Accounting a Level A2 Specimen Paper May 2005

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9011

London Examinations GCE
Accounting Advanced Level Unit 2 – Corporate and management accounting Specimen Paper
First examination May 2005 Time: 3 hours
Materials required for examination Answer Book (AB16) Items included with question papers Accounting paper (AB34) (6 sheets per candidate)

Instructions to Candidates Answer FIVE questions, choose TWO from Section A and THREE from Section B. In the boxes on the answer book, write the name of the examining body (London Examinations), your centre number, candidate number, the subject title (Accounting), the paper reference (9011), your surname and signature. Answer your questions in the answer book. Make sure your answers to parts of questions are clearly numbered. Use additional answer sheets if necessary. If the accounting paper provided does not allow you to set out your answer in the way you wish, rule up a page of the answer book to suit your requirements. Information for Candidates The total mark for this paper is 100. The marks for parts of questions are shown in round brackets: e.g. (2). This paper has 7 questions. Calculators may be used. Advice to Candidates Write your answers neatly and in good English.

This publication may only be reproduced in accordance with London Qualifications copyright policy. © 2005

Revised GCE Advanced Subsidiary and Advanced Level Accounting 8011/9011 – Specimen Papers and Mark Schemes

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SECTION A Answer TWO questions from this section 1. The balance sheets of Limsol Ltd as at 31 October 2003 and 31 October 2002 were as follows: 31October 2003 Fixed assets (Net) Current assets Stock Debtors Bank £ 127 500 79 500 27 000 234 000 Creditors: due within one year Creditors Proposed dividends 117 000 37 500 154 500 79 500 979 500 78 000 30 000 108 000 177 000 897 000 £ 133 500 102 000 49 500 285 000 £ 900 000 31October 2002 £ 720 000

Creditors: due after one year 10% Debentures 195 000 784 500 90 000 807 000

Issued share capital 750 000 ordinary shares of £1 each Reserves Share premium General reserve Profit and loss 750 000 7 500 27 000 784 500 600 000 150 000 57 000 807 000

24======================Revised GCE Advanced Subsidiary and Advanced Level Accounting 8011/9011 – Specimen Papers and Mark Schemes

Additional Information: (i) (ii) (iii) (iv) During the year ended 31 October 2003, fixed assets with a net book value of £30 000 were sold for £37 500 and fixed assets costing £300 000 were purchased. An issue of one bonus share for every four shares held was made on 30 June 2003. To improve the working capital position the directors sanctioned a further issue of debentures on 1 November 2002. An interim dividend of £15 000 was paid on 31 May 2003.

Required: (a) Prepare a statement reconciling operating profit to net cash inflow or outflow from operations. (13) Prepare a cash flow statement for Limsol Ltd for the year ended 31 October 2003 in accordance with the requirements of FRS 1. (9) “The management of cash flow is more important than profitability to ensure the survival of a business”. Explain this statement. (4) (Total 26 marks)

(b)

(c)

Revised GCE Advanced Subsidiary and Advanced Level Accounting 8011/9011 – Specimen Papers and Mark Schemes

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2.

The balance sheets of Rumba Ltd and Samba Ltd at 31 July 2003 were as follows: Rumba Ltd £ 240 000 93 750 333 750 29 625 31 050 28 950 89 625 50 250 39 375 373 125 225 000 27 000 121 125 373125 Samba Ltd £ 144 000 37 050 181 050 15 675 14 280 7 455 37 410 43 680 (6 270) 174 780 135 000 39 780 174 780

Fixed assets Premises at cost Vehicles at net book value Machinery at net book value Current asssets Stock Debtors Bank Current liabilities Creditors Working capital Financed by: Ordinary shares of £1 each Share Premium Profit & Loss

On 1 August 2003 Combo Ltd was formed, with an authorised capital of 750 000 ordinary shares of £1 each, to take over the assets and liabilities of both companies at book value with...
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