mae UNIVERSITY OF ZIMBABWE 2022 OCTOBER EXAMINATION PAPER FACULTY : BUSINESS MANAGEMENT SCIENCES AND ECONOMICS DEPARTMENT FINANCE AND ACCOUNTING PAPER CODE AND TITLE: ACCN101 BUSINESS ACCOUNTING DURATION :3 HOURS EXAMINERS : MRT. TAZVISHAYA, MR D. MAPIYE, MRS. SABAWU AUTHORISED MATERIALS: NON-PROGRAMMEABLE CALCULATOR INSTRUCTIONS FOR CANDIDATES 1. This question paper consists of 4 questions 2. Answer All questions. 3, Start your answer to each question on @ New page, 4. The question paper comprises of 6 printed pages,‘month were as follows (in date orde: i, She paid $6,000 into a separate bank account for the business. fi The business bought desks for S1,600 cash, ili, The business sold some of the desks for $1,200 en iv, The business bought a van for $2,500 c: ‘The business bought more desks for $400, on credit from we The business bought more desks for $800 from Tatenda, on otpatt ‘The business bought desks for $600 on credit from Wit ‘The business sold some of the desks for $2,100 to Saru on ce ere Pet for $1000 Andzoor~ Rent for the month was paid / Pri ires quarts ofthe amount ie o Teste Teseved $1,000 from Sruin eset of th amount owing’ her xiy. Rudo paid another $4,000 of her own money into the business bank ean xv. Desks were purchased on credit from Widzo for $1,000, ad on redit from Mazvita for $1,600 Desks were sold for $1,350 on ereit to rah Desks were sold to George for $2,100 on ccegi” ‘The business paid wages of $400 tothe shop aa Rudo withdrew $700 cash from the business bank account for ferself, ve vie vii. viii. ix. The business sold some desks for $350, on credit to T: = xi. xii. xiii.er 2021: e given below has been extracted from the books of Charles Ltd as at 1 760 000 ordinary shares of 25ceach ERX 200,000 10% Preference shares of $1 each, 750 called & | livery vehicles, at cost 6S \ | Provision for depreciation on delivery vehicles re ¢ Bank loan Purchifses & Sales / Retums . hs Carriage inwards Fixtures and Be atcost AS Hi ¢ Provision for depreciation on fixtures and fittings “8S Inventory at 31 December 2020 Freehold premises, at cost 6 SW 13% Loan stock (2020) unsecured @.$<7 Profit and loss account balance (31 December 2020) -¥ Trade receivables & Trade payables BS —// |General reserve G ROM /% | Management expenses —/ _| Interest on loan stock T pr $__|cr $ 440 000 150.000 51.000 21 000 60 000 1030000] 1331255 10255, 12 473 4600 43 100 19.040 281 000 390 000 200 000 62 550, sSaneAl 181 200 50.000 62 600 13 000 3.000 33 300 4100 53 203 101 100 2.464968 | 2.464 968 consideration in preparing the financialFixtures and fittings: at the moo Ser aan cae / Delivery vehicles: at the rate of 20% per annum on cost. They inchide-4 new delivery vehicle which Was purchased at a cost of $8 000 on 1 July 2021. (¥) Authorized capital is as follows: < ae Ordinary shares of 25¢ each $500 000 == oe Preference shares of $1 each $200 000 7 (vi) The following apportionments are made between administration expenses and selling and distribution expenses: Za Administration Selling & distribution Wages and salaries 75% 25% Directors’ fees 100% : Insurance two-thirds one-third Management 80% 20% (vii) One year’s dividend is to be provided for on the nominal value of the preference) ae a (Wii) One quarter of the bank loan is repayable during the year ending 31 December 2021 and the remainder thereafter. &C a (ix) Taxation is 30% and, Aids Levy js 3% thereon. _/ following for Charles Ltd for the year ended 31 December 2021: [10 marks] [5 marks] (10 marks}TION THREE [25 MARKS) - ~ Gomo Limited 2021 2020 Non-current assets 8 5 000 : i 10,000 Current assets: B " Inventories 90,000 81,000 Receivables 83,000 75,000 Cash 45,000 64,000 218,000 220,000 763,000 630,000 EQUITY & LIABILITIES Capital & reserves; $1 Ordinary shares 150,000 100,000 Share Premium Account enn “sian lated profit . x Accumulated profits pee 531,000 Current liabilities: 9,000 Trade payables a sucen Corporation tax payable A 117/000 2 99,000 763,000 630,000 Statement of Profit or Loss for the year ended 31 December 2021 Turnover Cost of sales Gross profit ‘Administrative expensesbut of output, the fixed costs are variable per unit of Variable in the long run”. — [5 marks] YuZit Limited manufactures and Sells a single product called Hyper which is a surface cleaning detergent for Covid 19 VIS. The following data relate to the product for a certain period: $ Planned sales volume in units 350 000 Selling price per unit 3.00 Variable cost per unit 1.80 Total fixed cost 300 000 Required: ‘Compute the following: (@ The contribution margin per unit; (1 mark] i) The contribution margin ratio; U mark] (iii)The break-even volume in units and in dollars; (2 marks] (iv) The margin of safety in units and as ratio; [2 marks} (v) The sales volume (in units and in dollars) required to earn a profit of $60000. [2 marks} (v))Draw a break-even chart showing the break-even point and margin of safety [5 marks} Billy Hargreaves a Finance manager employs you in his accounts department and on the _ day of your orientation he says, “he isnot ‘worried with the preparation of budgets since Not published”. He is only in in marginal costing since it provides special isions on practical issues such as Make oy buy, fixation of selling price, key or pape > closing or suspending acti ities and maintaining a desired level of profit. ossible limitations of mar tor bie be