Q1: Which of the fol wing items should be treated as capital expenditure in the financial statements of a sole trader?

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Q2: Which of the fol wing is an aspect of relevance according to the IaSB's Conceptual Framework?

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Q3: according to the IaSB's Conceptual Framework which qualitative characteristics enhance the usefulness of information that is relevant and faithfully represented?

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Q4: Which three of the fol wing users of financial statements are likely to be interested in the financial statements of a small private company?

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Q5: In relation to the business of a sole trader which two of the fol wing does the government and its agencies need to be able to do?

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Q6: Information about an entity's financial position is primarily provided in:

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Q7: according to the IaSB's Conceptual Framework information on which two of the fol wing areas can help users identify the reporting entity's financial strengths and weaknesses?

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Q8: according to IaS 1 Presentation of Financial Statements which two of the fol wing are objectives of financial statements?

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Q9: Information is relevant if it is capable of making a difference in the decisions made by users. according to the IaSB's Conceptual Framework financial information is capable of making a difference in decisions if it has which of the fol wing?

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Q10: Predictive value

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Q11: Comparative value

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Q12: Historic value

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Q13: Confirmatory value

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Q14: The accounting principle which in times of rising prices tends to understate asset values and overstate profits is:

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Q15: In times of rising prices what effect does the use of the historical cost concept have on a company's asset values and profit?

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Q16: Which of the fol wing statements about accounting concepts and the characteristics of financial information is correct?

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Q17: Listed be w are two comments on accounting conventions.

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Q18: according to the IaSB's Conceptual Framework financial information must be either relevant or faithfully represented if it is to be useful.

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Q19: Materiality means that only items having a physical existence may be recognised as assets. Which if either of these comments is correct?

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Q20: Which of the fol wing is the best description of fair presentation in accordance with IaS 1 Presentation of Financial Statements?

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Q21: Which of the fol wing definitions for the going concern concept in accounting is the c sest to the definition given in IaS 1 Presentation of Financial Statements?

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Q22: according to IaS 1 Presentation of Financial Statements compliance with International accounting Standards and International Financial Reporting Standards will normally ensure that:

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Q23: The directors of Lagon plc wish to omit an item from the company's financial statements on the grounds that it is commercially sensitive. Information on the item would influence the users of the information when making economic decisions. according to IaS 1 Presentation of Financial Statements the item is said to be:

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Q24: Which three of the fol wing are fundamental principles of the IESBa Code of Ethics for Professional accountants?

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Q25: Which of the fol wing statements is correct?

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Q26: Which of the fol wing statements best describes ethical guidance in the UK?

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Q27: There are two main approaches to a code of professional ethics: a rules-based ethical code and a code based upon a set of principles. Indicate whether the fol wing statements are true or false. The ICaEW uses a rules-based approach. F False

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Q28: Which of the following best explains what is meant by 'capital expenditure'? Capital expenditure is expenditure:

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Q29: Which of the following should be accounted for as capital expenditure?

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Q30: Which of the following items should be treated as capital expenditure in the financial statements of a sole trader?

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Q31: Which of the following is an aspect of relevance according to the IASB's Conceptual Framework?

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Q32: According to the IASB's Conceptual Framework which qualitative characteristics enhance the usefulness of information that is relevant and faithfully represented?

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Q33: Which three of the following users of financial statements are likely to be interested in the financial statements of a small private company?

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Q34: In relation to the business of a sole trader which two of the following does the government and its agencies need to be able to do?

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Q35: Information about an entity's financial position is primarily provided in:

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Q36: According to the IASB's Conceptual Framework information on which two of the following areas can help users identify the reporting entity's financial strengths and weaknesses?

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Q37: According to IAS 1 Presentation of Financial Statements which two of the following are objectives of financial statements?

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Q38: Information is relevant if it is capable of making a difference in the decisions made by users. According to the IASB's Conceptual Framework financial information is capable of making a difference in decisions if it has which of the following?

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Q39: Predictive value

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Q40: Comparative value

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Q41: Historic value

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Q42: Confirmatory value

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Q43: The accounting principle which in times of rising prices tends to understate asset values and overstate profits is:

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Q44: In times of rising prices what effect does the use of the historical cost concept have on a company's asset values and profit?

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Q45: Which of the following statements about accounting concepts and the characteristics of financial information is correct?

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Q46: Listed below are two comments on accounting conventions.

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Q47: According to the IASB's Conceptual Framework financial information must be either relevant or faithfully represented if it is to be useful.

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Q48: Materiality means that only items having a physical existence may be recognised as assets. Which if either of these comments is correct?

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Q49: Which of the following is the best description of fair presentation in accordance with IAS 1 Presentation of Financial Statements?

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Q50: Which of the following definitions for the going concern concept in accounting is the closest to the definition given in IAS 1 Presentation of Financial Statements?

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Q51: According to IAS 1 Presentation of Financial Statements compliance with International Accounting Standards and International Financial Reporting Standards will normally ensure that:

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Q52: The directors of Lagon plc wish to omit an item from the company's financial statements on the grounds that it is commercially sensitive. Information on the item would influence the users of the information when making economic decisions. According to IAS 1 Presentation of Financial Statements the item is said to be:

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Q53: Which three of the following are fundamental principles of the IESBA Code of Ethics for Professional Accountants?

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Q54: Which of the following statements is correct?

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Q55: Which of the following statements best describes ethical guidance in the UK?

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Q56: There are two main approaches to a code of professional ethics: a rules-based ethical code and a code based upon a set of principles. Indicate whether the following statements are true or false. The ICAEW uses a rules-based approach. F False

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Q57: The accounting equation can be written as:

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Q58: The capital of a sole trader would change as a result of:

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Q59: A business can make a profit and yet have a decreased bank balance. Which of the following might cause this to happen?

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Q60: The purpose of the financial statement that lists an entity's total assets and total capital/liabilities is to show:

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Q61: A sole trader is £5 000 overdrawn at her bank and receives £1 000 from a credit customer in respect of its account. Which element(s) of the accounting equation will change due to this transaction?

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Q62: A sole trader purchases goods on credit. Which element(s) of the accounting equation will change due to this transaction?

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Q63: A sole trader borrows £10 000 from a bank. Which element(s) of the accounting equation will change due to this transaction?

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Q64: A sole trader sells goods for cash for £500 which had cost £300. Which element(s) of the accounting equation will change due to this transaction?

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Q65: A sole trader increases the business's number of motor vehicles by adding his own car to the business's fleet. Which element(s) of the accounting equation will change due to this transaction?

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Q66: Which three of the following are elements of financial statements as identified by the IASB’s Conceptual Framework? F Resources G Equity

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Q67: A business paid out £12 450 in net wages to its employees. In respect of these wages the following amounts were shown in the statement of financial position. £ PAYE payable 2 480 National Insurance payable – employees' 1 350 – employer's 1 500 No other deductions were made. Employees' gross wages before deductions were:

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Q68: Which of the following is a source document that would be ed into the accounting system?

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Q69: Which of the following best explains the imprest system of petty cash?

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Q70: On 1 April Amara had a balance of £100 (the imprest amount) in petty cash. At the end of April she has vouchers totalling £38 a receipt for a refund for stationery of £4 and a note to say that an employee was reimbursed £12 in respect of postage costs but no voucher was issued. How much does Amara need to reinstate her imprest balance at 30 April?

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Q71: The following data has been extracted from the payroll records of Kleen Ltd for the month of February 20X1. £ PAYE 17 000 Employer's NIC 7 500 Employees' NIC 6 000 Cash paid to employees 50 000 The wage expense for the month is:

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Q72: When a purchase invoice is received from a supplier which two of the following documents would the invoice be checked to?

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Q73: George purchases goods on credit from Hardeep for £1 000. £100 of these goods are defective and George returns them to Hardeep. What document would Hardeep issue to George in respect of the returned goods?

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Q74: Oscar downloads a report of his bank transactions for the day. The report shows a cash payment of £412 which the computerised accounting system has not been able to match to a transaction. The unmatched payment is most likely the result of:

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Q75: A business has the following payroll costs for a month: £ Gross pay 112 450 Income tax deducted 15 800 Employees' national insurance 9 810 Employer's national insurance 11 200 What is the net amount paid to employees for the month?

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Q76: Holly has downloaded a transaction report from her electronic banking system. The report shows a receipt of £565 which the computerised accounting system has not been able to match to a transaction. Which of the following transactions may have resulted in the unmatched receipt?

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Q77: The petty cash float in a business has an imprest amount of £200. At the end of March vouchers in the petty cash box totalled £136 and the amount of cash remaining in the box was £54. Which of the following explains the difference?

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Q78: A business has the following payroll costs for a month: £ Gross pay 38 600 Income tax 5 400 Employees' national insurance 3 100 Employer's national insurance 3 500 What is the wages cost to the business for the month?

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Q79: Which two of the following are source documents that contain information that will be ed into a business's accounting system?

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Q80: Richard is a VAT registered trader whose sales and purchases carry VAT at the standard rate of 20%. Richard sells a customer goods on credit for £4 800 exclusive of VAT. The double entry to record this transaction is:

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Q81: What transaction is represented by the entries: Debit rent Credit landlord?

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Q82: In double-entry bookkeeping which of the following statements is true?

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Q83: A debit balance of £3 000 brought down on A Ltd's account in B Ltd's books means that B Ltd owes A Ltd £3 000.

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Q84: Crimson plc paid an invoice from a credit supplier and took advantage of the early settlement discount offered. When the invoice was received and recorded Crimson plc did not expect to take the discount. The journal entry to record the payment of the invoice is:

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Q85: Winn Ltd has opening trade payables of £24 183 and closing trade payables of £34 655. Purchases for the period totalled £254 192 (£31 590 relating to cash purchases). Total payments recorded in the payables ledger for the period were:

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Q86: A bakery business which is registered for VAT issued the following invoice to one of its customers: Cakes: 150 @ £12 1 800 Less 5% trade discount (90)

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Q87: 710 Assuming the VAT rate is 20% and that the invoice amounts are exclusive of VAT what amount of VAT should have been charged on the invoice?

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Q88: What is the correct double entry to record an invoice raised to a credit customer who is not expected to take advantage of an early settlement discount?

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Q89: Which of the following could be a debit entry in the payables account?

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Q90: A payment has been received from a credit customer in settlement of an invoice. The customer was expected to take advantage of a settlement discount offered however payment was not made within the required timeframe and the discount was not taken. The correct double entry to record the full settlement of the invoice is:

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Q91: A business which is registered for VAT received the following invoice from one of its VAT registered suppliers: Goods: 100 @ £10 1 000 Less trade discount (50) 950 Assume the business is not expected to make the payment within 14 days and the VAT rate is 20%. What amount of VAT should have been charged on the invoice? Chapter 5: Preparing basic financial statements

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Q92: Anchor Ltd is preparing its financial statements. After transferring the balances on all the income and expense ledger accounts to the profit and loss ledger account the total credits in the profit and loss ledger account exceed the total debits by £4 000. Which two of the following statements about Anchor Ltd are correct?

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Q93: Which of the following would be classified as a non-current asset?

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Q94: Gerrard Ltd is registered for VAT. In the month of April it sells goods to customers for a total of £89 436 excluding VAT and purchases goods from suppliers for a total of £86 790 including VAT. What is the net amount shown in Gerrard Ltd's VAT account at the end of April?

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Q95: Which of the following statements concerning preparation of financial statements is true?

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Q96: A sole trader had trade receivables of £2 700 at 1 May and during May made cash sales of £7 200 credit sales of £16 500 and received £15 300 from his credit customers. The balance on his trade receivables account at the end of May was:

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Q97: Which two of the following types of account would normally appear on the debit side of the initial trial balance?

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Q98: Which of the following would be a credit balance in the trial balance?

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Q99: Rose Ltd was set up on 1 May 20X8 with opening capital of £1 000. During the month of May it ed into the following transactions: £ Purchases of goods for resale on credit 12 100 Payments to credit suppliers 8 400 Sales on credit 16 200 Sales in cash 1 300 Receipts from credit customers 3 200 Non-current assets purchased for cash 1 500 Depreciation 100 Other expenses all paid in cash What is the net profit earned by Rose Ltd in the month of May 20X8? 800

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Q100: Plym plc is a VAT registered retailer. All transactions attract VAT at the rate of 20%. For the year to 30 June 20X7 Plym plc made purchases of £69 600 including VAT and made sales of £89 400 excluding VAT. There was no change in the figures for opening and closing inventory in the statements of financial position as at 30 June 20X6 and 20X7. What was Plym plc's gross profit for the year ended 30 June 20X7?

