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Eal Acc MP Ans 2019

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0% found this document useful (0 votes)
41 views21 pages

Eal Acc MP Ans 2019

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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Nothern Province Education Deparment

Model Paper
General Certificate of Education (Adv.level) Examination 2019

Accounting I, II 33 E II Marking scheme

Part I

1) 3 11) 4 21) 3
2) 4 12) 3 22) 3
3) 5 13) 4 23) 2
4) 2 14) 2 24) 4
5) 4 15) 1 25) 2
6) 2 16) 3 26) 2
7) 1 17) 4 27) 4
8) 3 18) 2 28) 5
9) 3 19) 2 29) 2
10) 3 20) 5 30) 4

(4x30 = 120 Marks)

31) 1 – Technological environment


2 – Socio cultural environment
3 – Political environment
4 – Proffissional environment. (4 Marks)

32) a) Debit note (1 Marks)


b) Purchase return journal (1 Marks)
c) Sales return account Debit (2 Marks)
Debtors control account Credit.
33) 1 – General journal
2 – General journal
3 – Cash payment journal.
4 – Cash receives journal (4 Marks)

34) A L E
1. Decrease Decrease No change
2. Decrease No change Decrease
3. No change No change No change
4. No change No change No change (4 Marks)

35) Rs. 3100 (4 Marks)

Grade - 13 (2019) 1 Accounting Marking Scheme


36) Rs 100 000 (2 Marks)
Rs 125 000 (2 Marks)

37) A – Money value concept


B – Business entity concept
C – Matching concept
D – Accrued concept (4 Marks)

38) a. Rs 2625 000


b. Rs 250 000 (2x2=4 Marks)

39) Rs 82 000 (4 Marks)

40) a. Rs 190 000 (2 Marks)


b. Rs 92 000 (2 Marks)

41) a) Rs 3700 000 (2 Marks)


b) Rs 685 000 (2 Marks)

42) a) Business has to pay 5% interst on loan from retired partners.


b) Currunt account
c) Capital account (2 + 1 + 1 Marks)

43) 1. Reject additional application. (2 Marks)


2. Allocation of shares based on ratio. (2 Marks)

44) a) Land revalution reserves A/C Dr 150000


Profit or loss account Dr 50000
Land account Dr 200000 (2 Marks)
b) Land revaluation defivit losses Rs 150 000. (2 Marks)

45) 1. Rs 7100 (2 Marks)


2. Rs 5400 (2 Marks)

46) 1. Rs 9400 (2 Marks)


2. Rs 4000 (2 Marks)

47) A) Salary and wages control account Dr 10000


Accrued EPF A / C Cr 10000 (2 Marks)
B) EPF expenses A / C Dr 15000
Accrued EPF A / C Cr 15000 (2 Marks)

48) 1. Rs 1000000. (2 Marks)


2. Rs (2 Marks)

49) a) 40 % (2 Marks)
b) 2 years 6 month (2 Marks)

50) a) D (2 Marks)
b) NPV is high (2 Marks)
(20 x 4 = 80 Marks)

Grade - 13 (2019) 2 Accounting Marking Scheme


Part – II
01. Profit or loss and other comprehensive statement for the year ended 31.03.2019.
(Rs 000) 1
Description Note Value (Rs) Value (Rs)
Sales (18000 + 200) 18 200 1
Cost of sales (7 000)
1
Gross profit 1 11 200
Other income 01 660 1
11 860
Ditribution expenses (890) 3
Administrative expenses (1 700) 1
Other income (170) 2
Financial expense. 02 (700)
2
(3 460)
Profit before tax 8 400
(-) Income tax 03 (2 760) 2
Annual profit 5640
Other compretensive income – building 700
revaluation. 2
1 6340

Note – 01
Other income (000)
Rent income 660
Note – 02
Profit befor tax is calculated after deducting following expenses
Directors salary 100
Lease interest 50
Property plant & equpment 500
Bank loan interest 120
2 Marks per 4 items
Auditing expenses 100
EPF expense 210
fzpzp kPs;kjpg;G el;lk; 400
fhzp kPs;kjpg;G el;lk; 300
(20 Marks)
Note – 03
Income tax
Carrent year tax (2018 / 2019) (8400) x 1/3 2800
Adjustment (2017 / 2018) (40)
2760
Workings (000)
Distribution expenses Administration expense
Distribution expenses 1000 Administration 1700
Business expectation losses 90
(-) Pre paid insurances (200)
890
Other expenses Financial expenses
Land revalution deficit 300 Lease interest 50
Computer revalution losses 400 Bank loan interest 120
700 170

