Pearson LCCI

Certificate in Advanced
Business Calculations
Level 3
Friday 8 April 2016 Paper Reference

Time: 3 hours ASE3003

You will need:
An answer book

Instructions
•• Use
Do not open this examination paper until you are told to do so by the supervisor.
black/blue ink or ball-point pen
– pencil can only be used for graphs, charts, diagrams, etc.
• Ensure your answers are written clearly.
• Begin your answer to each question on a new page.
• Write on both sides of the page.
• All answers must be correctly numbered but need not be in numerical order.
• If you need more space, use the additional sheets provided. Write your name,
candidate number and question number on each sheet and attach them to the
inside of your answer book. State, on the front of your answer book, the number
of additional sheets attached.
•
•
Answer all questions.
Workings must be shown.

Information
•• TTheheretotalaremark for this paper is 100.
eight questions in this question paper.
• T–heusemarks for each question are shown in brackets
this as a guide as to how much time to spend on each question.
•• Y Youou may use mathematical and statistical tables.
may use a calculator provided the calculator gives no printout, has no
word display facilities, is silent and cordless. The provision of batteries and their
condition is your responsibility.

Advice
•• RCead each question carefully before you start to answer it.
heck your answers carefully if you have time at the end.
Turn over

P50582A
©2016 Pearson Education Ltd.

1/1/1/1/1
*P50582A*
 Answer ALL questions.
1 Eugene calculates the interest credited to his bank account for 5 days in May, when
the rate of simple interest was 2.25% per annum (assume 1 year = 365 days).
He calculates that the interest for this period is £2.97
(a) Calculate the balance in the account during this period, based on this figure.
(2)
A more accurate figure for the interest for this period is £2.969439
(b) Calculate the actual balance in the account during this period.
(2)
Eugene is charged 8.9% per annum simple interest on debit balances.
(c) Calculate the amount of interest charged daily on a debit balance of £550.
(2)
(d) Calculate the principle that will earn £41,603.68 interest, when invested at 3.3%
compound interest per annum for four years.
(4)
(e) Calculate the compound interest rate per annum that will give interest of
£1,099.80 after one year on an investment of £56,400.
(2)

(Total for Question 1 = 12 marks)

2
P50582A
2 Fiona buys ordinary shares in three companies and later receives a dividend from
each. She tabulates the figures as follows:

Company A Company B Company C

Number of shares 15,000 23,000 ?

Nominal value of one share £5 ? £40

Buying price per share £9.80 ? 146p

Broker’s commission £95 £70 £90

Total cost of shares, including commission ? £136,000 £12,500

Dividend (percentage of nominal value) 3.5% 2.6% ?

Dividend (amount) ? £5,980 £238

Calculate the six missing figures.

(Total for Question 2 = 12 marks)

3
P50582A
Turn over
3 Geordie draws a chart showing both costs and sales income, plotted against number
of units, for a manufacturing and trading period.
In answering this question, do not draw the chart.
To represent sales, he draws a straight line through the origin (0 units, £0) and the
point (30,000 units, £216,000).
(a) Calculate the:
(i) selling price per unit of product
(2)
(ii) income from sales of 15,000 units.
(2)
To represent total manufacturing costs, Geordie draws a straight line through the
points (0 units, £51,000) and (20,000 units, £161,000).
(b) State the fixed cost per period.
(1)
(c) Calculate the variable cost per unit.
(3)
Helen says that the two chart lines will cross at the point (20,000 units, £166,000).
Ivan says that the chart lines will cross at the point (30,000 units, £216,000). Only one
of them is correct.
(d) Provide a calculation to show which one of them is correct.
(3)
(e) State what this crossing point represents.
(1)

(Total for Question 3 = 12 marks)

4
P50582A
4 In 2014, Company A had stock at the start of the year (opening stock) valued at
£90,040. The stock at the end of the year (closing stock) was valued at £93,000.
(a) Calculate the average stock held over the year.
(2)
The cost of goods sold in 2014 was £803,000.
(b) Calculate the:
(i) average number of days that items remained in stock
(2)
(ii) net purchases for the year.
(2)
The purchase returns in 2014 were £5,160.
(c) Calculate the gross purchases for the year.
(2)
In 2015 the average stock held over the year was £91,480.
(d) Calculate the stock held at the end of 2015.
(2)
The rate of stockturn in 2015 was 9.
(e) Calculate the net purchases in 2015.
(3)