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Q101: Violet had an opening trade payables balance of £3 450 on 1 December. During the month of December she sold goods totalling £6 780 to customers on credit purchased goods totalling £5 100 from suppliers on credit and made cash purchases of £400. She also received £3 900 from credit customers and made payments to credit suppliers of £4 200. The balance on Violet's trade payables account at the end of December was:

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Q102: The following are balances on the accounts of Luigi a sole trader as at the end of the current financial year and after all entries have been processed and the profit for the year has been calculated. £ Non-current assets 85 000 Trade receivables 7 000 Trade payables 3 000 Bank loan 15 000 Accumulated depreciation non-current assets 15 000 Inventory 4 000 Accruals 1 000 Prepayments 2 000 Bank overdraft What is the balance on Luigi's capital account? 2 000 Chapter 6: Errors and corrections to accounting records and financial statements

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Q103: Which three of the following situations are likely to result in a suspense account being used to record a transaction?

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Q104: As at 31 December 20X1 the transaction report downloaded from a company's electronic banking system shows an overdraft of £1 500. The transaction report includes bank charges of £30 which have not yet been recorded in the company's cash at bank account. On

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Q105: December 20X1 the company had paid a cheque of £500 to a supplier and received £200 from a credit customer; neither of these items appear in the bank statement. The overdraft on the bank balance in the company's statement of financial position at 31 December 20X1 should be:

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Q106: Indicate whether the following statements are true or false. The owner's drawings are shown on the initial trial balance. The closing inventory balance is included in the final trial balance.

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Q107: When performing a reconciliation between the electronic banking system and the cash at bank account which two of the following would require an entry in the cash at bank account?

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Q108: Epsilon's cash at bank account at 31 December 20X3 shows a balance of £565 overdrawn. On comparing this with the transaction report downloaded from the electronic banking system the accountant discovers the following:

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Q109: A cheque for £57 drawn by Epsilon on 29 December 20X3 has not yet been presented for payment.

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Q110: A cheque for £92 from a customer which was paid into the bank on 24 December 20X3 has been dishonoured on 31 December 20X3. The correct balance in Epsilon's cash at bank account as at 31 December 20X3 is:

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Q111: Smyths's draft profit for the year is £324 700. After the draft profit was calculated the following issues were discovered. • Debts of £6 800 should have been written off as irrecoverable at the year end but the journal entry was not posted. • The accounting system had automatically calculated and recorded depreciation but the standing data was found to be incorrect. The depreciation rate for cars should have been updated to 20% straight-line at the start of the year but was left as 25% straight- line in error. The balance on the car cost account at the year end was £24 000. There were no additions or disposals of cars in the year. What is Smyths's corrected profit for the year after accounting for the above issues?

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Q112: The following information relates to a bank reconciliation. The balance in the cash at bank account before taking the items below into account was £8 970 overdrawn.

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Q113: Bank charges of £550 on the bank statement have not been ed in the cash at bank account.

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Q114: The bank has credited the account in error with £425 which belongs to another customer.

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Q115: Cheque payments totalling £3 275 have been ed in the cash at bank account but have not been presented for payment.

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Q116: Cheques totalling £5 380 have been correctly ed on the debit side of the cash at bank account but have not been paid in at the bank. What was the overdrawn balance as shown by the bank statement?

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Q117: A company's initial trial balance includes a balance of £25 000 in a suspense account. On reviewing the exception report the bookkeeper identified the amount as a purchase of machinery for £25 000. The amount had been correctly recorded in cash at bank but the other side of the transaction had not been matched by the accounting system. Which of the following journal entries would remove the suspense account and correctly record the purchase of machinery? £25 000 £25 000 £25 000 £25 000

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Q118: Which two of the following statements about bank reconciliations are correct?

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Q119: Alpha received a statement from its credit supplier Beta showing a balance to be paid of £8 950. Alpha's payables ledger for Beta shows a balance due to Beta of £4 140. Investigation reveals the following:

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Q120: A bank transfer made to Beta of £4 080 has not been recorded by Beta.

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Q121: Alpha has not adjusted the payables ledger for a £40 cash discount taken by Alpha but not allowed by Beta as payment was not made on time.

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Q122: Goods costing £380 returned by Alpha have not been recorded by Beta. What discrepancy remains between Alpha's and Beta's records after allowing for these items?

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Q123: Peri's customer unexpectedly took advantage of an early settlement discount for £300 paying £3 700 on an invoice which totalled £4 000. Peri's bookkeeper was not sure where to record the discount taken and so posted the following journal entry: DEBIT Cash at bank 3 700 DEBIT Suspense account 300 CREDIT Receivables 4 000 Which of the following journal entries will remove the suspense account and correctly record the discount?

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Q124: Which three of the following differences between a company's cash at bank account and its bank statement balance as at 30 November 20X3 would feature in the bank reconciliation?

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Q125: In performing a bank reconciliation exercise which two of the following require an entry in the cash at bank account?

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Q126: Two errors have been found in Trim plc's accounts:

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Q127: It was agreed that the credit balance of £420 in Ahmed's payables ledger should be set off against his account in the receivables ledger but no entries have been made in trade receivables or trade payables to reflect this.

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Q128: The balance of £420 owed by Thomas a credit customer is irrecoverable however the journal entry posted to write off the irrecoverable debt was for £180. The journal that corrects both these errors is:

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Q129: An error of principle would occur if plant and machinery purchased:

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Q130: Olivia's exception report showed £265 received in the business bank account and correctly recorded in cash at bank could not be matched by the accounting system and so had been posted to a suspense account. Olivia discovered that the receipt was in respect of a sales invoice for £295 on which the customer had unexpectedly taken a prompt payment discount of £30. The customer had paid within the required timeframe and so was entitled to take the discount. Which of the following journal entries should Olivia now post to correctly record the receipt and clear the suspense account?

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Q131: Which of the following statements about bank reconciliations are correct?

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Q132: All differences between the cash at bank account and the bank statement must be corrected by means of a journal entry.

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Q133: In preparing a bank reconciliation cheques received from credit customers before the period end but credited by the bank after the period end should reduce an overdrawn balance in the bank statement.

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Q134: Bank charges not yet ed in the cash at bank account should be dealt with by an adjustment to the balance per the bank statement.

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Q135: If a cheque received from a credit customer is dishonoured after date a credit entry in the cash at bank account is required.

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Q136: The following trade payables account contains some errors. All goods are purchased on credit. TRADE PAYABLES £ £ Purchases 945 800 Purchases (Discounts received from suppliers) 12 600 Trade receivables (contra) 4 200 Closing balance 410 400 1 373 000 Opening balance 384 600 Cash at bank account 988 400

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Q137: 373 000 What would be the closing trade payables balance when the errors have been corrected?

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Q138: An error of commission is one where:

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Q139: Owais's trial balance included a suspense account which had been automatically opened by the computerised accounting system. Using the exception report the bookkeeper identified that the balance in the suspense account was due to the following unmatched transactions:

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Q140: A payment to a credit supplier for £135 related to an invoice for £120. The business missed the deadline to take the early settlement discount it had expected to take.

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Q141: A receipt of £90 from a credit customer who had unexpectedly (but appropriately) taken an early settlement discount of £10.

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Q142: Interest received in the business bank account of £70. What is the balance on the suspense account?

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Q143: All Elmo's sales and purchases carry VAT at 20%. A customer has just returned goods sold for £230 excluding VAT. The double entry for this transaction is:

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Q144: Recording the purchase of stationery by debiting the computer equipment account would result in:

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Q145: In the trade payables of Magma plc an invoice of £807 from Ferdinand has been recorded as a credit note. After correcting this error the trade payables balance will be:

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Q146: Beta Ltd has calculated a draft gross profit of £150 000 and a draft net profit of £83 000 for the year ended 31 December 20X3. Two issues were then discovered:

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Q147: Inventory costing £5 000 with a resale value of £7 500 was received into the warehouse on 2 January 20X4 but had been included in the closing inventory amount at 31 December 20X3.

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Q148: £10 000 relating to staff training costs was incorrectly capitalised as part of the cost of a new machine which had been purchased on 1 July 20X3. Beta Ltd depreciates machinery on a straight-line basis at a rate of 20% per annum. After correcting these issues what amounts should Beta Ltd report for gross profit and net profit? Gross profit Net profit

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Q149: Ewan a sole trader has taken goods valued at £1 800 for his own use. This has not been recorded in arriving at his draft profit figure. To record the drawings he: Must adjust cost of sales by: So his reported profit will:

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Q150: The debit balance in Omar plc's cash at bank account at the year end is £42 510. The following items appear in the bank reconciliation at the year end. £ Unpresented cheques 2 990 Uncleared lodgements 10 270 What was the bank balance shown by the bank statement?

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Q151: Rochelle has a debit balance of £26 in Staint plc's payables ledger. Which of the following would alone explain this balance?

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Q152: Catt plc has prepared a draft statement of profit or loss at 31 May 20X1 which shows a gross profit of £99 500. Catt plc has now discovered that at both the beginning and the end of the period one line of inventory the Sungsa has been included at selling price: £1 240 at

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Q153: May 20X1 and £3 720 at 1 April 20X0. The Sungsa is always sold at a mark-up of 25% by Catt plc. After correcting this error Catt plc's gross profit for the year to 31 May 20X1 is:

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Q154: Mayo plc has prepared a draft statement of profit or loss that shows a net profit of £75 000 for the year ended 30 April 20X5. Subsequently the following matters have been discovered.

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Q155: A subscription notice for £1 000 was received in April 20X5 for the year to

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Q156: April 20X6. As the subscription had increased significantly Mayo plc decided to pay it in two equal instalments. The first instalment was paid on 28 April 20X5 and posted to the cash at bank account and to administrative expenses. No other entries have been made.

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Q157: Goods that cost £400 and sold at a gross margin of 75% were returned by Dandy Ltd on 30 April 20X5 after the inventory count had taken place. No credit note was issued. Once these matters have been dealt with Mayo plc's net profit for the year ended 30 April 20X5 will be:

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Q158: Hood plc has a draft net profit of £540 000. It discovered the following errors:

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Q159: Repair costs of £6 600 incurred on 1 November 20X1 were debited to fixtures and fittings. Hood plc depreciates fixtures and fittings at 25% per annum.

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Q160: An early settlement discount of £1 785 taken unexpectedly but appropriately by a customer was debited to trade receivables and credited to sales. On correction of these errors Hood plc's net profit will be:

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Q161: Nimbus plc has prepared draft financial statements for the year ending 30 June 20X0 following a physical inventory count. However on further investigation it has been realised that in a burglary at the company's warehouse in May 20X0 inventory at a cost of £18 000 was stolen. Nimbus plc has insurance which covers 40% of the cost of inventory stolen. The insurance company has agreed to pay in this instance but no money has yet been received. No accounting entries have been made in respect of the stolen inventory. Correcting this matter will:

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Q162: Net profit was calculated as being £10 200. It was later discovered that capital expenditure of £3 000 had been treated as revenue expenditure and revenue receipts of £1 400 had been treated as capital receipts. What is the net profit after correcting for these errors?

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Q163: On reviewing its cash at bank account and the transaction report downloaded from its electronic banking system Probla plc discovers the following errors:

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Q164: A cheque from a credit customer for £1 095 was recorded in trade receivables and cash at bank account as £1 509.

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Q165: A cheque to a credit supplier for £89 was ed incorrectly in trade payables and the cash at bank account as £98. What is the journal entry to correct these errors?

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Q166: In relation to trade payables at the year end of 30 April 20X1 Jitka plc has discovered that:

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Q167: a contra of £85 with trade receivables is required; and

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Q168: an early settlement discount of £2 220 which was taken appropriately by a credit customer was credited to revenue and debited to trade payables. Jitka plc had not expected the customer to take the discount. Before these discoveries the balance on trade payables was £72 560. In its statement of financial position as at 30 April 20X1 Jitka plc will have a figure for trade payables of:

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Q169: Topping plc's initial trial balance for the year ended 31 October 20X9 has been prepared. It shows draft profit after tax of £58 147 and a credit balance on a suspense account of £738 in respect of accrued expenses. The bookkeeper was unsure of how to record the accrual and incorrectly debited £738 to prepayments and credited the suspense account. What is Topping plc's profit after tax when this error is corrected? Chapter 7: Cost of sales and inventories

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Q170: A business has opening inventory of £7 200 and closing inventory of £8 100. Purchases for the year were £76 500 delivery inwards was £50 and delivery outwards was £180. The figure for cost of sales is:

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Q171: Platoon plc is preparing its financial statements for the year ended 30 April 20X1 having extracted an initial trial balance. It had no opening inventory its purchases in the period were £686 880 and closing inventories were valued as £18 647 on 30 April 20X1. Which two of the following journal entries are required to record cost of sales and closing inventories at 30 April 20X1? F Dr Inventories £18 647; Cr Purchases £18 647

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Q172: Muse plc began trading on 1 January 20X8 and had zero inventories at that date. During 20X8 it made purchases of £455 000 incurred delivery inwards of £24 000 and delivery outwards of £29 000. Closing inventories at 31 December 20X8 were £52 000. In the statement of profit or loss for the year ended 31 December 20X8 the cost of sales figure is:

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Q173: Boomerang Co had 200 units in inventory at 30 November 20X1 valued at £800. During December it made the following purchases and sales. 2/12 Purchased 1 000 @ £5.00 each 5/12 Sold 700 @ £7.50 each 12/12 Purchased 800 @ £6.20 each 15/12 Purchased 300 @ £6.60 each 21/12 Sold 400 @ £8.00 each 28/12 Sold 500 @ £8.20 each Which of the following is the closing inventory amount using FIFO?

