Business Finance and Management Accounting

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BUSINESS FINANCE AND MANAGEMENT ACCOUNTING
Unit short code : BUSFINACC
REFERRAL CW1 , JULY 2012

QUESTION 1
Adjustments| | | | | | |
Closing stock = £111 317| | | | | |
Ordinary shares = 300 000| | Preference shares = 50 000| | nominal value = £0.5| | | nominal value = £1| | |
share capital = 300 000* 0.5 = £150 000| | share capital = £ 50 000| | ordinary share dividend = 18%| | preference share dividend = 12%| | ordinary dividend = 150 000 * 0.18 = £27 000| | preference dividend = 50 000 * 0.12 = £6 000| | Total accrued dividends = 33 000 | | | | |

Accrued rent = £802| | | | | | |
Accrued directors' remuneration = £6 000| | | | |
Debenture interest | | | | | | |
8% Debenture = £40 000| | | | |
Debenture interest = 40 000 x 0.08 = £3 200| | | |
Accrued interest (1/2) = 3 200 : 2 = £1 600| | | | |
Equipment cost = £225 000| | | |
r = 20%| | | | | | | |
Motor vehicle cost = £57 200| |
r = 25%Accumulated depreciation = £14 300| | | | | | Profit and Loss Account = £10 000| | | | | |
Reserves = £10 000| | | | | |
PROFIT AND LOSS ACCOUNT
Sales| 880 426|  |
(Return inwards)| -18 400|  |
Net Sales| 862 026| 862 026|
Cost of Sales:|  |  |
Opening stock| 102 994|  |
Purchases| 419 211|  |
Carriage inwards| 1 452|  |
(Closing stock)| -111 317|  |
COGS| 412 340| |
Gross profit|  | 449 686|
Less expenses:|  |  |
Interest | 3200|  |
Rent, rate and ins.|  17 042|  |
Discount allowed| 3 415|  |
Directors' rem.|  88 400|  |
Depreciation| 59 300 |  |
Wages and salaries| 123 289| |
Total expenses| 294 646| |
Net Profit|  | 155 040|
(Dividends)|  | -33 000|
Retained Profit|  | 122 040|
Profit brought f/d|  | 12 411|
(Tranfer to Reserves)|  | -10 000|
Profit carried f/d|  | 124 451|

BALANCE SHEET
NCA:|  |  |
Equipment| 225 000|  |
Depreciation| -77 600|  147 400|
Motor vehicles| 57 200|  |
Depreciation| -32 500|  24 700 |
Total NCA|  | 172 100|
CA:|  |  |
Closing stock| 111 317|  |
Debtors| 227 219|  |
Bank| 4 973|  |
Cash| 62|  |
Total CA| | 343 571|
CL:|  |  |
Creditors| 54 818|  |
Accruals| 6 802|  |
Dividend accrued| 33 000|  |
Deb.interest accrued| 1 600|  |
Total CL| | 96 220|
Net current assets|  | 247 351|
Net assets|  | 419 451|
Financed by:|  |  |
Share capital| 200 000|  |
Reserves | 55 000|  |
Profit carried f/d| 124 451|  |
Shareholders' fund| 379 451| |
8% Debentures|  | 40 000|
Total:|  | 419 451|

QUESTION 2:
1. FIFO
Date| Receipts | Issues |
| Quantity| P/unit| Tot. value| Quantity| P/unit| Tot. value| | kg| £| £| kg| £| £|
January| 200| 5| 1000|  |  |  |
February|  |  |  | 100| 5| 500|
March| 500| 3| 1500|  |  |  |
April|  |  |  | 300| 100*5+200*3| 1100|
May| 800| 4| 3200|  |  |  |
June|  |  |  | 400| 300*3+100*4| 1300|
July| 900| 2| 1800| 1400| 700*4+700*2| 4200|
| | | | | Total:| 7100|

Closing stock = 200*2 = £400| | | | | |
Cost of used materials = £7 100| | | | |
Other costs = £6 000| | | |
Cost of sales = £13 100Sales = £18 000Gross profit= 4 900| | | | | | | Gross profit margin = (4 900/ 18 000)*100 = 27.2%| | | | Mark-up = (4 900/13 100)*100 = 37.4%| | | | |

2. CONTINUOUS WEIGHTED AVERAGE
Date| Receipts | Issues |
| Quantity| P/unit| Tot. value| Quantity| P/unit| Tot. value| | kg| £| £| kg| £| £|
January| 200| 5| 1000|  |  |  |
February|  |  |  | 100| 5| 500|
March| 500| 3| 1500|  |  |  |
April|  |  |  | 300| 3,33| 999|
May| 800| 4| 3200|  |  |  |
June|  |  |  | 400| 3,82| 1528|
July| 900|...
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