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54
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ACCOUNTING-ORDINARY LEVEL
(400 marks)
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This section has 4 questions (Numbers 1- 4). The first question carries 120 marks and the remaining three
questions carry 60 marks each.
Candidates should answer either QUESTION 1 only OR else attempt any TWO of the remaining three
questions in this section.
This section has three questions (Numbers 5-7). Each question carries 100 marks.
Candidates should answer any TWO questions.
This section has two questions (Numbers 8 and 9). Each question carries 80 marks.
Candidates should answer ONE of these questions.
Calculators
Calculators may be used in answering the questions on this paper: however, it is very
important that workings are shown in the answer-book(s) so that full credit can be given
for correct work.
Page 1 of 8 OVER →
SECTION 1 (120 Marks)
Answer Question 1 OR any TWO other questions
The following balances were extracted from the books of Tallon Ltd., on 31/12/2001
Share Capital € €
Authorised - 800,000 Ordinary Shares at €1 each
Issued - 550,000 Ordinary Shares at €1 each ......................... 550,000
Plant and Machinery (Cost 170,000)..................................................... 120,000
Delivery Vans (Cost 24,000).................................................................. 18,000
Factory Buildings ................................................................................... 470,000
Patents .................................................................................................... 60,000
Debtors and Creditors ............................................................................ 36,800 44,000
10% Debentures (issued on 1/4/2001) ................................................... 80,000
Stocks 1/1/2001
Raw Materials ........................................................................................ 35,000
Work in Progress.................................................................................... 27,000
Finished Goods....................................................................................... 42,000
Purchases of Raw Materials ................................................................... 430,000
Sales ....................................................................................................... 642,000
Factory Wages........................................................................................ 70,000
Direct Expenses...................................................................................... 10,000
Returns in ............................................................................................... 2,000
Stationery ............................................................................................... 1,600
Provision for Bad Debts ......................................................................... 1,500
Sale of Scrap Materials .......................................................................... 6,000
Directors Fees......................................................................................... 30,000
Advertising Expenses............................................................................. 8,800
Factory Insurance ................................................................................... 6,600
Factory Light and Heat........................................................................... 9,500
Profit and Loss Balance (1/1/2001)........................................................ 21,000
VAT ....................................................................................................... 5,100
Bank ....................................................................................................... ________ 27,700
1,377,300 1,377,300
You are given the following additional information:
Set out below are the Bank Account and Bank Statement of Marie Thompson for the month of April 2002.
Bank Account
€ €
April 1 Balance b/d 1,120 April 5 P Jones 567891 690
April 9 Sales Lodged 1,220 April 7 Rent 567892 300
April 16 Lodgement 1,600 April 10 M. Walsh 567893 280
April 29 Sales Lodged 1,750 April 12 J Grady 567894 220
April 13 P Hughes 567895 512
April 14 Insurance 567896 1,260
April 18 J. Molloy 567897 140
_____ April 30 Balance b/d 2,288
€5,690 €5,690
Note: The €160 entered in the Bank Statement on April 26 was debited in error to Marie Thompson’s
account instead of to Mick Thompson’s account.
(a) To show Marie Thompson’s Adjusted Bank Account and to bring down the adjusted balance. (35)
(b) To prepare a statement on 30/4/2002 reconciling the adjusted Bank Account Balance with the Bank
Statement balance. (25)
(60 marks)
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3. Incomplete Records – net worth.
James Treacy, a sole trader, has not been keeping a full set of accounts. The following figures relating to
the business were supplied on 1/1/2001:
1/1/2001
€
Stock 33,300
Debtors 27,600
Insurance prepaid 1,500
Premises 350,000
Furniture and Equipment at cost 22,000
Motor Vehicles at book value 27,200
Accumulated Depreciation of Furniture and Equipment 6,600
Bank Overdraft 11,500
Creditors 31,600
Expenses due 1,600
(i) During the year €15,000 was transferred from a personal bank account to the business bank account.
(ii) During the year, Treacy had paid €1,500 out of business funds for private house repairs and also had
taken goods to the value of €600 per month for private use.