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Q174: The following information relates to Camberwell plc's year-end inventory of finished goods. Direct Expected costs of Production selling and materials overheads distribution Expected and labour incurred overheads selling price £ £ £ £ Inventories category 1 2 470 2 100 480 5 800 Inventories category 2 9 360 2 730 150 12 040 Inventories category 3 1 450 850 190 2 560

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Q175: 280 5 680 820 20 400 At what amount should finished goods inventory be stated in the company's statement of financial position?

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Q176: At its year end Crocodile plc has 6 000 items of product A and 2 000 of product B costing £10 and £5 respectively. The following information is available: Product A – 500 are defective and can only be sold at £8 each. Product B – 100 are to be sold for £4.50 each with selling expenses of £1.50 each. What figure should be shown in Crocodile plc's statement of financial position for inventory?

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Q177: Indicate whether the following statements are true or false. In a period of rising prices applying the FIFO method to determine the cost of inventories will give a lower gross profit figure than the AVCO method. Closing inventory is a debit in the statement of profit or loss.

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Q178: Your firm has calculated the cost of inventory using AVCO. At 1 June 20X8 there were 60 units in inventory at a cost of £12 each. On 8 June 40 units were purchased for £15 each and a further 50 units were purchased for £18 each on 14 June. On 21 June 75 units were sold for £20.00 each. The cost of closing inventory at 30 June 20X8 was:

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Q179: Morgan plc's direct production cost of each unit of inventory is £46. Production overheads are £15 per unit. Currently the goods can only be sold if they are modified at a cost of £17 per unit. The selling price of each modified unit is £80 and selling costs are estimated at 10% of selling price. At what amount should each unmodified unit of inventory be included in the statement of financial position?

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Q180: Indicate whether the following statements are true or false. Import duties are included in the cost of inventory.

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Q181: Which two of the following may be included when arriving at the cost of finished goods inventory for inclusion in the financial statements of a manufacturing company?

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Q182: Which of the following statements about inventory for the purposes of the statement of financial position is correct?

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Q183: A company's closing inventory at 31 January 20X3 amounted to £284 700. The following items were included at cost in the total:

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Q184: 400 coats which had cost £80 each and normally sold for £150 each. Owing to a defect in manufacture they were all sold after 31 January 20X3 at 50% of their normal price. Selling expenses amounted to 5% of the proceeds.

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Q185: 800 skirts which had cost £20 each. These too were found to be defective. Remedial work in February 20X3 cost £5 per skirt and selling expenses were £1 per skirt. They were sold for £28 each. What should be the inventory value after considering the above items?

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Q186: S plc sells three products – Basic Super and Luxury. The following information was available at the year end. Basic £ per unit Super £ per unit Luxury £ per unit Original cost 6 9 18 Estimated selling price 9 12 15 Selling and distribution costs to be incurred 1 4 5 Units of inventory Units

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Q187: Units

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Q188: Units 150 The value of inventory at the year end should be:

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Q189: A company uses the FIFO method to arrive at its inventory cost. At 1 May 20X2 the company had 700 engines in inventory valued at £190 each. During the year ended 30 April 20X3 the following transactions took place: 20X2

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Q190: July Purchased 500 engines at £220 each

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Q191: November Sold 400 engines for £160 000 20X3

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Q192: February Purchased 300 engines at £230 each

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Q193: April Sold 250 engines for £125 000 What is the cost of the company's closing inventory of engines at 30 April 20X3?

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Q194: An inventory record card shows the following details. February 1 50 units in inventory at a cost of £40 per unit

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Q195: 100 units purchased at a cost of £45 per unit

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Q196: 80 units sold

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Q197: 50 units purchased at a cost of £50 per unit

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Q198: 60 units sold What is the cost of inventory at 28 February using the FIFO method?

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Q199: For the year ended 31 October 20X3 a company did a physical count of inventory on 4 November 20X3 leading to an inventory cost at this date of £483 700. Between 1 November 20X3 and 4 November 20X3 the following transactions took place:

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Q200: Goods costing £38 400 were received from suppliers.

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Q201: Goods that had cost £14 800 were sold for £20 000.

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Q202: A customer returned in good condition some goods which had been sold to him in October for £600 and which had cost £400.

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Q203: The company returned goods that had cost £1 800 in October to the supplier and received a credit note for them. What figure should be shown in the company's financial statements at 31 October 20X3 for closing inventory based on this information?

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Q204: In preparing its financial statements for the current year a company's closing inventory was understated by £300 000. What will be the effect of this error if it remains uncorrected?

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Q205: At 30 September 20X3 the closing inventory of a company amounted to £386 400. The following items were included in this total at cost:

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Q206: 1 000 items which had cost £18 each. These items were all sold in October 20X3 for £15 each with selling expenses of £800.

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Q207: Five items which had been in inventory for many years and which had been purchased for £100 each sold in October 20X3 for £1 000 each net of selling expenses. What figure should appear in the company's statement of financial position at 30 September 20X3 for inventory?

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Q208: The cost of inventory in the financial statements of Quebec Ltd for the year ended

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Q209: December 20X4 of £836 200 was based on an inventory count on 4 January 20X5. Between 31 December 20X4 and 4 January 20X5 the following transactions took place: £ Purchases of goods 8 600 Sales of goods (profit margin 30% on sales) 14 000 Goods returned by Quebec Ltd to a supplier 700 What adjusted figure should be included in the financial statements for inventories at 31 December 20X4?

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Q210: The closing inventory of Epsilon amounted to £284 000 at cost at 30 September 20X1 the date of the statement of financial position. This total includes the following two inventory lines.

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Q211: 500 items which had cost £15 each and which were included at £7 500. These items were found to have been defective at the date of the statement of financial position. Remedial work after that date cost £1 800 and they were then sold shortly afterwards for £20 each. Selling expenses were £400.

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Q212: 100 items which had cost £10 each. After the date of the statement of financial position they were sold for £8 each with selling expenses of £150. The figure which should be shown in Epsilon's statement of financial position for inventory is:

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Q213: Lamp makes the following purchases in the year ending 31 December 20X9. Units £/unit Total (£)

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Q214: 21.01.X9 100 12.00 1 200

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Q215: 30.04.X9 300 12.50 3 750

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Q216: 31.07.X9 40 12.80 512

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Q217: 01.09.X9 60 13.00 780

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Q218: 11.11.X9 80 13.50 1 080 At the year end 200 units are in inventory but 8 are damaged and are only worth £10 per unit. These are identified as having been part of the 11.11.X9 delivery. Lamp operates a FIFO system for arriving at the cost of inventory. The figure for inventories at 31.12.X9 is:

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Q219: Bouncy Balls plc has 40 units of its special spongy balls in inventory as at 30 November 20X7. The product costs £5 per unit to manufacture and can be sold for £15 per unit. Half of the units in inventory at the year end have been damaged and will require rectification work costing £10 per unit before they can be sold. Selling costs are £1 per unit. The value of inventory at 30 November 20X7 is:

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Q220: The closing inventory of Stacks plc amounted to £58 200 excluding the following two inventory lines:

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Q221: 200 items which had cost £15 each. These items were found to be defective at the year-end date. Rectification work after that date amounted to £1 200 for the batch after which they were sold for £17.50 each with selling expenses totalling £300 for the batch.

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Q222: 400 items which had cost £2 each. All were sold after the year-end date for £1.50 each with selling expenses of £200 for the batch. Which figure should appear in the statement of financial position of Stacks plc for inventory?

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Q223: Fenton plc is a manufacturer of PCs. The company makes two different models the M1 and M2 and has 100 of each in inventory at the year end. Costs and related data for a unit of each model are as follows: M1 £ M2 £ Costs to date 230 350 Selling price 400 500 Modification costs to enable sale 110 – Delivery outwards 65 75 The figure for inventory that should appear in the statement of financial position at the year end is:

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Q224: When calculating the cost of inventory which of the following shows the correct method of arriving at cost? Include inward delivery costs Include production overheads

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Q225: A trader who fixes her selling prices by adding 50% to cost actually achieved a mark-up of 45%. Which of the following factors could account for the shortfall?

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Q226: Cornucopia plc has a standard mark-up of 25% on cost. During 20X9 its sales were £125 000 and its purchases were £80 000. Opening inventory was £35 000. The company did not carry out an inventory count at 31.12.X9 and has no records of an inventory figure at that date. Using the information above the closing inventory should be:

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Q227: The gross profit margin is 20% where:

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Q228: Which of the following factors could cause a company's gross profit margin to fall below the expected level?

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Q229: An extract from a business's statement of profit or loss is as follows: £ £ Revenue 115 200 Opening inventory 21 000 Purchases 80 000 Closing inventory (5 000) The mark-up achieved is: (96 000)

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Q230: 200

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Q231: Franz plc is a manufacturer. Its 12-month reporting period ends on 31 July and it adopts the average cost (AVCO) method of inventory usage and valuation. At 1 August 20X4 it held inventory of 2 400 units of the material Zobdo valued at £10 each. In the year to 31 July 20X5 there were the following inventory movements of Zobdo:

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Q232: November 20X4 Sales 900 units

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Q233: January 20X5 Purchase 1 200 units for £20 100

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Q234: May 20X5 Sales 1 800 units What was the cost of Franz plc's closing inventory of Zobdo at 31 July 20X5?

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Q235: For many years Wrigley plc has experienced rising prices for raw material X and has kept constant inventory levels. It has always used the AVCO method to arrive at the cost of inventory. If Wrigley plc had always used the FIFO method in each successive year's financial statements this would result in:

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Q236: During the year ended 31 March 20X4 Boogie plc suffered a major fire at its factory in which inventory that had cost £36 000 was destroyed. An insurance payment of 80% of the cost has been agreed but not received at the year end. To take account of these matters Boogie plc should debit trade and other receivables with £28 800 and: £36 000

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Q237: Percy plc started trading on 1 April 20X4. The cost of inventory shown in Percy plc's statement of financial position at 31 March 20X5 using the AVCO basis was £6 420. Had the FIFO basis been used the cost would have been £8 080. The effect of adopting the FIFO basis on Percy plc's financial statements for the year ended 31 March 20X5 would be to:

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Q238: Kane Ltd has completed its inventory count for the period ended 30 June 20X8. The inventory count concluded that there were inventories costing £32 340 of which £1 280 were found to be damaged and so had a net realisable value of nil. The journal entry to record closing inventories at 30 June 20X8 is: Chapter 8: Irrecoverable debts and allowance for receivables

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Q239: At 30 September 20X4 Mathieson plc's allowance for receivables was £19 500. At

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Q240: September 20X5 it was decided to write off irrecoverable debts totalling £6 000 and to decrease the allowance for the remaining receivables to £15 000. The charge or credit to the statement of profit or loss in respect of irrecoverable debts for the year ended 30 September 20X5 is:

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Q241: At 30 June 20X1 Cameron plc has decided to write off two debts of £1 300 and £2 150 respectively and to make an allowance of £6 631 against the remaining trade receivables balance. The balance on this allowance at 1 July 20X0 was £8 540. What is Cameron plc's irrecoverable debts expense for the year to 30 June 20X1?

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Q242: Enigma plc has reduced its allowance for receivables by £600. Indicate whether the following statements are true or false. This will increase gross profit by £600. This will increase net profit by £600.

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Q243: Disaster plc's trial balance shows trade receivables of £50 000. However no adjustment has been made for the following items.

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Q244: £3 250 from J Crisis & Sons who have gone into liquidation. The amount is considered irrecoverable.

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Q245: An increase in the allowance for receivables of £2 000.

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Q246: Cash received from P Chaos of £2 500 which had previously been written off. What is the revised trade receivables account balance after posting the above adjustments?

