Pass year questions

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QUESTION 1

Lille has prepared the following Trading Account, in respect of the year ended 30 September 2008:

000 000

Sales

120

Less

Cost of goods sold Opening stock

12

Purchases 77

89

Closing stock

83

Gross profit

37

In previous years, the gross profit to sales ratio was 33

%. Lille suspects his assistant may be

stealing goods from stock.

REQUIRED

(a)

Calculate the value of goods the assistant may have stolen, in the year to 30 September 2008:

(i)

at cost price

(ii)

at selling price.

(6 marks)

(b) Give

four other

possible reasons for the fall in gross profit to sales ratio, in the year to

30 September 2008.

(8 marks)

Sedans fixed assets at 1 January 2008 were shown in her Balance Sheet as follows:

Cost Accumulated

Depreciation

NBV

000 000 000

Buildings 720

260

460

Plant and machinery

400

200

200

During the year ended 31 December 2008, the following transactions took place in relation to fixed

assets:

(1)

Buildings (cost 40,000, accumulated depreciation 10,000) were sold for 8,000

(2)

New buildings were purchased for 120,000

(3)

Plant and machinery (cost 30,000, net book value 10,000) was sold for 17,000

(4)

New plant and machinery was purchased for 70,000.

Buildings are depreciated at 2% on a straight line basis, assuming zero residual value. Plant and

machinery is depreciated at 20% on a reducing balance basis. A full years depreciation is charged in

the year of purchase and none in the year of sale.

REQUIRED

(c)

Calculate for Sedan, the cost, accumulated depreciation, and net book value at

31 December 2008 of:

(i) Buildings

(ii)

Plant and machinery.

(11 marks)

(Total 25 marks)