Treacy estimated that on 31/12/2001 the business assets and liabilities were €490,000 and €27,000
respectively before allowing for depreciation on Furniture and Equipment at the rate of 20% of cost,
depreciation on Motor Vehicles at the rate of 20% of book value and before allowing for expenses due
of €800.
(b) Prepare a statement showing Treacy’s Profit or Loss for the year ended 31/12/2001. (40)
(60 marks)
The following details were taken from the books of Talbot Ltd:
(a) The Buildings Account for the two years 2000 and 2001. (15)
(b) The Provision for Depreciation Account for the two years 2000 and 2001. (20)
(c) The Buildings Disposal Account for the year ended 31/12/2000. (15)
5. Interpretation of Accounts
The following information has been taken from the accounts of Tyndall Ltd for the year ended
31/12/2001.
€ €
Credit Sales 660,000
Less: Cost of Sales
Stock 1/1/2001 58,000
Purchases ?
Financed By
Creditors: amounts falling due after more than one year
10% Debentures (2005/2007). 75,000
(c) Would the above firm have difficulty paying its bills as they fall due? Give reasons for your answer. (10)
(d) If the Return on Capital Employed for 2000 was 13% comment on the current profitability of the firm. (10)
(100 marks)
Page 5 of 8 OVER →
6. Club Accounts
Included in the assets and liabilities of the “Barrs” football club on 1/1/2001 were the following:
Clubhouse and Land €360,000; Equipment €8,000; Investments €16,000; Bar Stock €1,400; Membership
Fees due €400; Bar Creditors €1,000; Expenses due €2,400.
The following is a summary of the club’s receipts and payments for the year ended 31/12/2001
Receipts € Payments €
Cash in Hand - 1/1/2001 2,200 Bar Purchases for cash 36,000
Interest 800 Purchase of equipment 3,200
Membership Fees 7,600 General Expenses 48,300
Bar sales 66,400 Cake sale costs 440
Cake sale receipts 2,700 Bar Creditors 2,100
Sponsorship 18,000 Cash Balance - 31/12/2001 8,860
Donations 1,200 _____
98,900 98,900
(a) Prepare a statement showing the Club’s Accumulated Fund on 1/1/2001. (20)
(b) Prepare the Club’s Income and Expenditure Account for the year ended 31/12/2001. (40)
(d) Explain the difference between the closing balance in the Income and Expenditure Account and the
closing balance in the Receipts and Payments Account. (10)
(100 marks)
Page 6 of 8
7. Cash Flow Statement
The following information has been extracted from the books of Tarpey Ltd.
Financed by
Creditors: amounts falling due after
more than 1 year
10% Debentures 100,000 70,000
Capital and Reserves
Ordinary share capital issued 300,000 260,000
Profit & Loss Account 109,000 63,000
509,000 393,000
(a) Reconcile the operating profit to net cash inflow from operating activities (30)
(b) Prepare the Cash Flow Statement of Tarpey Ltd for the year ended 31/12/2001 using
the following headings:
(i) Operating Activities
(ii) Return on investments (and servicing of finance)
(iii) Taxation
(iv) Capital expenditure and financial investment (Investing activities)
(v) Equity/Ordinary Dividend paid
(vi) Financing (70)
(100 marks)
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SECTION 3 (200 marks)
Answer any ONE questions
8. Skyhigh Ltd, a small jobbing company, has the following budgeted costs for the coming year:
9. Cash Budgeting
S. Tynan had the following Assets and Liabilities and Capital at 1 Jan 2002.
Assets €
Fixed assets 240,000
Stock 16,800
Debtors 44,000
Cash 2,200
303,000
Liabilities
Creditors 57,000
Capital 246,000
The expected sales and purchases for the next 5 months are as follows:
Jan Feb Mar April May Total
Sales €80,000 €75,000 €85,000 €95,000 €100,000 €435,000
Purchases €55,000 €58,000 €64,000 €62,000 €70,000 €309,000
• All sales are on credit and are paid for one month after sale.
• All purchases are on credit except for €15,000 in May and are paid one month after purchase.
• Tynan rents the premises for €12,000 per annum payable each month.
• Wages to be €5,000 per month.
• Equipment bought in May for €7,000 cash.
• Closing stock at 31/5/2002 expected to be €18,800.
• Net profit for 5 months is expected to be €98,000.
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