benefit it will ever give.
  2. BWhen the asset loses most of its value in the first year or two of ownership and very little in each of the later years, so that the yearly charge ought to fall away sharply as the asset gets older.
  3. CWhen the asset is expected to give roughly equal benefit or use to the business in every year of its life, and its useful life and residual value can be estimated fairly accurately.
  4. DWhen the asset's output varies unpredictably from one year to the next, so the charge should follow the hours worked or the units the asset has actually produced.

Question 113

[2 marks]Non-current assets: machinery account, depreciation, disposal
Wise Ltd is considering changing its depreciation method. Which statement correctly explains whether this is possible?
  1. AIt is possible only if the change increases the profit reported for the year in which it is made, since a change that lowered the profit would breach the prudence concept and could not be justified to the company's shareholders.
  2. BIt is never possible: once a depreciation method has been chosen for an asset, the consistency concept requires that the same method be applied for the whole of that asset's remaining life, whatever happens to the way in which the asset is actually used by the business.
  3. CIt is possible at any time and purely at the directors' discretion, because the choice of depreciation method is a matter of internal policy, so neither the change itself nor its effect on the profit for the year need be disclosed.
  4. DIt is possible only if there is a genuine business reason (such as a change in the pattern of expected economic benefits from the asset), applied from the date of change onward, and disclosed together with its effect in the financial statements.

Question 201

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's premises had a net book value of $950 000 at 31 December 2016 (cost $1 100 000, accumulated depreciation $150 000). The Directors revalued the premises to $1 500 000 on 31 December 2017, and no depreciation is charged on premises. What is the net book value of premises in the Statement of Financial Position at 31 December 2017?

Answer this when you sit the paper.

Question 202

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's premises had a net book value of $950 000 at 31 December 2016, and were revalued to $1 500 000 on 31 December 2017. What is the revaluation surplus arising on the premises?

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Question 203

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's plant and machinery cost $800 000 at 31 December 2016. During 2017 it purchased plant and machinery costing $180 000, and disposed of plant and machinery that had originally cost $55 000. What is the closing cost of plant and machinery at 31 December 2017?

Answer this when you sit the paper.

Question 204

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's provision for depreciation on plant and machinery was $90 000 at 31 December 2016. The depreciation charge for 2017 was $130 000, and the plant and machinery sold during the year (original cost $55 000) was sold for $30 000 proceeds with a profit on sale of $5 000. What is the closing provision for depreciation on plant and machinery at 31 December 2017?

Answer this when you sit the paper.

Question 205

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's plant and machinery has a closing cost of $925 000 and a closing provision for depreciation of $190 000 at 31 December 2017. What is the net book value of plant and machinery at 31 December 2017?

Answer this when you sit the paper.

Question 206

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's office equipment has a closing cost of $600 000 (opening cost $550 000 plus purchases of $50 000 during the year, no disposals) and a closing provision for depreciation of $125 000 (opening $45 000 plus a $80 000 charge for the year). What is the net book value of office equipment at 31 December 2017?

Answer this when you sit the paper.

Question 207

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
At 31 December 2017, Ace Ltd's non-current assets have net book values of: premises $1 500 000, plant and machinery $735 000, office equipment $475 000. What is the total net book value of non-current assets?

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Question 208

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's tax payable was $150 000 at 31 December 2016. The Income Statement charges tax of $200 000 for the year, and the Statement of Cash Flows shows tax paid of $60 000 during the year. What is the tax payable at 31 December 2017?

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Question 209

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
At 31 December 2017, Ace Ltd's current assets total $1 476 000 (inventory $500 000, trade receivables $210 000, cash and cash equivalents $766 000) and current liabilities total $451 000 (trade payables $161 000, tax $290 000). What is the net current assets figure?

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Question 210

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's 10% Debentures stood at $250 000 at 31 December 2016, and $45 000 was repaid during 2017 (per the Statement of Cash Flows). What is the debentures figure at 31 December 2017?

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Question 211

[3 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Ace Ltd's Statement of Financial Position at 31 December 2017 shows total assets less current liabilities of $3 735 000 and non-current liabilities (10% Debentures) of $205 000. What is the net assets figure, which must equal total equity?

Answer this when you sit the paper.

