SEPTEMBER 2008

NUMERACY & ACCOUNTING

Instructions to candidates:
a) Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything during this
time)
b) Answer any FIVE questions with at least TWO questions from each part
c) All questions carry equal marks. Marks for each question are shown in [ ]
d) Non-programmable calculators are permitted in this examination

PART A
1. a) Assume an exchange rate of £1 = $2.05.
i How many pounds would you get for:
$430
$740
$1,240 [3]
ii How many dollars would you get for:
£460
£820
£1,220 [3]
b) A company sells three products:
Product A at £3 each
Product B at £5 each
Product C at £8 each
The company gives a trade discount of 25% BEFORE adding 17.5% VAT (sales tax).
Calculate (and show workings) the TOTAL invoice value to a customer who buys 240 of Product A, 170 of
Product B and 230 of product C. [6]
c) You buy goods at £10 each and sell them for £25 each. Calculate the mark up as a percentage. [3]
d) You sell 300 shares at £3.60 per share, 450 shares at £2.90 per share and 540 shares at £4.70 per share.
Your broker charges you a fee of £60 PLUS 0.5% of the gross receipts.
i Calculate the gross receipts from the sale of all the shares. [1]
ii Calculate the total broker’s fees. [2]
iii Calculate the net receipts from the sale of all the shares. [2]

2. The following are the values of orders (in £) received on an average day in a sales department:
310 390 520 420 480
660 580 470 870 690
370 560 490 860 730
470 370 570 670 780
560 670 540 560 810
320 770 530 610 380
720 730 820 520 620
630 780 570 640 580
360 530 730 720 630
670 730 810 560 570
TASKS
Starting with £300, group the above figures into intervals of 50 and then:
a) construct a frequency distribution [8]
b) find the arithmetic mean daily sales orders [4]
c) obtain the median [2]
d) sketch a histogram to represent your frequency distribution [6]

continued overleaf
3. A company has the following budgeted data (based on making and selling 200,000 units:
$
Sales price per unit 130
Direct material cost per unit 30
Direct labour cost per unit 40
Variable overhead cost per unit 20
Total fixed costs 2,350,000
TASKS
a) Calculate the contribution per unit. [3]
b) Calculate the break-even point. [3]
c) Calculate the budgeted profit. [5]
d) Sketch a break-even graph of the above data. [5]
e) State what the profit would be if only 141,000 units were made and sold. [4]

4. Write notes on FOUR of the following:

a) compound interest
b) trend analysis
c) Z charts
d) the use of algebra to solve problems
e) scatter diagrams
f) the mode

PART B
5. The following trial balance was extracted from the books of Anderson as at 31 August 2008:
£ £
Capital (01 09 07) 163,000
Drawings 22,000
Equipment at cost 90,000
Vehicles at cost 50,000
Sales 655,000
Purchases 493,000
Wages 74,000
Business rates 23,000
Energy costs 13,000
Insurances 22,000
Stock (01 09 07) 39,000
Bank 8,000
Cash 1,000
Debtors 51,000
Creditors 28,000
Depreciation accounts:
Equipment 25,000
Vehicles 15,000
---------- -----------
886,000 886,000
======= =======
NOTES at 31 August 2008:
 Stock in hand was valued at £41,000.
 Wages owing amounted to £3,000.
 Insurance prepaid amounted to £2,000.
 Equipment is to be depreciated by 20% on cost.
 Vehicles are to be depreciated at 25% on cost.
TASKS
a) Prepare the trading and profit and loss account for year ended 31 August 2008. [12]
b) Prepare the balance sheet as at 31 August 2008. [8]

continued overleaf
6. The following are the first 12 transactions of a new business:
 01 Aug. £57,000 deposited in a business bank account.
01 Aug. Vehicle purchased for £21,000 – by cheque.
01 Aug. Rent paid £1,300 – by cheque.
02 Aug. Goods for resale purchased £4,600 – by cheque.
03 Aug. Insurance premium paid £1,700 – by cheque.
06 Aug. Office supplies purchased for £350 – by cheque.
09 Aug. Goods for resale purchased £3,000 on credit from JHJ Ltd.
11 Aug. Wages paid £700 – by cheque.
12 Aug. Goods sold for £3,900 and payment received in full.
14 Aug. Goods for resale purchased £4,600 – by cheque.
15 Aug. Cheque for £2,000 sent to JHJ Ltd.
17 Aug. Wages paid £700 – by cheque.
TASKS
a) Write up the above transactions in the ledger accounts. [12]
b) Draw up a trial balance as at the end of 17 August. [4]
c) Explain the purpose of a trial balance. [4]

7. The following information relates to a company which has a 31 August year end:
£ £
2007 2008
Sales 1,500 3,100
Cost of sales 690 1,050
Total expenses 440 560
Total current assets 340 470
Total current liabilities 220 330
Closing stock 60 75
Average stock 70 80
TASKS
a) Calculate the following for BOTH years:
i the gross profit percentage
ii the net profit percentage
iii the rate of stock turnover
iv the current ratio
v the acid test ratio [3 each]
b) Comment on the financial performance over the current year. [5]

8. Write short notes on FOUR of the following:

a) day books
b) depreciation
c) share capital
d) the prudence concept
e) control accounts
f) a partnership agreement
g) a petty cash voucher [5 each]

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