Grade - 13 (2019) 3 Accounting Marking Scheme


Statement for equity changes (000)

Description Ordinery share Revaluation General Retained Total


capital reserve reserve income
Openning balance 5700 300 600 200 6800

Total comprehensive income - 700 - 5640 6340 1

General reserve - - 100 (100) - 1

Capitalization 300 - - (300) - 1


Right issues 1000 - - - 1000 1
Closing balance 7000 1000 700 5440 14140
(04 Marks)
Provision for income tax A / C.
Cash 180 B - blf 220
Income 40
220 220
Cash 1220 Income statend 2800
BC / d 1580
2800 2800
B - blf 1580
PLC 31.03.2019 1 (000)
Desuption Note Value (Rs) (000)
Non current assets Property, plant and equipment. 04 14 200 1
Lease property 05 800 1
Current assets
Stocks 400
Trade receivable 06 810 1
Prepaid insurance 200 1
Cash & cash equalent. 07 1 470 2 880
17 880
Equity
Stated capital – Ordinary shares 7 000
Reserves – Revaluation reserves 1 000 1
- General reserves 700
- Retained profit. 5 440 14 140
Non current liabilities
Bank loan 1 000
lease creditors (850 – 450) 400 1 1 400
Current liabilities
Trade payable 280 1
Lease creditros 200 1
Accrued bank loan interest 30 1
Accrued lease installment 250 1
Accrued income tax 1 580 1 2 340
17 880

Grade - 13 (2019) 4 Accounting Marking Scheme


Lease creditors (000)
Cash 200 Motor van 1000
B – c /d 850 lease interest 50
1050 1050
B – c /d 850

Note – 04
Property plant and equipment (000)
Land Motor Buildings Computer Total
van equipment
Cost – Balance 01.04.2018 4000 6000 5000 2000 17000
(+) Revaluation 1000 - (600) (400) -
1 1
Depreciation adjustment - - (400) (600) (1000)
Balance on 31.03.2019 5000 6000 4000 1000 16000
Accumulated depreciation B/S on 1600 300 400 2300 1
01.04.2018
Sales - - (400) (600) (1000)
Depreciation - 200 100 200 500 1
B / S on 31.03.2019 - 1800 - -- 1800
Carring value 31.03.2019 5000 4200 4000 1000 14200
(4 Marks)
Note – 05
Lease property (000)
Motor van (cost) 1000
Accumulated depreciation (200)
800

Note – 06
Trade receivable (000)
Trade receivable (620 + 280) 900
Allowance for losses expected from trade receivable (90)
810

Note – 07
Cash and cash equalent (000)
Cash balance 540
Petty cash balance 30
Treasury bill (3 months) 900
1470

(20 Marks)
(Total 40 Marks)

Grade - 13 (2019) 5 Accounting Marking Scheme


02. a.
Fixed cost
1. BEP (units) =
Unit contribution

5000 000
=
500
= 10000 Pairs. 1

BEP (value) = BEP in unit x Unit sales price


= 10000 x 800
= 8000 000 1

Budgeted sales Sales units in BEP


2. Margine of safty (units) = -
units
= 25000 - 10000
= 15000 Pairs. 1

Margine of satfy (value) = Margine of safty x Sales price


units
= 15000 x 800
= 12000000 1

Margine of safty in
3. Expected profit = x Unit contribution
units
1 1
= 15000 x 500
= 7500000.

4. 5000, 000 + 400 0000 1


450 1

= 9000000
450
= 20000 Pairs.

Fixed cost 81 00 000 1


5. = = 15000 Pairs
Unit contribution 540 1

(10 Marks)

Grade - 13 (2019) 6 Accounting Marking Scheme


b.
1. Production overhead apportionment table. ( 000)

Apportionment Production Service


Over heads basis Total department department
A B C
Indirect meterial Allocated 240 90 15 1
Indirect wages Allocated 180 60 10 1
Other indirect cost Allocated 15 10 5 1
Machine depreciation Machine cost 200 125 70 5 1
25 : 14 : 1
Rent & Electricity Flooe area 150 90 45 15 1
6 : 3 : 1
Employees welfare No. of employes 100 60 30 10 1
6 : 3 : 1

710 305 60
1
Service department Equal 30 30 (60)
740 335 0

Budgeted over head


2. Overhead absorption rate =
Budgeted direct wages hours.
1
A = 740 000
37 000 1
= Rs. 20.

335 000 1
B =
33 500 1
= Rs. 10.