Question 212

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Which of the following is a genuine difference between a Statement of Cash Flows and an Income Statement?
  1. AA Statement of Cash Flows reports actual cash received and paid during the period, while an Income Statement reports income and expenses on an accruals basis, matched to the period they relate to.
  2. BA Statement of Cash Flows always ends on a higher figure than an Income Statement for the same period, because depreciation and the other non-cash charges are added back to the profit.
  3. CA Statement of Cash Flows is prepared only by sole traders and partnerships, while an Income Statement is prepared only by limited companies, which report under the Companies Act.
  4. DA Statement of Cash Flows and an Income Statement are built from exactly the same figures, and differ only in the order in which those figures are set out on the face of it.

Question 213

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Which of the following is a genuine difference between a Statement of Cash Flows and an Income Statement?
  1. AA Statement of Cash Flows must always end in a net outflow of cash for the period, while an Income Statement must always end in a profit for that same period.
  2. BA Statement of Cash Flows records revenue at the point at which it is earned, while an Income Statement records revenue only when the cash from the customer has actually been received.
  3. CA Statement of Cash Flows excludes non-cash items such as depreciation and profit or loss on disposal, while an Income Statement includes them in arriving at profit.
  4. DA Statement of Cash Flows may only be prepared once a year, while an Income Statement may be drawn up monthly, quarterly or at whatever interval management asks for it.

Question 214

[2 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
Which of the following is a genuine difference between a Statement of Cash Flows and an Income Statement?
  1. AA Statement of Cash Flows lists the business's non-current assets, while an Income Statement lists its current assets, so that between them the two statements set out everything the business owns.
  2. BA Statement of Cash Flows and an Income Statement report on entirely unrelated periods: the cash flow statement covers the year that has just ended, while the income statement covers the year that is about to begin.
  3. CA Statement of Cash Flows may only be prepared using the direct method, while an Income Statement may only be prepared using the indirect method, and the two methods may never be mixed in one set of accounts.
  4. DA Statement of Cash Flows classifies cash movements under operating, investing and financing activities, while an Income Statement classifies items as revenue and expenses to arrive at a single profit figure.

Question 215

[1 marks]Statement of financial position from a statement of cash flows; cash flow statement theory
State one reason why a Statement of Cash Flows may be helpful to users of accounting information (in terms of what it lets them assess about the business).

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Question 301

[1 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's fixtures and fittings cost $800 000 at 1 January 2015. Fixtures and fittings that had cost $300 000 were sold during the year, with no other purchases. What is the closing cost of fixtures and fittings at 31 December 2015?

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Question 302

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd depreciates fixtures and fittings at 10% per annum on cost, charged for each month of ownership. The continuing fixtures and fittings (cost $500 000) were held for the full 12 months of 2015. The fixtures and fittings that were sold (cost $300 000) were owned for 8 months before their sale on 31 August 2015. What is the total depreciation charge for the year on fixtures and fittings?

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Question 303

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's provision for depreciation on fixtures and fittings was $190 000 at 1 January 2015. The depreciation charge for the year was $70 000, and $40 000 of accumulated depreciation was eliminated on the disposal of fixtures and fittings during the year. What is the closing provision for depreciation on fixtures and fittings at 31 December 2015?

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Question 304

[1 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's fixtures and fittings have a closing cost of $500 000 and a closing provision for depreciation of $220 000 at 31 December 2015. What is the net book value of fixtures and fittings at 31 December 2015?

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Question 305

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Fixtures and fittings that had cost $300 000 and had accumulated depreciation of $40 000 were sold for $230 000. What is the loss on disposal?

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Question 306

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's motor vehicles cost $500 000 at 1 January 2015, with accumulated depreciation of $50 000 (opening net book value $450 000). A further motor vehicle costing $150 000 was purchased on 1 July 2015 (owned for 6 months during the year). Depreciation is charged at 20% per annum reducing balance, on opening net book value for continuing vehicles and on cost for the months owned for a vehicle bought during the year. What is the total depreciation charge for the year on motor vehicles?

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Question 307

[1 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's provision for depreciation on motor vehicles was $50 000 at 1 January 2015, and the depreciation charge for the year was $105 000, with no disposals of motor vehicles. What is the closing provision for depreciation on motor vehicles at 31 December 2015?