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Q247: At 28 February 20X4 a company's allowance for receivables was £38 000. At 28 February 20X5 it was decided to write off £28 500 of receivables and to increase the allowance for the remaining receivables to £42 000. The irrecoverable debts expense in the statement of profit or loss for the year ended 28 February 20X5 is:

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Q248: Arrow plc had a receivables balance of £7 050 at 31 December 20X0. During the year £500 was received in respect of a debt previously written off and an allowance for receivables of £495 was considered necessary. The allowance brought down as at 1 January 20X0 was £1 000. In respect of irrecoverable debts for the year ended 31 December 20X0 Arrow plc will:

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Q249: A review of the receivables ledger reveals that debts totalling £985 are considered irrecoverable and are to be written off. The allowance for receivables is to be increased by £100. What are double entries required to adjust the allowance for receivables and to write off the irrecoverable debts? To adjust the allowance for receivables To write off the irrecoverable debts DEBIT Irrecoverable debts expense £985 CREDIT Allowance for receivables £985 DEBIT Trade receivables £985 CREDIT Irrecoverable debts expense £985 CREDIT Allowance for receivables £100 DEBIT Allowance for receivables £985 CREDIT Irrecoverable debts expense £985 DEBIT Irrecoverable debts expense £985 CREDIT Trade receivables £985

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Q250: During 20X5 Bow plc received £500 from a customer in respect of a balance that had previously been written off and reduced its allowance for receivables to £100. The allowance brought down as at 1 January 20X5 was £1 000. At the year end the dishonour of a cheque received for £280 needs to be accounted for and the debt related to it needs to be written off. What is the irrecoverable debts debit or credit in the statement of profit or loss for the year ended 31 December 20X5?

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Q251: At 31 December 20X2 a company's receivables totalled £400 000 and an allowance for receivables of £50 000 had been brought forward from the year ended 31 December 20X1. It was decided to write off debts totalling £38 000 and to adjust the allowance for receivables to £36 200. What is the irrecoverable debts expense that should appear in the company's statement of profit or loss for the year ended 31 December 20X2?

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Q252: At 1 July 20X2 the receivables allowance of Quaint plc was £18 000. During the year ended 30 June 20X3 debts totaling £14 600 were written off. It was decided that the receivables allowance should be £16 000 as at 30 June 20X3. What amount should appear in Quaint plc's statement of profit or loss for irrecoverable debts expense for the year ended 30 June 20X3?

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Q253: At 1 May trade receivables were £31 475. During May sales of £125 000 were made on credit. Receipts from credit customers amounted to £122 500 and settlement discounts of £550 that were not expected to be taken at the date of invoice were taken by credit customers. Credit notes of £1 300 were issued to customers. The closing balance at 31 May on trade receivables was:

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Q254: Panther plc had an allowance for receivables at 1 July 20X1 of £450. Panther plc wants to write off a receivables balance of £800 as irrecoverable and increase the allowance for receivables to £2 965. As well as crediting trade receivables with £800 what other entries must be made to record the required adjustments in Panther plc's accounting records? Debit Credit

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Q255: The following trade receivables account has been prepared by an inexperienced bookkeeper and may contain errors of principle. TRADE RECEIVABLES 20X3 £ 20X3 £

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Q256: Jan Balance 284 680 31 Dec Cash at bank

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Q257: Dec Sales 194 040 179 790 Sales (discounts Contras with trade given to customers) 3 660 payables 800 Irrecoverable debts Balance 303 590 expense 1 800

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Q258: 180 484 180 An outstanding debt of £4 920 at 31 December 20X3 is to be written off. What is the correct figure for receivables that should appear on the statement of financial position at 31 December 20X3?

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Q259: At 30 June 20X4 a company's allowance for receivables was £39 000. At 30 June 20X5 trade receivables totalled £517 000. It was decided to write off debts totalling £37 000 and to adjust the allowance for receivables to £24 000. What figure should appear in the statement of profit or loss for irrecoverable debts expense for the year ended 30 June 20X5?

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Q260: At 1 January 20X5 a company had an allowance for receivables of £18 000. At 31 December 20X5 the company's trade receivables were £458 000. It was decided: (a) to write off debts totalling £28 000 as irrecoverable; and (b) to adjust the allowance for receivables to £21 500. What figure should appear in the company's statement of profit or loss for irrecoverable debts expense for the year ended 31 December 20X5?

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Q261: At 1 July 20X5 a company's allowance for receivables was £48 000. At 30 June 20X6 receivables amounted to £838 000. It was decided to write off £72 000 of these debts and adjust the allowance for receivables to £60 000. What are the final amounts for inclusion in the company's statement of financial position at 30 June 20X6? Receivables £ Allowance for receivables £ Net balance £

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Q262: The following issues arose while Atkins Ltd was preparing its financial statements for the year to 31 December 20X2.

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Q263: £350 was received in December 20X2 in respect of a debt which had been written off in the previous year. The receipt was correctly included in the cash at bank account but the computerised accounting system was unable to match this transaction and posted the other side of the entry to a suspense account.

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Q264: The directors determined that that the allowance for receivables should be reduced from £900 to £800 at the year end. What journal entries should Atkins Ltd make to account for the above issues?

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Q265: If Poppy plc reduces its allowance for receivables by £300 which of the following statements is correct?

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Q266: At 31 December 20X4 a company's trade receivables totalled £864 000 and the allowance for receivables was £48 000. It was decided that debts totalling £13 000 were to be written off and the allowance for receivables adjusted to £42 550. Which of the following journal entries would correctly record these adjustments? £18 450 DEBIT CREDIT Allowance for receivables Trade receivables £5 450 £13 000 £7 550 CREDIT Allowance for receivables £42 550 CREDIT Trade receivables £13 000

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Q267: A business has extracted its initial trial balance as at 31 December 20X7 as follows: Trial balance (extract) Trial balance £ £ Trade receivables 441 500 Allowance for receivables at 1 January 20X7 20 300 What is the net trade receivables balance to be presented in the statement of financial position at 31 December 20X7?

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Q268: At 1 January 20X1 Urb plc received £3 000 in full settlement of a debt that had previously been written off. At 31 December 20X1 Urb plc determined that a balance of £3 600 owed by a customer was irrecoverable and should be written off. Urb plc also decided to decrease its allowance for receivables from £2 200 to £1 500 on 31 December 20X1. Urb plc's statement of profit or loss for the year ended 31 December 20X1 will include an irrecoverable debts charge or credit of:

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Q269: At its year end of 28 February 20X6 Stope plc has in its accounting records a figure for trade receivables of £47 533 and an allowance for receivables of £500 at 28 February 20X5. One customer Invincible plc has experienced financial difficulties and has now gone into administration. Its balance of £10 380 at 28 February 20X6 is deemed to be irrecoverable and should be written off. The directors of Stope plc also wish to increase the allowance for receivables to £850. In its accounting records as at 28 February 20X6 Stope plc will have: £10 380 £10 730 £10 380 £10 730

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Q270: Moon plc's initial trial balance as at 31 October 20X1 has been extracted and shows the following: Trial balance (extract) Trial balance £ £ Allowance for receivables as at 1 November 20X0 6 546 Trade receivables 251 760 As at 31 October 20X1 Grundle's balance to Moon plc of £1 860 is irrecoverable. It is also decided that the allowance for receivables should be increased to £8 420. What amount should Moon plc include as its net trade receivables figure in the statement of financial position as at 31 October 20X1?

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Q271: Meridi plc has an allowance for receivables of £500 on 1 July 20X7. During the year to 30 June 20X8 the following events take place:

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Q272: A cheque for £92 was recorded and correctly banked but was returned unpaid on 29 June 20X8. No entries have yet been made for this return. The directors wish to write the debt off as irrecoverable.

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Q273: An allowance for receivables of £475 is required at the year end.

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Q274: A cheque received for £58 in respect of an amount written off in January 20X7 was recorded in the cash at bank account but the suspense account was used to record the other side of the transaction. What journal entries are required as at 30 June 20X8 to account for the above issues?

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Q275: At 1 January 20X5 Tandem plc had an allowance for receivables in its ledger accounts totalling £2 375. On 30 June 20X5 Basnet plc's liquidator informed Tandem plc that it would not make any further payments and therefore Basnet plc's outstanding debt of £200 should be written off. At 31 December 20X5 Ost plc paid £500 of an amount written off as irrecoverable in the previous year. Tandem plc's allowance for receivables needs to be increased by £800 at 31 December 20X5. What amount for irrecoverable debts expense should be included in Tandem plc's statement of profit or loss for the year ended 31 December 20X5? Chapter 9: Accruals and prepayments

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Q276: A business preparing its financial statements for the year to 31 October each year pays rent quarterly in advance on 1 January 1 April 1 July and 1 October each year. The annual rent was increased from £48 000 to £60 000 per year from 1 March 20X4. What figure should appear for rent in the statement of profit or loss for the year ended 31 October 20X4 and in the statement of financial position at that date? Statement of profit or loss Statement of financial position

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Q277: A business has received telephone bills as follows: Date received Amount of bill £ Date paid Quarter to 30 November 20X0 December 20X0 739.20 January 20X1 Quarter to 28 February 20X1 March 20X1 798.00 April 20X1 Quarter to 31 May 20X1 June 20X1 898.80 June 20X1 Quarter to 31 August 20X1 September 20X1 814.80 October 20X1 Quarter to 30 November 20X1 December 20X1 840.00 January 20X2 Quarter to 28 February 20X2 March 20X2 966.00 March 20X2 The telephone expense in the statement of profit or loss for the year ended 31 December 20X1 should be:

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Q278: A company receives rent from a large number of properties. The total cash received in the year ended 31 October 20X6 was £481 200. The following are the amounts of rent in advance and in arrears at 31 October 20X5 and 20X6.

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Q279: October 31 October 20X5 20X6 £ £ Rent received in advance 28 700 31 200 Rent in arrears (all subsequently received) 21 200 18 400 What amount of rental income should appear in the company's statement of profit or loss for the year ended 31 October 20X6?

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Q280: A rent prepayment of £960 was treated as an accrual in a sole trader's statement of profit or loss at the year end. As a result the profit was:

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Q281: In the year ended 31 December 20X4 B Ltd received cash of £318 600 from subscribers to its website. Details of subscriptions in advance and in arrears at the beginning and end of 20X4 are as follows:

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Q282: December 31 December 20X4 20X3 £ £ Subscriptions received in advance 28 400 24 600 Subscriptions owing 18 300 16 900 All subscriptions owing were subsequently received. What figure for subscriptions income should be included in the statement of profit or loss of B Ltd for 20X4?

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Q283: A company receives rent for subletting part of its office block. Rent receivable quarterly in advance is received as follows: Date of receipt Period covered £

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Q284: October 20X1 3 months to 31 December 20X1 7 500

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Q285: December 20X1 3 months to 31 March 20X2 7 500

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Q286: April 20X2 3 months to 30 June 20X2 9 000

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Q287: July 20X2 3 months to 30 September 20X2 9 000

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Q288: October 20X2 3 months to 31 December 20X2 9 000 What figures based on these receipts should appear in the company's financial statements for the year ended 30 November 20X2? Statement of profit or loss Statement of financial position

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Q289: During 20X4 Bibi paid a total of £60 000 for rent covering the period from 1 October 20X3 to 31 March 20X5. What figures should appear in the financial statements for the year ended 31 December 20X4? Statement of profit or loss Statement of financial position

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Q290: A company pays rent quarterly in arrears on 1 January 1 April 1 July and 1 October each year. The rent was increased from £90 000 per year to £120 000 per year as from

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Q291: October 20X2. What rent expense and accrual should be included in the company's financial statements for the year ended 31 January 20X3? Rent expense (SPL) Accrual (SFP)

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Q292: A company owns a number of properties which are rented to tenants. The following information is available for the year ended 30 June 20X6: Rent in advance £ Rent in arrears £

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Q293: June 20X5 134 600 4 800

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Q294: June 20X6 144 400 8 700 Cash received from tenants in the year ended 30 June 20X6 was £834 600. All rent in arrears was subsequently received. What figure should appear in the company's statement of profit or loss for rent receivable in the year ended 30 June 20X6?

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Q295: A company has sublet part of its offices and in the year ended 30 November 20X3 the rent receivable was: Until 30 June 20X3 £8 400 per year From 1 July 20X3 £12 000 per year Rent was received quarterly in advance on 1 January April July and October each year. What amounts should appear in the company's financial statements for the year ended 30 November 20X3? Statement of profit or loss Statement of financial position

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Q296: A business compiling its financial statements for the year to 31 July each year pays rent quarterly in advance on 1 January 1 April 1 July and 1 October each year. The annual rent was increased from £60 000 per year to £72 000 per year as from 1 October 20X3. What figure should appear for rent expense in the statement of profit or loss for the year ended 31 July 20X4?

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Q297: At 1 July 20X4 a company had prepaid insurance of £8 200. On 1 January 20X5 the company paid £38 000 for insurance for the year to 30 September 20X5. What figures should appear for insurance in the company's financial statements for the year ended 30 June 20X5? Statement of profit or loss Statement of financial position

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Q298: A company sublets part of its office accommodation. In the year ended 30 June 20X5 cash received from tenants was £83 700. Details of rent in arrears and in advance at the beginning and end of the year were: In arrears £ In advance £

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Q299: June 20X4 3 800 2 400

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Q300: June 20X5 4 700 3 000 All arrears of rent were subsequently received. What figure for rental income should be included in the company's statement of profit or loss for the year ended 30 June 20X5?