c.
Direct material 650 1
Direct wages A (8 x 80) 640
B (6 x 60) 360 1000 1
Other direct cost 30 1
Prime cost 1680
Over head A (8 x 20) 160 1
B (6 x 10) 60 1 220
Production cost per unit 1900
10% profit 190
Selling price per unit 2090 1

(20 Marks)

Grade - 13 (2019) 7 Accounting Marking Scheme


Store ledger – FIFO

Purchases Distribution Balance


Date Units Rate Value Units Rate Value Units Rate Value

1/1 1000 10 10000 1000 10 10000


1
10/1 260 10.50 2730 1260 12730

20/1 700 10 7000 1 560 5730

4/2 400 11.50 4600 960 10330


1
21/2 300 12.50 3750 1260 14080

16/3 300 10 3000

260 10.50 2730 1

60 11.50 690

620 6420 640 7660


12/4 240 11.50 2760 1 400 4900

10/5 500 11 5500 1 900 10400

25/5 100 11.50 1150


1
280 12.50 3500

380 4650 520 5750


26580

1. Total purchasing Cost ⇒ 26580. 1


2. Total cost of sales ⇒ 7000 + 6420 + 2760 + 4650
⇒ 20830 1
3. Closing stocks ⇒ 5750 1
(10 Marks)
(Total 40 Marks)

03. a. 1.

1 Assets Liabilits Equity

Property Debtors Stocks Cash Creditors Loan

2900 135 165 550 450 100 3200


1 + 65 - 65 1
2 + 40 - 80 + 75 + 35 1
3 - 20 - 20 1
4 - 100 + 95 - 5 1
5 - 5 - 5 1
6 - 5 - 1
1
+6
2900 75 150 630 450 95 3210

Grade - 13 (2019) 8 Accounting Marking Scheme


(000)
Profit / loss Closing net Opening net Additional
2. = - + Drawings –
assets assets Capital
1 1 1 1
= 3210 – 3200 +5 - 6
= 9.
(10 Marks)
b. General journal (000)
Description Dr Cr
Machinery 4250 
Motor van 2750 
Stocks 3240 
Debtors 3600 
Cash 1610 
Bank loan 6150 
Creditors 4500

Capital 4800

(Transfer the opening assets and 15450 15450
liabilits to capital A /C)
Bad debits account Dr 2 
Debtors control account Cr 2

(Written off bad debits from Amal has been recorded)

(10 x ½ ) = 5 Marks
Sales journal (000)

Description Value
Pimal 1870

Amal 3850

Transfer to General ledger 5720

(1 Mark)
Purchase ledger (000)
Description Value
Piratheep 3120
Rumesh 2850 
Tranfer to General ledger 5970 

(1 Mark)
Sales return journal (000)
Description Value
Pimal 65

Amal 55

Transfer to General ledger 120

(1 Mark)

Grade - 13 (2019) 9 Accounting Marking Scheme


Purchase return journal (000)

Description Value
Piratheep 125
Rumesh 42
Transfer to General ledger 167
(1 Mark)

(000)
Analysis
Date Description Discoun Value
t Sales Debtros Other Others
income
2.4.19 Sales 12000 12000
7.4 Rent 2000 2000
12.4 Capital 200 200 
Pimal 12  2510 2510 
Amal 18  4950 4950 
30 21660 12000 7460 2000 200
(7 x ½ = 3 ½ Mark)

Cash payment journal (000)

Analysis
Date Description Discoun Value
t Purchase Creditors Expenses Other

1.4.19 Machine 750 750 


1.4 Furniture 150 150 
2.4 Drawings 1500 1500 
5.4 Administration 900 900 
10.4 Distribution 85 85 
20.4 Purchase 460 460 
30.3 Electricity 275 275 
Piratheep 44  3450 3450 
Rumesh 19  1560 1560 
63 9130 460 5010 1260 2400

(5 ½ x 11 Marks)

Grade - 13 (2019) 10 Accounting Marking Scheme


2. Sales ledger (000)
Amal A / C Pimal A / C
B–b/f 2250  Sales return 55  1350  Pimals return 65 
Sales 3850  Cash 4950  1870  Cash 2510 
Discount 18  B – b / f Discount 12 
B–b/f 1077 B ad debits 2 
6100 6100 3220 B–b/f 631
B–b/f 1077 B–b/f 3220
631

