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9706_s02_qp_3

9706_s02_qp_3

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Published by: sam713 on Jun 16, 2012
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This question paper consists of 11 printed pages and 1 blank page.
SP (NF) S23397/1 ©CIE 2002
[Turn overCAMBRIDGEINTERNATIONALEXAMINATIONSGeneral Certificate of Education Advanced Level
ACCOUNTING
9706/3
PAPER 3 Multiple Choice (Extension)
MAY/JUNE SESSION 2002
1 hourAdditional materials:
Multiple Choice answer sheetSoft clean eraserSoft pencil (Type B or HB is recommended)
TIME
1 hour
INSTRUCTIONS TO CANDIDATESDo not open this booklet until you are told to do so.
Write your name, Centre number and candidate number on the answer sheet in the spaces providedunless this has already been done for you.There are
thirty
questions in this paper. Answer
all
questions. For each question, there are fourpossible answers,
A
,
B
,
C
and
D
. Choose the
one
you consider correct and record your choice in
softpencil
on the separate answer sheet.
Read very carefully the instructions on the answer sheet.INFORMATION FOR CANDIDATES
Each correct answer will score one mark. A mark will not be deducted for a wrong answer.Any rough working should be done in this booklet.
 
2
9706/3/M/J/02
1
A company is considering redeeming its debentures at par at the start of its financial year.What will be the effect on the company’s profit and net current assets in the year of redemption?
2
The table shows a company’s Balance Sheet.A cash redemption of 100000 ordinary shares at a premium of 20% is now proposed.What will the company’s Balance Sheet include following the redemption of shares?profitnet current assets
A
decreasedecrease
B
decreaseincrease
C
increasedecrease
D
increaseincrease$Issued share capital –$1.00 ordinary shares600000Share Premium account150000Distributable profits130000_______880000_______Share PremiumCapital RedemptionaccountReserve$$
A
130000100000
B
130000120000
C
150000100000
D
150000120000
 
3
9706/3/M/J/02
[Turn over3
The Balance Sheet of a company includes the following.$000Ordinary share capital600Share Premium account200Retained profit100___90010% Debenture stock 2000/2003120The company has decided to redeem all its debenture stock at a premium of 10%.Which of the following is true?
A
The company must create a Capital Redemption Reserve.
B
The debenture stock must have been issued at a premium.
C
The premium may be debited to the Share Premium account.
D
The premium must be debited in the Profit and Loss Account.
4
A business with net tangible assets of $110000 is purchased by a company for $150000.The company completes the transaction by a cash payment of $20000 and an issue of its $0.50ordinary shares, fully paid, at $1.30 each.By how much will the balance on the company’s Ordinary Share Capital account increase?
A
$50000
B
$90000
C
$100000
D
$130000
5
A limited company purchases a business by issuing 320000 $1.00 ordinary shares at a premiumof $0
.
75 per share. Goodwill of $150000 arises on the purchase.What is the fair value of the separable net assets?
A
$170000
B
$410000
C
$560000
D
$710000

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