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Q301: Details of a company's insurance policy are shown below: Premium for year ended 31 March 20X6 paid April 20X5 £10 800 Premium for year ending 31 March 20X7 paid April 20X6 £12 000 What figures should be included in the company's financial statements for the year ended 30 June 20X6? Statement of profit or loss Statement of financial position

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Q302: An organisation's year end is 30 September. On 1 January 20X6 the organisation took out a loan of £100 000 with annual interest of 12%. The interest is payable in equal instalments on the first day of April July October and January in arrears. How much should be charged to the statement of profit or loss for the year ended 30 September 20X6 and how much should be accrued on the statement of financial position? Statement of profit or loss Statement of financial position

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Q303: A business sublets part of its office accommodation. The rent is received quarterly in advance on 1 January 1 April 1 July and 1 October. The annual rent has been £24 000 for some years but it was increased to £30 000 from

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Q304: July 20X5. What amounts for this rent should appear in the company's financial statements for the year ended 31 January 20X6? Statement of profit or loss Statement of financial position

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Q305: The electricity account for the year ended 30 June 20X1 was as follows. £ Opening balance for electricity accrued at 1 July 20X0 300 Payments made during the year

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Q306: August 20X0 for three months to 31 July 20X0 600

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Q307: November 20X0 for three months to 31 October 20X0 720

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Q308: February 20X1 for three months to 31 January 20X1 900

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Q309: June 20X1 for three months to 30 April 20X1 840 On 1 August 20X1 a payment of £840 was made for the three months ended 31 July 20X1. The charge for electricity in the statement of profit or loss for the year ended 30 June 20X1 is:

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Q310: The year end of Murphy plc is 30 November 20X1. The company pays for its gas by a standing order of £600 per month. On 1 December 20X0 the statement from the gas supplier showed that Murphy plc had overpaid by £200. Murphy plc received gas bills for the four quarters commencing on 1 December 20X0 and ending on 30 November 20X1 for £1 300 £1 400 £2 100 and £2 000 respectively. Calculate the correct charge for gas in Murphy plc's statement of profit or loss for the year ended 30 November 20X1.

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Q311: At 31 December 20X8 Blue Anchor plc has an insurance prepayment of £250. During 20X9 they pay £800 in respect of various insurance contracts. The closing accrual for insurance is £90. The statement of profit or loss charge for insurance for the year ended 31 December 20X9 is:

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Q312: At 31 March 20X7 accrued rent payable was £300. During the year ended 31 March 20X8 rent paid was £4 000 including an invoice for £1 200 for the quarter ended 30 April 20X8. What is the statement of profit or loss charge for rent payable for the year ended 31 March 20X8?

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Q313: Constains plc has an insurance prepayment of £320 at 31 March 20X2. During the year ended 31 March 20X2 Constains paid two insurance bills one for £1 300 and one for £520. The charge for the year in the accounts for insurance was £1 760. The prepayment at 31 March 20X1 was:

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Q314: The annual insurance premium for Boost Ltd for the period 1 July 20X6 to 30 June 20X7 is £13 200 which is 10% more than the previous year. Insurance premiums are paid on 1 July. The statement of profit or loss charge for insurance for the year ended 31 December 20X6 is:

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Q315: A gas accrual for £400 at the year end was treated as a prepayment in a business's statement of profit or loss. As a result the profit was:

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Q316: At 31 December 20X2 the following matters require inclusion in a company's financial statements:

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Q317: On 1 January 20X2 the company made a loan of £12 000 to an employee repayable on 30 April 20X3 charging interest at 2% per year. On the due date she repaid the loan and paid the whole of the interest due on the loan to that date.

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Q318: The company has paid insurance £9 000 in 20X2 covering the year ending 31 August 20X3.

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Q319: In January 20X3 the company received rent from a tenant £4 000 covering the six months to 31 December 20X2. For these items what total figures should be included in the company's statement of financial position at 31 December 20X2? Current assets Current liabilities

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Q320: On 1 April 20X6 a business paid £2 860 in local property tax for the year ending 31 March 20X7. This was an increase of 10% on the charge for the previous year. The correct charge for local property tax in the statement of profit or loss for the year ended 31 December 20X6 is:

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Q321: Whilst reviewing the trial balance for a business it was determined that an accrual for electricity was required for £300 and that there was a prepayment of insurance of £800. What four entries are required to adjust the initial trial balance? F Credit accruals £300 G Debit prepayments £800 H Credit prepayments £800

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Q322: A business has an accrual for electricity at 1 January 20X7 of £215 and has paid electricity bills of £3 420 during the year to 31 December 20X7. At 31 December 20X7 there is an accrual for electricity of £310. The electricity charge in the statement of profit or loss for the year ended 31 December 20X7 is:

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Q323: A business has paid £10 400 of insurance premiums during the year ended 31 March 20X7. At 1 April 20X6 there was an insurance prepayment of £800 and at 31 March 20X7 there was a prepayment of £920. The insurance charge in the statement of profit or loss for the year ended 31 March 20X7 is:

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Q324: Wright & Co's year end is 31 August 20X4. Telephone line rental of £120 was paid on 31 July for the two months from that date. This amount was included in the accounting records by debiting the telephone expense account and crediting the cash at bank account. Which two of the following entries of £60 should Wright & Co make at the year end in relation to this expense? F Credit the telephone charges account

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Q325: Bark plc has yet to account for sales commission of £1 755 owed to its employees for sales made during the year. Sales commission is included within distribution costs. Which two of the following entries of £1 755 should Bark plc make at the year end in respect of the sales commission? F Credit the accruals account

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Q326: Krim plc paid local property tax of £6 495 on 31 May 20X7 in respect of the three months ending 31 August 20X7. In the administrative expenses ledger account for the year ended 30 June 20X7 Krim plc must:

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Q327: Brindal plc acquired five apartments on 1 June 20X4 and immediately rented them out to different tenants. Brindal plc has a credit balance on its rent receivable account as at 31 May 20X5 of £22 850. It has yet to record rent in arrears for Apartment 1 as at 31 May 20X5 of £4 490 and rent in advance for Apartment 4 of £7 720 also at 31 May 20X5. What amount will appear for rent under other income in Brindal plc's statement of profit or loss for the year ended 31 May 20X5?

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Q328: Jeremiah plc is a newsagent business and is preparing its financial statements for the year ended 31 August 20X8. There are three outstanding matters that the company has not yet accounted for.

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Q329: A subscription of £240 for the year ending 31 January 20X9 paid and accounted for by Jeremiah plc on 1 July 20X8.

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Q330: Advance payments (deposits) of £75 recorded as received from customers in respect of magazines on order but not yet received at the year end.

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Q331: An unpaid property tax demand for the six months to 30 September 20X8 for £5 400. Which three of the following balances will appear in Jeremiah plc's statement of financial position as at 31 August 20X8? F Prepayment £140

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Q332: Minoto plc is preparing its financial statements as at 31 December 20X4. Its ledger account balance for rental income includes £9 870 rent received and included in cash at bank in 20X4 in respect of 20X3. Minoto plc should a journal with two entries of £9 870 as: F a credit entry to the accrued income (asset) account

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Q333: As at 30 November 20X4 Whitley plc had accrued distribution costs of £5 019 and prepaid distribution costs of £2 816. On 1 December 20X4 the bookkeeper processed the following opening journal: Credit Accruals £5 019 Debit Prepayments £2 816 Debit Distribution costs £2 203. During the year to 30 November 20X5 cash was paid in respect of distribution costs of £147 049 and was correctly posted to the distribution costs account. At the year end Whitley plc's bookkeeper correctly processed closing journals to set up an accrual of £4 423 and a prepayment of £3 324 in respect of distribution costs. Which of the following journals should Whitley plc process as at 30 November 20X5 to correct the three accounts?

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Q334: Bez plc draws up financial statements to 31 December in each year. It pays internet server charges for each year ending 30 April in two equal instalments on 1 May and 1 November in advance. It also pays telephone rental charges quarterly in arrears at the end of February April July and November. The total internet server charge for the year to 30 April 20X6 was £9 000. Telephone rental charges for the year commencing 1 July 20X5 were £7 440. What was the prepayment for internet server charges included in Bez plc's statement of financial position at 31 December 20X5? What was the accrual for telephone rental charges included in Bez plc's statement of financial position at 31 December 20X5? F £620

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Q335: Butters plc is finalising certain figures that will appear in its financial statements as at

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Q336: June 20X5. On 1 March 20X4 the company paid an annual fee to a trade association of £21 000 for the 12 months ended 28 February 20X5. A 12.5% increase in this subscription is expected but has not been finalised at 30 June 20X5. In its statement of financial position at 30 June 20X5 Butters plc will include:

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Q337: Details of a company's insurance policy are shown below: • Premium for year ending 31 March 20X7 paid April 20X6: £10 800 • Insurance costs are included within administrative expenses. What is the double entry to reverse the opening accrual or prepayment in the year ended 30 June 20X7?

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Q338: Alli Ltd owns a number of properties which are rented to tenants. Cash received from tenants in the year ended 30 June 20X6 was £834 600 which has been included as rental income in the year. The following information is available for the year ended 30 June 20X6: Rent Rent in advance in arrears £ £

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Q339: June 20X6 144 600 8 700 All rent in arrears was subsequently received. What is the journal entry to adjust Alli Ltd's rental income for the year ended 30 June 20X6? £144 600

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Q340: A company has occupied rented premises for some years paying an annual rent of £120 000. From 1 April 20X6 the rent was increased to £144 000 per year. Rent is paid quarterly in advance on 1 January 1 April 1 July and 1 October each year. What is the journal entry to transfer the balance on the rent expense account to the profit and loss ledger when preparing the financial statements for the year ended

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Q341: November 20X6?

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Q342: What is the journal entry for an accrual of rent expenses of £500?

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Q343: At 1 July 20X4 a company had prepaid insurance of £8 200. On 1 January 20X5 the company paid £38 000 for insurance for the year to 31 December 20X5. What is the journal entry to transfer the balance on the insurance expense account to the profit and loss ledger account for the year ended 30 June 20X5? Chapter 10: Non-current assets and depreciation

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Q344: Cataract plc purchases a machine for which the supplier's list price is £28 000. Cataract plc pays £23 000 in cash and trades in an old machine which has a carrying amount of £8 000. It is the company's policy to depreciate machines at the rate of 10% per annum on cost. What is the carrying amount of the machine after one year?

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Q345: Demolition plc purchases a machine for £15 000 on 1 January 20X1. After incurring transportation costs of £1 300 and spending £2 500 on installing the machine it breaks down and costs £600 to repair. Depreciation is charged at 10% per annum. At what carrying amount will the machine be shown in Demolition plc's statement of financial position at 31 December 20X1?

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Q346: A company buys a machine on 31 August 20X0 for £22 000. It has a useful life of seven years and a residual value of £1 000. On 30 June 20X4 the machine is sold for £9 000 cash which has been recorded correctly in the cash at bank account however a suspense account was opened to record the other side of the transaction. The company's accounting policy is to charge depreciation monthly using the straight-line method with depreciation charged in the month of purchase but not the month of disposal. What journal entry is required to correctly record the disposal of the machine and to remove the suspense account?

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Q347: Derek plc purchased a van on 1 October 20X0 for a total cost of £22 000 by paying £17 500 cash and trading in an old van. The old van had cost £20 000 and the related accumulated depreciation was £14 200. The loss on disposal of the old van in Derek plc's statement of profit or loss for the year ended 31 December 20X0 is:

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Q348: Vernon plc purchased some new equipment on 1 April 20X1 for £6 000. The scrap value of the new equipment in five years' time has been assessed as £300. Vernon charges depreciation monthly on the straight-line basis. What is the journal entry to record the depreciation charge for the equipment in Vernon plc's reporting period of 12 months to 30 September 20X1?

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Q349: A car has a list price of £23 500 but the garage gives Ride plc a 10% trade discount. In settlement the garage accepts payment of £18 000 together with an old company car. The amount to be capitalised by Ride plc for the new car is:

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Q350: A company purchased a car for £18 000 on 1 January 20X0. The car was traded in on 1 January 20X2. The new car has a list price of £30 000 and the garage offered a part-exchange allowance of £5 000. The company provides depreciation on cars using the reducing balance method at a rate of 25% per annum. What loss on disposal will be recognised in the statement of profit or loss for the year ended 31 December 20X2?

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Q351: What is the reasoning behind charging depreciation in historical cost accounting?

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Q352: Which of the following is excluded from the cost of a tangible non-current asset?

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Q353: Which of the following statements about intangible assets in public company financial statements are correct?

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Q354: Internally generated goodwill should not be capitalised.

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Q355: Purchased goodwill should normally be amortised through the statement of profit or loss.

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Q356: Development expenditure must be capitalised if certain conditions are met.