Destors list

Debtors Balance
Amal 1077 
Pimal 631 
Total 1708

Purchase ledger (000)

Piratheep A / C Rumesh A / C

Return 125  B – c / d 2925  Return 42  B – c / f 1575 


Cash 3450  Purchase 3120  Cash 1560 B Puechase 2850 
Discount 44  Discount 19 –
B–c/d 2426 B–c/d 2804 c /
6045 6045 4425 f 4425
B–c/f 2426 B–c/f 2804

Creditors list

Credits Balance
Piratheep 2426 
Rumesh 2804 
Total 5230
(25 x ¼ = 6 ¼ Marks)

3. General ledger (000)


Destors cotrol A / C
B–c/f 3600 Returns  120
Sales 5720  Cash  7460
Discount  30
Bad debts  2
B–c/f 1708
9360 9320
B–c/f 1708

Grade - 13 (2019) 11 Accounting Marking Scheme


Creditors Control A / C (000)
fld;nfhLeu; fl;Lg;ghl;Lf; fzf;F.
Return 167 B – c / d 4500
Cash 5010  Purchase  5970
discount 63 
B–c/d 5230
10470 10470
B–c/f 5230
Cash control A / C
B–c/f 1610  Purchase 460 
Sales 12000  Creditors 5010 
Debtors 7460  Expenses 1260 
Income 2000  Others 2400 
Others 200  B – c / d 14140
23270 23270
B–c/d 14140
Purchase A / C
Credits  5970 B–c/d 6430
Cash  460
6430 6430
B–c/d 6430

Sales A / C Machinery A / C
B–c/d 17720 Debts 5720 B–c/d 4250 B–c/d 5000
Cash  12000 Cash  750
17720 17720 5000 5000
B–c/f 17720 B–c/d 5000

Furniture A / C

Cash  150 B–c/d 150


B–b/d 150

(23 x ¼ = 5 ¾ )
(Total 40 Marks)

04. a.
1. Sales journal

Description Sales VAT Value


Salini 30 000 3000 33 000 1
Sangavi 10 000 1000 11 000 1
Sambavi 16 000 1600 17 600 1
Samini 20 000 2000 22 000 1
Transfer to general ledger 76 000 7600 83 600

(4 x 1 = 4 Marks)
Grade - 13 (2019) 12 Accounting Marking Scheme
2. Salini A / C Sangavi A / C
B–c/d 50000 Cash 60000  B – c / d 20000 Cash 24000 
Sales 30000  Discount 150  Sales 10000  Discount 300 
VAT 3000  B – c / d 22850 VAT 1000  Bad debts 6700 
83000 83000 31000 31000
B–b/d 22850

Sambavi A / C Samini A / C
B–c/d 16000 Cash 15000  B–c/d 14000 Cash 13000 
Sales 16000  Discount 600  Sales 20000  Discount 280 
VAT 1600  B – c / f 18000 VAT 2000  Baddebts 400 
33600 33600 B–c/d 22320
B–c/d 18000 36000 36000
B–c/d 22320
Debtors list

Debtors Balance
Salini 22850 
Sangavi -
Sambavi 18000 

Samini 22320 

63170
(21 x ½ = 10 ½ Marks)
3. General ledger

Debtors control A / C Sales A / C

B – b/d 100000  Cash 112000  Debts 76000 


Sales 76000  Discount 1330 
VAT 7600  Bad debts 7100 Cash A / C

B–c/d 63170 Debts 112 000 
183600 183600
B – b/ d 63170

VAT A / C Alloued discount A /C Bad dets.

Debts 7600  Debtors 1330  Debtors 7100 

(11 x ½ = 5 ½ Marks)

Grade - 13 (2019) 13 Accounting Marking Scheme


b. 1. Petty cash payment journal

Description Analysis
Date Value
Leading Cleaning Travelling Others
&
unloading
5.1.19 Loading 1000 1000 
8.1 Three weeler 800 800 
10.1 Cleaning 1100 1100 
14.1 Unloading 900 900 
16.1 Drawings 2000 2000 
18.1 Rent 1500 1500 
20.1 Cleaning 1200 1200 
22.1 Malathy 2500 2500 
23.1 ticket 1200 1200 
25.1 loading 800 800 
31.5 Transfered to
general ledges 13000 2700 2300 3500 4500
(10 x ¼ = 4 Marks)
Petty cash A / C