(Total for Question 4 = 13 marks)

5
P50582A
Turn over
5 An investor is considering an investment project.
The initial cost of the project (in year 0) is £3,500,000. It is estimated to have a net
cash outflow of £250,000 in year 1, and a net cash inflow of £900,000 in each of the
following five years, after which there are no further cash inflow or outflows.
A table of calculations of payback period and net present value is produced
as follows:

Annual net cash Cumulative Discount Present

inflow/(outflow) inflow/(outflow) factor value
Year 0 (3,500,000) (3,500,000) g h
Year 1 (250,000) e 0.922 j
Year 2 900,000 (2,850,000) 0.849 764,100
Year 3 d (1,950,000) 0.783 704,700
Year 4 900,000 (1,050,000) 0.722 649,800
Year 5 900,000 (150,000) 0.665 598,500
Year 6 900,000 f 0.613 k

(a) Calculate the missing figures in the table:

(i) d, e, f, g and h
(5)
(ii) j and k.
(4)
(b) Calculate the payback period for the project in years and months.
(3)

(Total for Question 5 = 12 marks)

6
P50582A
 6 Jacqui is owed money in three bankruptcies.
In Bankruptcy X, Jacqui is an unsecured creditor. She is owed £35,000 and
receives £4,900.
(a) Calculate the rate in the pound paid to unsecured creditors in Bankruptcy X.
(2)
In Bankruptcy X, the secured creditors are owed £44,100, the unsecured creditors are
owed £275,000, and the expenses of winding up the business are £2,400.
(b) Calculate the value of the assets in Bankruptcy X at the start of the process of
winding up.
(3)
In Bankruptcy Y, Jacqui is owed money as a secured creditor and also as an unsecured
creditor. She is owed £18,800 in total, and receives £11,000 in total. The rate paid to
unsecured creditors is £0.35 in the pound.
(c) Calculate the amount owed to:
(i) an unsecured creditor who is paid £349.65
(2)
(ii) Jacqui as a secured creditor in Bankruptcy Y.
(3)
In Bankruptcy Z, Jacqui is owed £7,750 as a secured creditor and £25,000 as an
unsecured creditor. The rate in the pound paid to unsecured creditors is £0.09
(d) Calculate the total amount paid to Jacqui in Bankruptcy Z.
(2)

(Total for Question 6 = 12 marks)

7
P50582A
Turn over
7 A factory machine has a life of five years.
For the first three years, the machine is depreciated by the equal instalment (straight
line) method, with an annual depreciation rate equal to 20% of its original cost.
The book value at the end of three years is £36,000.
(a) Calculate the original cost of the machine.
(3)
For the remaining two years, the machine is depreciated by the diminishing balance
(reducing balance) method, with an annual depreciation rate of 65%.
(b) Calculate the:
(i) depreciation in year 4
(2)
(ii) scrap value at the end of year 5.
(2)
(c) Write out a depreciation schedule for the life of the machine, showing for each
year the annual depreciation, the cumulative depreciation and the book
value at the end of the year.
(5)

(Total for Question 7 = 12 marks)

8
P50582A
8 Table A shows the number of units per year of Item X produced by Manufacturer M as
an index with year 2000 as the base year:

Table A
Year 2012 2013 2014
Index 200 260 247

(a) Calculate the index for years 2013 and 2014 as a chain base index.
(3)
(b) Calculate the quantity relative for 2014 with 2012 as the base year.
(2)
Table B shows the average selling price of Item X in each year as a chain base index:

Table B
Year 2012 2013 2014
Index 120 90 110

(c) Calculate index values for years 2013 and 2014 based on year 2012 = 100
(3)
(d) State the price relative for 2012 based on year 2011.
(1)
In 2010, the average selling price of Item X was £40, and the number of items sold
was 10,500. In 2011, the average selling price of Item X was £36. For 2010 and 2011
taken together, the average selling price of Item X was £38.10
(e) Calculate the:
(i) number of items sold in 2011
(4)
(ii) average selling price of Item X in 2012.
(2)

(Total for Question 8 = 15 marks)

TOTAL FOR PAPER = 100 MARKS

9
P50582A
 BLANK PAGE

10
P50582A
 BLANK PAGE

11
P50582A
 BLANK PAGE

12
P50582A