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Q357: Your firm bought a machine for £5 000 on 1 January 20X1 when it had a useful life of four years and a residual value of £1 000. Straight-line depreciation is to be applied on a monthly basis. On 31 December 20X3 the machine was sold for £1 600. The amount to be ed in the 20X3 statement of profit or loss for profit or loss on disposal is:

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Q358: An asset was purchased by Prance plc on 1 January 20X1 for: £ Cost 1 000 000 Annual licence fee 15 000 Total 1 015 000 The business adopts a date of 31 December as its reporting year end. The asset was traded in for a replacement asset on 1 January 20X4 at an agreed value of £500 000. It has been depreciated at 25% per annum on the reducing-balance method. What figure is included regarding this disposal in the statement of profit or loss for the year ended December 20X4?

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Q359: The asset register showed a total carrying amount of £67 460. A non-current asset costing £15 000 had been sold for £4 000 making a loss on disposal of £1 250. The balance on the asset register after accounting for the disposal is:

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Q360: On 1 January 20X5 a company purchased some plant. The invoice showed: £ Cost of plant 48 000 Delivery to factory 400 One year warranty covering breakdown during 20X5 800 49 200 Modifications costing £2 200 were necessary to enable the plant to be installed. What amount should be capitalised for the plant in the company's accounting records?

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Q361: A company's plant and machinery ledger account for the year ended 30 September 20X2 was as follows: PLANT AND MACHINERY £ £ 20X1 20X2

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Q362: Oct Balance 381 200 1 Jun Disposal account – cost of asset sold 36 000

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Q363: Dec Cash – addition at cost 18 000 30 Sep Balance 363 200

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Q364: 200 399 200 The company's policy is to charge depreciation at 20% per year on the straight-line basis. What is the journal entry to record the depreciation charge in the statement of profit or loss for the year ended 30 September 20X2?

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Q365: The carrying amount of a company's non-current assets was £200 000 at 1 August 20X0. During the year ended 31 July 20X1 the company sold non-current assets for £25 000 on which it made a loss of £5 000. The depreciation charge for the year was £20 000. The carrying amount of non-current assets at 31 July 20X1 is:

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Q366: A plant account is shown below: PLANT £ 20X2

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Q367: Jan Balance (plant purchased 20X0) 380 000 £ 20X2

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Q368: Oct Disposal account - cost of plant sold 30 000

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Q369: Apr Cash – plant purchased 51 000 31 Dec Balance 401 000

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Q370: 000 431 000 The company's policy is to charge depreciation on plant monthly at 20% per year on the straight-line basis. What should the company's plant depreciation charge be in the statement of profit or loss for the year ended 31 December 20X2?

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Q371: A company's policy for depreciation of its plant and machinery is to charge depreciation monthly at 20% per year on cost. The company's plant and machinery account for the year ended 30 September 20X4 is shown below: PLANT AND MACHINERY What should be the depreciation charge in the statement of profit or loss for plant and machinery (excluding any profit or loss on the disposal) for the year ended 30 September 20X4?

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Q372: Beta plc purchased some plant and equipment on 1 July 20X1 for £40 000. The scrap value of the plant at the end of its 10-year useful life is £4 000. Beta plc's policy is to charge depreciation monthly on the straight-line basis. The journal entry to record the depreciation charge on the plant in Beta's statement of profit or loss for the reporting period of 12 months ending 30 September 20X1 should be:

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Q373: Exe plc which has a year end of 31 December purchased a machine on 1 January 20X1 for £35 000. It was depreciated at 40% per annum on the reducing balance basis. On

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Q374: January 20X4 Exe plc part-exchanged this machine for a more advanced model. It paid £30 000 and realised a profit on disposal of £2 440. The price of the new machine was:

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Q375: Automat plc purchases a machine for which the supplier's list price is £18 000. Automat plc pays £13 000 in cash and trades in an old machine which has a carrying amount of £8 000. It is the company's policy to depreciate such machines monthly at the rate of 10% per annum on cost. The carrying amount of the new machine after one year is:

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Q376: Beehive plc bought a car on 1 January 20X7 for £10 000 and decided to depreciate it at 30% per annum on a reducing balance basis. It was disposed of on 1 January 20X9 for £6 000. The net effect on the statement of profit or loss for the year ended 31 December 20X9 is a credit of:

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Q377: Ben plc has a draft net profit for the year ended 31 December 20X8 of £56 780 before accounting for the depreciation on a new machine. Ben plc purchased the machine for £120 000 on 1 October 20X8. The useful life is four years with a residual value of £4 000. Ben plc uses the straight-line method for depreciation and charges depreciation on a monthly basis. The net profit after charging depreciation on the machine for the year ended 31 December 20X8 is:

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Q378: Sam plc's statement of profit or loss for the year ended 31 December 20X4 showed a profit for the year of £83 600. It was later found that £18 000 paid for the purchase of a van on

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Q379: January 20X4 had been debited to the motor expenses account. It is the company's policy to depreciate vans at 25% per year on the straight-line basis. What is the profit for the year after adjusting for this error?

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Q380: On 1 January 20X4 Joffa plc purchased a new machine at a cost of £96 720. Delivery costs were £3 660 and internal administration costs of £9 450 were incurred. At that time Joffa plc planned to replace the machine in five years when it would have no value and to depreciate the machine on a straight-line basis. Joffa plc decides on 1 January 20X6 that the machine only has one remaining year of useful life. There is no change to the residual value at the end of its life. How much depreciation will be charged in respect of this machine in Joffa plc's statement of profit or loss for the year ended 31 December 20X6?

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Q381: Stripes plc purchased new machinery on 1 August 20X4 for £38 000. The scrap value of the machinery at the end of its six-year useful life has been assessed as £2 000. Stripes plc's policy is to calculate depreciation monthly on the straight-line basis. The depreciation charge in Stripes plc's statement of profit or loss for year ended 31 March 20X5 should be:

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Q382: On 1 June 20X3 Spam plc purchased some plant at a price of £43 000. It cost £1 500 to transport the plant to Spam plc's premises and set it up plus £900 for a licence to operate it. The plant had a useful life of eight years and a residual value of £3 500. On 1 June 20X5 the directors of Spam plc decided to change the depreciation method to reducing balance at 40%. What is the carrying amount of Spam plc's machine in its statement of financial position at 31 May 20X6?

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Q383: On 1 April 20X5 Herepath plc bought a Foxy car for £23 500. The company's depreciation policy for cars is 30% per annum using the reducing balance method. On 1 April 20X7 the Foxy was part exchanged for a Vizgo car which had a purchase price of £28 200. Herepath plc made a payment to the seller for £19 350 in final settlement. What was Herepath plc's profit or loss on the disposal of the Foxy?

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Q384: Muncher plc includes profits and losses on disposal of non-current assets in administrative expenses in its statement of profit or loss. Depreciation is charged on fixtures and fittings at 20% using the reducing balance method. On 1 July 20X6 some fixtures that cost £4 000 on 1 July 20X3 were sold for £150. In the administrative expenses account Muncher plc must:

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Q385: Redruth plc began trading on 1 April 20X3. The carrying amount of plant and equipment in Redruth plc's financial statements as at 31 March 20X5 was £399 960. The cost of these assets was £614 500. On 31 March 20X6 an asset costing £11 500 was acquired. Depreciation is charged on plant and equipment monthly at an annual rate of 25% straight-line. There are no residual values. The carrying amount of Redruth plc's plant and equipment in its statement of financial position at 31 March 20X6 is:

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Q386: McClown plc has the following information in its financial statements relating to fixtures and fittings as at 31 December: 20X9 £ 20X8 £ Cost 600 000 480 000 Accumulated depreciation 180 000 218 000 Carrying amount 420 000 262 000 During the year to 31 December 20X9 the following transactions occurred in relation to fixtures and fittings: Additions £284 000 Sales proceeds from disposals £178 800 Depreciation charge £66 400 What is McClown plc's profit or loss on disposals of fixtures and fittings in the year ended 31 December 20X9?

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Q387: Morse plc has the following note to its statement of financial position relating to plant and machinery as at 31 May. 20X7 £ 20X6 £ Cost 110 000 92 000 Accumulated depreciation 72 000 51 000 Carrying amount 38 000 41 000 During the year to 31 May 20X7 the following transactions occurred in relation to plant and machinery: Additions £39 000 Loss on disposals £2 000 Depreciation charge £27 000 What were the proceeds from disposals of plant and machinery received by Morse plc in the year to 31 May 20X7?

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Q388: Anaconda plc acquired a machine on 31 March 20X4 its year end for £196 600. It made a bank transfer to the seller totalling £110 000 and traded in an old machine with a carrying amount at that date of £34 400. This machine had cost £60 000. A further sum of £42 000 was then due to the supplier of the machine as the final payment. The entry made in the accounting records in respect of this transaction was to debit the suspense account with £152 000 credit cash £110 000 and credit other payables £42 000. Which of the following journal entries is required to correctly reflect the purchase and disposal in Anaconda plc's accounting records?

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Q389: Gilbert plc acquired a new truck on 1 July 20X4 for £99 900 including VAT at 20%. The company depreciates all vehicles straight-line at 20% per annum on a monthly basis. What is the carrying amount of Gilbert plc's truck at 31 December 20X4?

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Q390: Crocker plc a retailer depreciates all vehicles monthly over five years. On 31 October 20X9 Crocker plc bought a car at a cost of £17 625 plus VAT trading in an old car that had cost £16 800 including VAT on 1 July 20X7. A payment of £13 500 was also made. VAT is at a rate of 20%. In respect of this disposal in its statement of profit or loss for the year ended 31 December 20X9 Crocker plc will show a loss of:

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Q391: Plummet plc is preparing its statement of profit or loss for the year ended 31 December 20X4. On the initial trial balance at that date administrative expenses have a debit balance of £684 000 before accounting for depreciation and profits/losses on disposal in respect of the company's computer equipment. At 31 December 20X3 Plummet plc had computer equipment that cost £1 004 408 all of which had been purchased on 1 January 20X2 and it had accumulated depreciation of £697 600. A computer system costing £6 800 was sold on 1 January 20X4 for £1 800. Computer equipment is depreciated monthly on a straight-line basis over four years. The amount to be disclosed as administrative expenses in Plummet plc's statement of profit or loss for the year ended 31 December 20X4 is:

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Q392: Dukakis plc had computer equipment with a carrying amount at 1 April 20X2 of £150 000. On that date it traded in a computer which had cost £24 000 on 1 April 20X0 for a new computer which cost £34 600 transferring £18 000 to the sellers bank account in full settlement of the purchase. Dukakis plc depreciates computers at 40% per annum on the reducing balance. What is the journal entry to record depreciation for the year ended 31 March 20X3 in respect of computers?

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Q393: The carrying amount of machinery has reduced by £10 000 following the disposal of one item of machinery. Which of the following statements relating to the disposal are correct?

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Q394: Yvette purchased some plant on 1 January 20X0 for £38 000. The payment for the plant was correctly ed in the cash at bank account but was incorrectly ed on the debit side of the plant repairs account. Yvette charges depreciation monthly on the straight-line basis over five years and assumes no scrap value at the end of the life of the asset. How will Yvette's profit for the year ended 31 March 20X0 be affected by the error?

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Q395: Asha Ltd a manufacturing company receives an invoice on 29 February 20X2 for work done on one of its machines. £25 500 of the cost is actually for a machine upgrade which will improve efficiency. The accounts department do not notice and charge the whole amount of the invoice to maintenance costs. Machinery is depreciated at 25% per annum on a straight-line basis with a proportional charge in the years of acquisition and disposal. By what amount will Asha Ltd's profit for the year to 30 June 20X2 be understated?

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Q396: Whipper has an machine which cost £40 000 and has a carrying amount of £32 000 on

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Q397: April 20X7. It is being depreciated at 20% per annum on the reducing balance basis. On 31 March 20X8 Whipper performed an impairment review and concluded that the carrying amount of the machine should be £22 400. What is the impairment loss in respect of the machine at 31 March 20X8?

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Q398: Dash has a property which cost £420 000 on 1 April 20X4. It is being depreciated on the straight-line basis over 20 years to its residual value of £40 000. On 31 March 20X9 Dash carried out an impairment review and has assessed that the carrying amount of the property should be £300 000. What is the impairment loss in respect of the property at 31 March 20X9? Chapter 11: Company financial statements

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Q399: A company's share capital consists of 20 000 25p equity shares all of which were issued at a premium of 20%. The market value of the shares is currently 70p each. What is the balance on the company's equity share capital account?

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Q400: Which of the following may appear as current liabilities in a company's statement of financial position?

