Examination Paper: Ba Accounting & Finance Level Five Financial Accounting 5AG006 (RESIT)
Examination Paper: Ba Accounting & Finance Level Five Financial Accounting 5AG006 (RESIT)
EXAMINATION PAPER
FINANCIAL ACCOUNTING
5AG006 (RESIT)
Instructions to Candidates
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 1
Desmond PLC
The draft accounts of Desmond PLC, a manufacturing company, have been
prepared for the year ended 30 September 2006 and are shown below.
Extract from trial balance for the year ended 30 September 2006
Debit Credit
£'000 £'000
Revenue 318,000
Increase in allowance for bad receivables 131
Auditor's fees 93
Loan interest 405
Dividends paid:
Interim preference 120
Interim ordinary 370
Tax (over provision) 20
Directors' emoluments 400
Administration expenses 7,500
Distribution costs 29,250
Inventories at 1 October 2005 9,000
Purchases 267,662
Trade payables 2,160
Retained earnings 1 October 2005 5,467
Loan 6,000
Preference shares (50p) 3,000
Ordinary shares (25p) 4,500
Plant and machinery 2,580
Accumulated depreciation 774
Land 2,400
Buildings 3,900
Accumulated depreciation --Buildings 462
Fixtures and Fittings 720
Accumulated depreciation -- Fixtures and fittings 144
Trade receivables 6,315
Bank 9,681
340,527 340,527
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 1 continued
2. The loan is unsecured and repayable in the year 2008. It carries interest
of 9% per annum
Salary Fees
Required:
a) Prepare the income statement for the year ended 30 September 2006
(10 marks)
b) Balance sheet as at 30 September 2006 (10 marks)
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 2
Page PLC has supplied you with the following abridged income
statement for the year ended 31/10/2004
£'000
Profit from operations 2,520
Interest paid -168
Profit before tax 2,352
Tax -750
Profit for the year 1,602
Current liabilities
Trade payables 108 81
Tax liabilities 291 285
399 366
Net current (liabilities)/ assets -12 3
7,188 6,903
Non-current liabilities
Loan 600 2,400
6,588 4,503
Equity
Called up share capital 3,000 2,550
Share premium 177
Retained earnings 3,411 1953
6,588 4,503
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 2 continued
2. During the second year the company sold a non-current asset for £8,000
cash. The asset had originally cost £29,000 and had been depreciated
by £18,000 at the time of sale
Required:
Prepare a cash flow statement for the year ended 31 October 2004 in
accordance with the requirements of IAS 7.
(25 Marks)
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 3
The following summarised balance sheets relate to the Wrap group of
companies as at 30th November 2004
Wrap plc Churchill Ltd
£'000 £'000
Non current assets 5,000 600
Investment in Churchill Ltd 900
Current assets
Inventories 150 30
Trade receivables 80 35
Cash and cash equivalent 10 5
240 70
Current liabilities
Trade payables -160 -120
5,980 550
Equity
Additional information
Wrap PLC purchased a 90% holding in Churchill Ltd on 1 December
2002 when Churchill's retained earnings balance was £50,000
Required:
Prepare the Wrap group of companies consolidated balance sheet
as at 30 November 2004.
(25 Marks)
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UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 4
(20 Marks)
7 of 8
UNIVERSITY OF DERBY
The Faculty of Business, Computing & Law
EXAMINATION PAPER
BA ACCOUNTING AND FINANCE
LEVEL FIVE
FINANCIAL ACCOUNTING
5AG006 (RESIT)
QUESTION 5
a) On 23 January 2006, the board of directors decided to close down one of the
company's operations. By 31 March 2006, this decision had been announced to the
workforce and a detailed plan had been drawn up for its implementation. The
closure would involve redundancy payments of £375,000
c) For the past few years, the company had been conducting two operations which
cause environmental damage. One of these operations is in the country with
legislation that requires companies to rectify ay environmental damage which
they cause. The other is in the country with no such legislation. The cost of
rectifying the damage caused to date by these two operations are estimated
at £5 million and £10 million respectively
d) At 31 March 2006, the company owns a fleet of cars, all of which require an
annual services. The servicing work is expected to occur in the first few months of the
year to 31 March 2007, at an estimated cost of £50,000
(TOTAL 20 MARKS)
© University of Derby
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