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Question 308

[1 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's motor vehicles have a closing cost of $650 000 (opening $500 000 plus a $150 000 purchase) and a closing provision for depreciation of $155 000 at 31 December 2015. What is the net book value of motor vehicles at 31 December 2015?

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Question 309

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's buildings cost $600 000 at 1 January 2015, with accumulated depreciation of $260 000. Depreciation of $15 000 was charged for January to June 2015 (6 months at 5% per annum on cost), giving accumulated depreciation of $275 000 just before the buildings were revalued to $720 000 on 30 June 2015. What is the revaluation surplus arising on the buildings?

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Question 310

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's buildings were revalued to $720 000 on 30 June 2015, with accumulated depreciation eliminated (reset to nil) on revaluation. Depreciation of $15 000 had already been charged for January to June 2015 (on the pre-revaluation cost), and a further 6 months of depreciation is charged from 1 July to 31 December 2015 at 5% per annum on the revalued amount. What is the total depreciation charge for the year on buildings?

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Question 311

[1 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Misheck Ltd's buildings stand at the revalued amount of $720 000 at 31 December 2015, with accumulated depreciation of $18 000 (charged from the 1 July 2015 revaluation date to the year end, since accumulated depreciation was reset to nil on revaluation). What is the net book value of buildings at 31 December 2015?

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Question 312

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Which of the following is an item that should be included in a company's directors' report?
  1. AThe private home address and bank details of every shareholder in the company.
  2. BA full list of the personal bank account statements of each of the company's directors.
  3. CA word for word transcript of every board meeting held by the company during the year.
  4. DA review of the company's business during the year and the state of its affairs.

Question 313

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Which of the following is an item that should be included in a company's directors' report?
  1. AThe trade secrets and confidential manufacturing processes used by the company.
  2. BThe amount, if any, that the directors recommend to be paid as a dividend for the year.
  3. CThe individual salary negotiations between the company and each of its ordinary employees.
  4. DA prediction of the exact share price the company will reach in the following year.

Question 314

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Which of the following is an item covered by the external auditors' report on a company's financial statements?
  1. AWhether the company's share price is likely to rise or to fall over the coming financial year.
  2. BWhether the financial statements give a true and fair view of the company's state of affairs and results for the year.
  3. CWhether the company's products are of good quality and likely to sell well in the year ahead.
  4. DWhether the company's directors are popular among the workforce and well regarded by staff.

Question 315

[2 marks]Schedule of non-current assets (disposal, revaluation, reducing balance); directors' and auditors' reports
Which of the following is an item covered by the external auditors' report on a company's financial statements?
  1. AWhether proper accounting records have been kept by the company, and whether the financial statements have been properly prepared in accordance with the Companies Act.
  2. BWhether the company's employees are satisfied with their pay and working conditions, and whether staff turnover during the year was higher than it ought to have been in a well run company.
  3. CWhether the company should expand into new international markets, and which of those markets it would be the most profitable for the company to enter first.
  4. DWhether the company's marketing strategy is likely to succeed in the coming year, and whether the money spent on advertising during the year was well used.

Question 401

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Maroon Ltd's plant and machinery at cost totals $60 000 (Machining) + $40 000 (Finishing) + $10 000 (Maintenance) + $10 000 (Canteen) = $120 000. Depreciation on plant and machinery is charged at 20% per annum on cost. What is the total budgeted depreciation for the coming year?

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Question 402

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Maroon Ltd apportions its $10 000 budgeted supervision salaries by number of employees: Machining 30, Finishing 40, Maintenance 15, Canteen 15 (total 100). What amount of supervision salaries is apportioned to the Machining department?

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Question 403

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Maroon Ltd apportions its $28 000 budgeted rent and rates by floor area: Machining 45 m2, Finishing 80 m2, Maintenance 10 m2, Canteen 5 m2 (total 140 m2). What amount of rent and rates is apportioned to the Finishing department?

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Question 404

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Before reapportioning the service departments, Maroon Ltd's Machining department has been allocated or apportioned: indirect materials $8 000, indirect labour $2 200, supervision salaries $3 000, rent and rates $9 000, consumable stores $3 000, electricity $4 800, and depreciation $12 000. What is the Machining department's total overhead before reapportionment of the service departments?

