Nov 2011 Paper 31 1 2 3 C B D $61 040 + 12 200 2 800 2 200 + 1 350 = $69 590 Answer can be selected by looking

ng at investing activities only. The disposal of non-current assets is a cash inflow of $250 000 therefore B must be answer. 300/4 = 75 000 shares for the bonus issue 375 / 5 = 75 000 for the rights issue Therefore Ordinary Share Capital now $450 000 Converting the loan stock to ordinary shares will increase Ordinary share capital to $1400 therefore capital + reserves will be 1400 140 = 1260 Shares will have a balance sheet value of 1260/1400 = 0.90c The purchasing company would debit $700 for tangible assets + $100 for goodwill. N0 change to liabilities The partnership loan will be replaced by a debenture of 8/10 X 100 000 = $80 000 Therefore balance is issued capital =$ 920 000 / 800 000 shares = 1.15 per share Therefore ordinary capital of $800 000 and premium of $120 000 Consideration is to be 32 + 100 + 60 12 = 180 000 / 1.20 per share = 150 000 shares Trade and other payables + overdraft = 4500 + 3 600 + 19 500 = 27 600 Only dividends paid in the year are reported in the statements. Revaluation increases assets therefore ROCE falls. Loans as a percentage of assets (gearing) also falls Working capital cycle = Debtors TO + Inventory TO Payable TO therefore in 2009 Working capital cycle = 45 + 60 35 = 70 days Working capital cycle 2010 = 50 + 70 40 = 80 days Increased 10 days EPS = Profit attributable to shareholders / number of shares 10 2 (minus taxes too but not given) / 20 = 40 cents per share P/E = market price of share / EPS = 5 / 0.40 = 12.5 Current ratio = CA:CL. If minimum it can be is 2:1 and the lowest CA will be is $60 000 then the maximum CL can be is $30 000 If the maximum trade payables is expected is $17 000 then Overdraft maximum is (30 17) = $13 000 First look for higher of fair value/value in use - $4m Carrying amount (cost depn) = $5m which is higher than the above Therefore asset has been impaired by $1m Goodwill is the difference between purchase price and fair value of assets (467 387) = $80 000 A firm can pay dividends from any revenue reserve therefore General (80) + retained earnings (40) are available for dividends = $120/500 = 24 cents per share maximum marginal cost of one more unit = labour + materials = $500 (no additional fixed costs are incurred) To buy the component would cost $600. Overhead absorption rate = budgeted cost / budgeted hours = 104 / 8 = $13 per dlh Overheads absorbed = actual hours x rate = 7500 X $13 =$ 97 500 Actual overheads = absorbed + under (-)(over) absorbed overheads = 97.5 + 15 = Current fixed costs = 2000 units x $80 per unit = $160 000 Therefore expected fixed costs = 160 X 1.1 = $176 000 New contribution will be $315 150 = $165 per unit To make a profit of $140 000 must sell (176 +140)/165 = 1 916 units

5 6

D A

7 8 9 10 11 12

A B C C A B

13

14

15

16 17 18 19 20

A B D B C

21

22 23 24 25

D D D C

6000 is budgeted output after allowing for normal loss of 10% Therefore total usage = 6 000 / 0.9 = 6 667 litres. Price adverse indicates higher quality materials. Higher quality materials lead to less breakage/wastage Less time spent re-doing work where materials have broken

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27 28 29

C B C

30

Labour rate variance AH X SR = (1100 X 13) X $8 = $114 400 AH X AR = 121 550 (given) Variance = Standard (114 400) Actual (121 550) = (7 150) adverse Standard production level = 200 000 hrs / 5 hrs per unit = 40 000 units $600 000 / 40 000 units = $15 per unit Standard cost of materials = AQ X SP = 4 350 x 9 = $39 150 Actual cost of materials = Standard cost + (-) adverse (favourable) variance = 39 150 435 = 38 715 ARR = Ave profit / ave investment therefore 1 must be true and 2 must be false. No discounting is done for ARR so 3 must be false 4 could be true 50/300 = 16.7% 30/200 = 15% 55/400 = 13.75