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Q401: Loan due for repayment within one year

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Q402: Taxation

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Q403: Warranty provision

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Q404: At 30 June 20X5 Meredith plc had the following balances: £m Equity shares of £1 each 100 Share premium 80 During the year ended 30 June 20X6 the following transactions took place:

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Q405: September 20X5: A 1 for 2 bonus issue of equity shares using the share premium. 1 January 20X6: A 2 for 5 rights issue at £1.50 per share taken up fully paid. What are the balances on each account at 30 June 20X6? Share capital £m Share premium £m

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Q406: Klaxon plc made an issue of shares for cash of 1 000 000 50p shares at a premium of 30p per share. Which of the following journals correctly records the issue? £800 000 £300 000 £300 000 £1 300 000

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Q407: Sanders plc issued 50 000 equity shares of 25p each at a premium of 50p per share. The cash received was correctly recorded but the full amount was credited to the share capital account. Which of the following journals corrects this error?

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Q408: Which of the following journals correctly records a bonus issue of shares?

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Q409: At 31 December 20X1 the capital structure of a company was as follows: £

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Q410: 000 equity shares of 50p each 50 000 Share premium 180 000 During 20X2 the company made a 1 for 2 bonus issue using the share premium for the purpose and later issued for cash another 60 000 shares at 80p per share. What is the company's capital structure at 31 December 20X2? Equity share capital Share premium

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Q411: Evon plc issued 1 000 000 equity shares of 25p each at a price of £1.10 per share all received in cash. Which of the following journals records this issue? £850 000 £1 100 000

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Q412: In the year to 31 March 20X2 Kable had the following capital structure: £

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Q413: 000 equity shares of 25p each 50 000 Share premium 70 000 On 15 March Kable paid an equity dividend of 15p per share. What is the total dividend paid?

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Q414: Afua plc sells small electrical items such as kettles toasters and irons. It has a year end date of 31 December 20X7. On 28 December it accepted an order from a credit customer for 100 toasters at a price of £35 per toaster. On 30 December Afua plc dispatched 60 toasters to the customer but they were not received by the customer until 1 January 20X8. Afua plc remains responsible for the goods until they are delivered to the customer. The remaining 40 toasters were dispatched on 2 January 20X8 and received by the customer on 4 January 20X8. How much revenue should Afua plc recognise in respect of the toasters at 31 December 20X7?

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Q415: At 30 June 20X2 Brandon plc's capital structure was as follows: £

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Q416: 000 equity shares of 25p each 125 000 Share premium 100 000 In the year ended 30 June 20X3 the company made a 1 for 2 rights issue at £1 per share and this was taken up in full. Later in the year the company made a 1 for 5 bonus issue using the share premium for the purpose. What was the company's capital structure at 30 June 20X3? Equity share capital Share premium

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Q417: The retained earnings of Posti plc at 1 July 20X5 were £900 000. The retained earnings at 30 June 20X6 are £1 080 000. The profit for the year is £455 000. What was the total dividend paid during the year?

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Q418: At 1 July 20X4 Xando plc's capital structure was as follows: £ Share capital 1 000 000 shares of 50p each 500 000 Share premium 400 000 In the year ended 30 June 20X5 Xando plc made the following share issues:

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Q419: January 20X5:

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Q420: April 20X5: What will be the balances on the company's share capital and share premium at 30 June 20X5 as a result of these issues? Share capital Share premium

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Q421: A company has the following capital structure: £

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Q422: 000 shares of 25p 50 000 Share premium 75 000 It makes a 1 for 5 rights issue at £1.25 which is fully taken up by the shareholders. The balance on the share premium following the rights issue is:

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Q423: The equity section from the statement of financial position for Bowden Ltd as at 31 December 20X6 is as follows: Equity £'000 Share capital: equity shares of 50p each 5 000 Share premium 900 Retained earnings 6 300 Total equity 12 200 The company decides to make a 1 for 5 bonus issue of shares on 30 June 20X7. What will be the balances on the company's share capital and share premium at 30 June 20X7 as a result of these issues? Share capital Share premium

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Q424: At 1 April 20X8 the share capital and share premium of a company were as follows: £ Share capital – 300 000 equity shares of 25p each 75 000 Share premium 200 000 During the year ended 31 March 20X9 the following events took place:

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Q425: On 1 October 20X8 the company made a 1 for 5 rights issue at £1.20 per share.

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Q426: On 1 January 20X9 the company made a 1 for 3 bonus issue using the share premium to do so. The correct balance on the share capital account at 31 March 20X9 is:

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Q427: Layla plc is preparing its financial statements for the year ended 31 August 20X6. The initial trial balance shows the following balances: £ Prepayments at 1 September 20X5 1 012 Insurance expense 3 400 Of the prepayments at 1 September 20X5 £450 related to insurance. At 31 August 20X6 prepayments will include £515 related to insurance. In Layla plc's statement of profit or loss for the year ended 31 August 20X6 the insurance expense will be:

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Q428: The retained earnings of Zippy plc at 1 January 20X8 were £926 450. The retained earnings at 31 December 20X8 are £1 426 980. During the year Zippy plc paid a dividend of £312 000 and made a bonus issue of 500 000 25p ordinary shares from retained earnings. What is Zippy plc's profit for the year ended 31 December 20X8?

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Q429: Which of the following journal entries may be accepted as being correct according to their narratives? Debit Credit £ £ Purchases account 49 000 Buildings account 87 000 Labour and materials used in construction of extension to factory Directors' remuneration 70 000 Directors' bonuses transferred to their accounts Trade receivables 10 000 Correction of £10 000 received from credit customer recorded as cash sale Suspense account 2 000 Correction of misposting of discount received from supplier

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Q430: At 30 June 20X2 a company had £1 million 8% loan notes in issue interest being paid half-yearly on 30 June and 31 December. On 30 September 20X2 the company redeemed £250 000 of these loan notes at par paying interest due to that date. On 1 April 20X3 the company issued £500 000 7% loan notes at par interest payable half-yearly on 31 March and 30 September. What figure should appear in the company's statement of profit or loss for finance costs in the year ended 30 June 20X3?

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Q431: A company has a balance of £3 200 (debit) on its income tax payable account at

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Q432: December 20X7 relating to the income tax payable on the 20X6 profits. The company's estimated income tax liability for the year to 31 December 20X7 is £24 500. The income tax charge in the statement of profit or loss for the year ended 31 December 20X7 is:

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Q433: A company is preparing its financial statements for the year ending 31 March 20X7. The initial trial balance has the following figures relating to tax: £ Income tax payable at 1 April 20X6 14 300 Income tax paid during the year ended 31 March 20X7 12 700 The estimated income tax liability for the year ended 31 March 20X7 is £15 600. The figure for income tax in the company's statement of profit or loss will be:

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Q434: Which of the following accounting treatments derive from the accounting concept of accruals?

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Q435: Write down of a non-current asset which has suffered a fall in value

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Q436: Opening and closing inventory adjustments

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Q437: Capitalisation and amortisation of development expenditure

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Q438: Cheetah plc had a provision of £10 000 in its financial statements for the year ended

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Q439: March 20X3 in respect of a legal claim. In July 20X4 the claim was settled at a cost of £13 000. What is the expense in respect of the legal claim included in Cheetah plc's statement of profit or loss for the year ended 31 March 20X4?

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Q440: Camelia plc is preparing its financial statements for the year ended 30 June 20X9. Its initial trial balance shows the following balances: £ Accruals at 1 July 20X8 948 Distribution costs paid 130 647 Of the accruals at 1 July 20X8 £586 related to distribution costs. At 30 June 20X9 the equivalent figure is £654 for distribution costs. In Camelia plc's statement of profit or loss distribution costs will be:

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Q441: On 1 January 20X6 Pigeon plc has £300 000 of 50p equity shares in issue and a balance on share premium of £750 000. On 1 April 20X6 the company makes a 1 for 3 bonus issue. The balance on Pigeon plc's share premium at 31 December 20X6 is:

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Q442: At 1 July 20X7 Leak plc owed £524 925 to credit suppliers. In the year to 30 June 20X8 it paid credit suppliers £1 249 506 and posted £1 987 345 to trade payables in respect of goods purchased on credit. Leak plc took £12 824 in settlement discounts (which it had not expected to take) from credit suppliers. At the end of the period it processed a contra with trade receivables of £8 236. In its statement of financial position as at 30 June 20X8 Leak plc will have a figure for trade payables of:

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Q443: Sham plc's statement of profit or loss for the year to 31 January 20X7 shows income tax of £42 560. In its statement of financial position at that date income tax payable is £23 820. During the year Sham plc paid HMRC £40 000 in respect of income tax for the year ended 31 January 20X6 but subsequently received a refund from HMRC for £2 680. At 31 January 20X6 Sham plc's income tax payable balance in its statement of financial position was:

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Q444: Monksford plc is preparing its financial statements for the year ended 31 December 20X1. Its initial trial balance shows the following balances: £ Income tax payable at 1 January 20X1 2 091 20X0 income tax paid in 20X1 (as finally agreed with HMRC) 1 762 The estimated income tax due for the year ended 31 December 20X1 is £2 584. In Monksford plc's statement of profit or loss for the year ended 31 December 20X1 the figure for income tax expense will be:

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Q445: Zenia plc is preparing its financial statements for the 12 month reporting period ended

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Q446: August 20X6 having prepared an initial trial balance which includes the following balances: £ Accruals at 1 September 20X5 948 Interest paid 2 733 Of the accruals at 1 September 20X5 £362 related to interest payable. At 31 August 20X6 accruals will include £419 related to interest payable. In Zenia plc's statement of profit or loss for the 12 month reporting period ended 31 August 20X6 the finance costs will be:

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Q447: Wonka plc has the following ledger account balances as at 1 September 20X5: Share capital (£0.50 equity shares) £200 000 Share premium £20 000 Retained earnings £793 442 On 1 November 20X5 Wonka plc made a 1 for 4 rights issue at £4.50 per share. On

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Q448: August 20X6 it made a 2 for 1 bonus issue. Profit for the year to 31 August 20X6 was £100 000. What are the balances on the three ledger accounts as at 31 August 20X6?

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Q449: Grease plc is a large company with a share capital of 3 million 20p equity shares. To raise funds it has made a 1 for 4 rights issue of its equity shares at £3.60 per share. The rights issue was fully taken up but only £1.9 million had been paid up at the year end

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Q450: September 20X2. Grease plc correctly debited cash at bank with £1.9 million and recorded the other side of the transaction in the suspense account. Which adjustment should Grease plc make to correctly record the rights issue? £750 000 Credit Share premium £1 950 000 £150 000 Credit Share premium £2 550 000

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Q451: Lake plc makes purchases on credit for £9 801 and purchases for cash of £107 in the year ended 31 January 20X4. The company's purchases accruals need to be £75 less than at the previous year end and prepayments need to be £60 less. What is the figure for purchases included in cost of sales in Lake plc's statement of profit or loss for the year ended 31 January 20X4?

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Q452: Wombat plc is a retailer that owns no properties and only has fixtures and fittings purchased within the last six months as non-current assets. The company has been experiencing trading problems for some time. The directors have concluded that the company is no longer a going concern and have changed the basis of preparing the financial statements to the break-up basis. Which two of the following will be the immediate effects of changing to the break-up basis?

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Q453: Drange plc has share capital of 300 000 £1 shares at 1 March 20X7. These were issued at £1.50 per share. On 28 February 20X8 Drange plc made a 2 for 3 bonus issue. Before accounting for this the balance on retained earnings at 28 February 20X8 was £717 000. In its statement of financial position at 28 February 20X8 the balance on Drange plc's retained earnings will be:

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Q454: The trial balance of Albion plc a manufacturer as at the year end 30 April 20X4 included the following items:

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Q455: Depreciation of delivery vehicles

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Q456: Delivery inwards In the statement of profit or loss depreciation of delivery vehicles should be included in the heading: In the statement of profit or loss delivery inwards from suppliers should be included in the heading: F Distribution costs

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Q457: Rembrandt plc is finalising certain figures that will appear in its financial statements as at 30 September 20X7. In its initial trial balance at that date Rembrandt plc has a figure for income tax payable as at 1 October 20X6 of £114 520. The total income tax charge in the statement of profit or loss for the year to 30 September 20X7 is £145 670 and income tax paid in the year was £123 090. The income tax payable balance that will appear in Rembrandt plc's statement of financial position as at 30 September 20X7 is:

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Q458: Touch plc is finalising certain figures that will appear in its financial statements as at 30 April 20X7. Relevant initial trial balance figures are as follows: £ Trade and other payables (excluding interest payable) 246 800 6% debentures as at 1 May 20X6 400 000 Touch plc issued 6% debentures of £120 000 at par on 1 February 20X7 repayable at par in 10 years' time. No interest was outstanding at 1 May 20X6 and the company paid interest in respect of debentures of £24 000 in the period to 30 April 20X7. The trade and other payables figure (including interest payable) that will appear in Touch plc's statement of financial position as at 30 April 20X7 is:

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Q459: As at 1 June 20X4 Brazil plc had 400 000 10p equity shares which it issued in 20X1 at £2.20 each fully paid. It also had 200 000 £1 8% irredeemable preference shares issued at par in 20X2. On 31 January 20X5 Brazil plc made a further issue of 45 000 of the £1 irredeemable 8% preference shares at £1.50 fully paid. On the same date Brazil plc made a 1 for 4 bonus issue of equity shares. Brazil plc wishes to use the share premium in respect of the bonus issue. In its statement of financial position as at 31 May 20X5 Brazil plc will have share premium of:

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Q460: Which two of the following are values that a regulator concerned with restoring trust in financial information will seek to promote?