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Question 405

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Before reapportioning the service departments, Maroon Ltd's Finishing department has been allocated or apportioned: indirect materials $6 000, indirect labour $900, supervision salaries $4 000, rent and rates $16 000, consumable stores $4 000, electricity $6 400, and depreciation $8 000. What is the Finishing department's total overhead before reapportionment of the service departments?

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Question 406

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Maroon Ltd's Machining department has 3 000 machine hours but only 400 direct labour hours budgeted for the year. Which basis is most appropriate for its overhead absorption rate?
  1. AA rate based on the number of employees in the department, since it is people at work who cause overheads to be incurred.
  2. BA machine hour rate, since the department's work is machine-intensive (far more machine hours than labour hours).
  3. CA rate based on the floor area the department occupies, since that is how factory rent and rates are shared out.
  4. DA direct labour hour rate, since labour hours are always the correct basis regardless of how a department operates.

Question 407

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
After apportioning and reapportioning all overheads, Maroon Ltd's Machining department has a total overhead of $52 858.24 for the year, and its budgeted machine hours are 3 000. What is the overhead absorption rate for Machining, to 2 decimal places?

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Question 408

[3 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Maroon Ltd's Finishing department has 1 000 direct labour hours but only 150 machine hours budgeted for the year, so a direct labour hour rate is the appropriate absorption basis (the department's work is labour-intensive: far more labour hours than machine hours). After apportioning and reapportioning all overheads, Finishing has a total overhead of $54 491.76 for the year. What is the overhead absorption rate for Finishing, to 2 decimal places?

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Question 409

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Job ABC used direct materials of $1 300 in Machining and $700 in Finishing, and direct labour of 20 hours at $8 per hour in Machining and 25 hours at $6 per hour in Finishing. What is the prime cost of job ABC?

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Question 410

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Job ABC used 40 machine hours in the Machining department, which has an overhead absorption rate of $17.62 per machine hour. What is the overhead absorbed by the Machining department for job ABC, to 2 decimal places?

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Question 411

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Job ABC used 25 direct labour hours in the Finishing department, which has an overhead absorption rate of $54.49 per direct labour hour. What is the overhead absorbed by the Finishing department for job ABC, to 2 decimal places?

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Question 412

[2 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Job ABC has a prime cost of $2 310 and absorbed overheads totalling $2 067.07, giving a total cost of $4 377.07. Maroon Ltd prices jobs to earn a profit margin of 20% of the selling price (so cost represents 80% of the selling price). What is the selling price of job ABC, to 2 decimal places?

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Question 413

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Which of the following is a genuine cause of under absorption of overheads?
  1. AActual overhead expenditure being higher than the amount estimated when the absorption rate was set.
  2. BActual overhead expenditure turning out to be exactly equal to the amount of overhead budgeted.
  3. CThe business deciding not to charge any of its overheads to production during the whole year.
  4. DThe absorption rate being set on some basis other than machine hours or direct labour hours.

Question 414

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
Which of the following is a genuine cause of under absorption of overheads?
  1. AThe actual level of activity (such as machine hours or labour hours actually worked) being lower than the budgeted level used to calculate the absorption rate.
  2. BThe business charging more overhead to production during the year than it actually incurred, so that the cost of production carries a heavier share than the real spending.
  3. CThe absorption rate being recalculated correctly at the end of every month, so that it always reflects the most recent figures the costing records hold.
  4. DThe actual level of activity turning out to be exactly equal to the budgeted level of activity that was used to calculate the absorption rate.

Question 415

[1 marks]Overhead analysis, apportionment and reapportionment, absorption rates, job costing
How does under absorption of overheads affect a business's final accounts?
  1. AThe under-absorbed amount is ignored altogether, since only over absorbed overhead ever calls for an adjustment at the year end.
  2. BThe under-absorbed amount is written off as an additional expense in the income statement, reducing the reported profit for the period.
  3. CThe under-absorbed amount is shown as a cash receipt in the statement of cash flows, since the overhead was charged to jobs but never actually spent.
  4. DThe under-absorbed amount is added to the value of closing inventory in the statement of financial position, increasing the reported profit.

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