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Q461: The retained earnings of Camel plc at 1 January 20X7 were £1 055 000. The retained earnings at 31 December 20X7 are £1 210 000. The profit for the year is £387 000. During the year Camel made a 1 for 2 bonus issue with £65 000 paid from retained earnings. What was the total dividend paid during the year?

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Q462: At 30 June Temso plc's equity was as follows: 20X8 20X9 £ £ Equity shares of 25p each 100 000 125 000 Share premium 100 000 75 000 Retained earnings 267 000 299 000 In the year ended 30 June 20X9 Temso plc made a 1 for 4 bonus issue. Profits for the year were £44 000. What was the total dividend paid in the year?

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Q463: At 30 September 20X6 Bake plc's equity was as follows: Equity shares of 50p each £

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Q464: 000 Share premium 80 000 Retained earnings 676 000 In the year ended 30 September 20X7 Bake plc made a 1 for 3 bonus issue which was partly paid out of share premium. Retained earnings were £754 000 at 30 September 20X7 after Bake made a profit of £213 000. What was the total dividend paid in the year ended 30 September 20X7?

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Q465: Panther Co sells goods with a one year warranty and had a provision for warranty claims of £64 000 at 31 December 20X0. During the year ended 31 December 20X1 £25 000 in claims were paid to customers. On 31 December 20X1 Panther Co estimated that 5% of warranties would be invoked at a cost of £58 000. What amount should Panther Co charge or credit to the statement of profit or loss for the year ended 31 December 20X1 in respect of the warranty provision? Ordinary share capital 3 000 000 1 800 000 Share premium account 1 050 000 850 000 Retained earnings 142 500 74 500

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Q466: 192 500 2 724 500 Non-current liabilities Loan 556 000 472 000 Preference shares (redeemable) 150 000 0 Current liabilities Trade payables 348 500 289 600 Income tax payable 300 000 350 000

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Q467: 500 639 600 Total equity and liabilities 5 547 000 3 836 100 The following additional information is relevant.

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Q468: During the year Siena plc made a 1 for 10 bonus issue of its ordinary shares. It subsequently issued further shares at the market price.

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Q469: An impairment review at 31 March 20X5 identified a fall in the recoverable amount of certain non current investments. As a result an impairment loss of £12 000 was identified and written off to administrative expenses.

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Q470: During the year Siena plc acquired plant and equipment for cash of £2 057 000. In addition plant and equipment with a fair value of £600 000 was acquired through a long term loan. The depreciation charge for the year charged to cost of sales was £750 600. A loss on sale of plant of £55 000 was made during the year.

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Q471: Interest payable of £10 000 has been included in trade payables at year end. The corresponding figure in 20X4 was £5 000.

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Q472: The government bonds are highly liquid and management has decided to class them as cash equivalents.

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Q473: Siena plc issued £150 000 redeemable preference shares during the year.

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Q474: Included in trade payables is £10 000 in relation to the acquisition of long term investments. Requirements Prepare a statement of cash flows for Siena plc the year ended 31 March 20X5 in accordance with IAS 7. £ Cash flows from operating activities Profit before tax Investment income Finance costs Depreciation Impairment Gain/loss on sale of property plant and equipment Movement in inventories Movement in trade receivables Movement in trade payables Cash generated from operations Tax paid Interest paid Net cash from/used in operating activities Cash flows from investing activities Purchase of property plant and equipment Purchase of intangible assets Purchase of investments Proceeds from sale of property plant and equipment Proceeds from sale of intangibles Interest received Net cash from/used in investing activities Cash flows from financing activities Proceeds from issue of shares Movement in borrowings Dividends paid Net cash from/used in financing activities Net increase/decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

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Q475: Part of the process of preparing a cash flow statement is the calculation of net cash flows from operating activities. Which of the following statements about that calculation using the indirect method are correct?

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Q476: Loss on sale of non-current assets should be deducted from profit before tax.

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Q477: Increase in inventories should be deducted from profit before tax.

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Q478: Increase in trade payables should be added to profit before tax.

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Q479: Depreciation charges should be added to profit before tax.

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Q480: In the course of preparing a statement of cash flows the following figures are to be included in the calculation of net cash flows from operating activities. £ Depreciation charges 980 000 Profit on sale of non-current assets 40 000 Increase in inventories 130 000 Decrease in trade receivables 100 000 Increase in trade payables 80 000 What will the net effect of these items be in the statement of cash flows? £

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Q481: Part of a draft statement of cash flows is shown below: £'000 Profit before tax 8 640 Depreciation charges (2 160) Proceeds of sale of non-current assets 360 Increase in inventories (330) Increase in trade payables 440 The following criticisms of the above extract have been made:

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Q482: Depreciation charges should have been added not deducted.

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Q483: Increase in inventories should have been added not deducted.

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Q484: Increase in trade payables should have been deducted not added.

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Q485: Proceeds of sale of non-current assets should not appear in this part of the statement of cash flows. Which of these criticisms are valid?

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Q486: Which of the following assertions about statements of cash flows is/are correct?

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Q487: A statement of cash flows prepared using the direct method produces a different figure for net cash flows generated from operations compared to that produced when the indirect method is used.

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Q488: Rights issues of shares do not feature in statements of cash flows.

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Q489: A bonus issue of shares will not appear as an item in a statement of cash flows.

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Q490: A profit on the sale of a non-current asset will appear as an item under Cash Flows from Investing Activities in a statement of cash flows.

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Q491: An extract from a statement of cash flows prepared by a trainee accountant is shown below. Cash flows from operating activities £m Profit before tax 28 Depreciation (9) Decrease in inventories 13 Increase in trade receivables (4) Increase in trade payables (8) Cash generated from operations Which of the following criticisms of this extract are correct? 20

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Q492: Depreciation charges should have been added not deducted.

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Q493: Decrease in inventories should have been deducted not added.

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Q494: Increase in trade receivables should have been added not deducted.

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Q495: Increase in trade payables should have been added not deducted.

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Q496: Bailey disposes of an asset with a carrying amount of £21 000 for £30 000 on 7 July 20X1. How will this transaction be shown in cash flows from operating activities? Cash flows from operating activities £

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Q497: An extract from the statement of financial position for Highmead has the following balances: 20X5 20X4 £ £ £ £ Current liabilities Income tax payable 150 000 10 000 The tax expense in the statement of profit or loss for the year ended 20X5 was £160 000 and £150 000 in the year ended 20X4. What is the amount of tax that Highmead paid or received in the year ended 20X5?

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Q498: The following extracts are taken from the financial statements of Radio for the years ended 31 March 20X4 and 20X5: Statement of financial position extract: 20X5 £ 20X4 £ Inventories 310 600 363 700 Trade receivables 312 000 299 500 Trade payables 277 200 269 400 Statement of profit or loss extract: 20X5 £ Profit from operations 797 200 Finance charge (15 000) Profit before tax 782 200 Income tax (219 000) Profit for the period 563 200 What is the cash generated from operations to be included in the statement of cash flows for the year ended 31 March 20X5? Chapter 14: Company financial statements under UK GAAP

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Q499: What does GAAP stand for?

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Q500: In the UK which of the following are responsible for the preparation of company annual financial statements?

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Q501: Indicate whether the following statements are true or false. Creditors falling due after more than one year are equivalent to current liabilities. Non-current assets are equivalent to fixed assets.

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Q502: Teacup Ltd uses the first-in first-out (FIFO) method to value its stocks of finished goods. At 1 January there were stocks of 25 units that had cost £54 each. During January the following transactions occurred:

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Q503: January 10 units were sold for £62 each

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Q504: January 10 units were purchased for £55 each 22 January 10 units were sold for £62 each What was the value of Teacup Ltd's closing stock at 31 January?

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Q505: Diamond Ltd issues 250 000 equity shares with a nominal value of £2 each at a price of £3.55 each for cash. Which of the following sets of entries would be made to record this transaction?

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Q506: The following balances have been extracted from Saracen Ltd's trial balance at 31 December 20X8: Debit £ Credit £ Retained profits at 1 January 20X8 4 695 600 10% debentures issued in 20X5 1 300 000 Debenture interest paid 65 000 Operating profit for the year ended 31 December 20X8 is £520 000. Corporation tax for the year has been estimated at £156 000. What is the figure for retained profits in Saracen Ltd's balance sheet as at the year end 31 December 20X8?

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Q507: Which of the following transactions are not recorded in a company's cash at bank account?

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Q508: At the end of its first year of trading on 30 June 20X1 Waddy Ltd's net assets are £207 594. It has share capital of £50 000 made up of 25p equity shares issued at 40p each and a retained profits reserve of £107 594. In relation to Waddy Ltd's balance sheet at 30 June 20X1 which of the following statements could be true? Chapter 15: Sole trader and partnership financial statements under UK GAAP

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Q509: Alice and Betty are in partnership sharing profits and losses in the ratio 2:1. Their year end is 30 June. On 1 January 20X4 Cath joined the partnership and the new profit sharing ratio became Alice 50% Betty 30% and Cath 20%. The profit for the year ended 30 June 20X4 was £520 000 after charging an expense of £40 000 which related to the first six months of the year. The remainder of the profit accrued evenly over the year. What is Betty's total profit share for the year ended 30 June 20X4? The following information is relevant for questions 2 and 3 Lisa Mary and Olga are in partnership sharing profits and losses in the ratio 30% 30% 40%. Their agreement states that Olga and Lisa are to receive annual salaries of £20 000 and £35 000 respectively. Interest credited on capital is 5% and interest charged on drawings is 10%. The following information is relevant. £ Capital accounts at 31.12.X5 Lisa 500 000 Mary 400 000 Olga 300 000 Current accounts at 31.12.X4 Lisa 300 000 Mary 150 000 Olga 400 000 Drawings on 31.12.X5 Lisa

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Q510: 000 Mary 35 000 Olga 40 000 Assume that drawings were made on the first day of the year for the purposes of calculating interest. Net profit for the year ended 31.12.X5 was £1 350 000.

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Q511: What is Olga's total share of the profit for the year ended 31.12.X5?

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Q512: What is the closing balance on Mary's current account at 31.12.X5?

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Q513: Declan and Indiah are in partnership sharing profits 3:2. On 1 July 20X4 Calum joins the partnership. Under the new partnership agreement profits will be shared by Declan Indiah and Calum 5:3:2 respectively with the following annual salaries. Indiah £40 000 pa Calum £48 000 pa Profit accrues evenly over the year. The partnership profit at 31 December 20X4 was £450 000. At 31 December 20X4 how should the profits be allocated? Declan Indiah Calum

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Q514: Billy and Charlie are in partnership together sharing profits equally. They invested £20 000 and £30 000 respectively in the business although Billy later made a loan of £5 000 to the business. The loan is outstanding throughout the year to 31 March 20X6. Interest is charged on capital and loans at 5% pa and is credited to current accounts. The balances on the partners' current accounts at 1 April 20X5 were £15 500 for Billy and £12 700 for Charlie. The partnership made a profit of £32 000 for the year ending 31 March 20X6 before accruing for any interest. What is the balance on the partners' current accounts at 31 March 20X6? Billy Charlie

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Q515: Curtis and Sillett are in partnership sharing profits 3:2 and preparing their accounts to 30 June each year. On 1 January 20X6 McAllister joined the partnership and from that date the profit sharing ratio became Curtis 50% Sillett 25% and McAllister 25% after providing for salaries for Sillett and McAllister of £20 000 and £12 000 pa respectively. The partnership profit for the year ended 30 June 20X6 was £480 000 accruing evenly over the year. What are the partners' total profit shares for the year ended 30 June 20X6? Curtis Sillett McAllister

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Q516: A partner's private petrol bills have been treated as part of the partnership's motor vehicle expenses. Which of the following journals corrects the error?

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Q517: How should interest charged on partners' drawings be dealt with in partnership financial statements?

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Q518: Which of the following journals records interest earned on partners' capital account balances?

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Q519: P and Q are in partnership sharing profits in the ratio 2:1. On 1 July 20X4 they admitted P's son R as a partner. P guaranteed that R's profit share would not be less than £25 000 for the six months to 31 December 20X4. The profit sharing arrangements after R's admission were P 50% Q 30% R 20%. The profit for the year ended 31 December 20X4 is £240 000 accruing evenly over the year. What should P's final profit share be for the year ended 31 December 20X4?

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Q520: What journal is necessary to record interest payable on partners' drawings?

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