B – b/ d 2000  loading & unloading 2700 


Cash 18000  Travelling 2300 
Cleaning 3500 
Drawing 2000 
Creditors 2500 
20000 B – c/ d 7000
B – b/ d 7000 20000

Cash A / C Loading & unloading expenses


1/1 Petty 18000 31/1 Petty cash 2700 

Cleaning expenses Travelling expenses


31/1 Petty cash 2300  31/1 Petty cash 3500 

Drawing A / C Debtors control A / C


31/1 Petty cash 2000  31/1 Petty cash 2500 

(12 x ½ =6 Marks) (10 Marks)

Grade - 13 (2019) 14 Accounting Marking Scheme


C. 1. VAT A / C

Debtors 400  B – c /d 2500 


Purchase 7000  Creditors 300 
Cash 5000  Sales 12000 
B – c /d 2400
14800 14800
B – c /d 2400 (6 Marks)

2. Vanavil business
Profit or loss statement for the year ended 31.0 3.2019

Sales 120 000 


(-) Sales returns (4 000) 
116 000
(-) Cost of sales
Opening stocks. 15 000
Purchases 70 000 
(-) Sales returns (3 000) 
Cost of goods to be sold 82 000
(-) Clossing stocks (28 000)  (54 000)
Gross profit 62 000

(+) Other income 5500 


Discount received 67500
(-) Operating expenses (13 000) 

 54 500
(½ x 8 = 4 Marks)
(Total 40 Marks)
05. a. 1. Cash account

B–b/f 20 000  Payments 69 000 



Receives 68 000  B – c / d 19 000 

88 000  88 000
B–b/f 19 000 Standing order 5 000 
B–c/d 14 000
19 000 19 000
B–B/f 14 000

Grade - 13 (2019) 15 Accounting Marking Scheme


2. Bank statement for the month of March 2019.
Description Debit Credit Balance

Balance 18000 

Cash deposit 70000  88000 

Cheque 65000  23000 
Standing order payment 5000  18000 
(½ x 20 = 10 Marks)
b. 1. Subscription account

B–b/f 10000 1 B – b / f 5000 1


Income & expen 55000 1 Cash 53000 1
B–c/d 10000 1 Written off 2000 1
B–c/d 15000
75000 75000
B–b/f 15000 B–b/f 10000

(6 Marks)
2. Life membership fees A / C

Income & 15000 1 B – b / f 10000 1


expense 1 1
B–c/d 60000 Cash 65000
75000 75000
B–b/f 60000

(4 Marks)
3. Receipts and payment account.

B–b/f 20000 1 Expenses 43000 3


Life membership 65000 1 Property 35000 2
Membership fees 53000 1 B – c / d 95000 1
Other income 35000 1
173000 173000
B–c/d 95000
(10 Gs;spfs;)
(10 Marks)
Working
Expenses A / C Property plant & equipment

Cash 43000 B–b/f 5000 B–c/d 60000 Depreciation 10000


B–c/d 20000 In come 58000 Cash 35000 B–c/d 85000
63000 63000 95000 95000
B–c/d 20000 B–c/d 85000

Grade - 13 (2019) 16 Accounting Marking Scheme


c. Payment for the month of may 2019.
Payments EPF
Name of Total Reduction Total Net Employees
Employees Basic Allowen salary Welfar EPF Reducti salary contribution
salary ce e on
Kugan 10000 8000 18000 100 1800 1900 16100 2700
Piraba 5000 4000 9000 100 900 1000 8000 1350
Jaso 10000 8000 18000 100 1800 1900 16100 2700
Sami 5000 4000 9000 100 900 1000 8000 1350
30000 24000 54000 400 5400 5800 48200 8100
1 1 1 1 1 1
Salary wages control A / C
EPF 5400 1 Salary & wages 54000 1
Welfare 400 1
Cash 48200 1
54000 54000
(10 Marks)
(Total 40 Marks)
06. a. Arani, Poorani, and Tharani Partnerships Profit or loss statement for the year ended
31.03.2019. (000)

Service income 9800


(-) Service providing expenses (3750) 1
Gross profit 6050 1
(+) Other income
Fixed deposit interest 420
Comission income 200 1 620
6670
(-) Expenses
Property plant and equipment dep 1260
Office expenses 100
Other operating expenses 1100 1
Tharani loan interest 60 (2520)
Net profit 4150
Capital interest - Arani 120 1
- Poorani 140 1
- Tharani 80 340
Salary - Arani 480
- Poorani 360 1

- Tharani 600 1440 (1780)


2370

Share of profit - Arani 1185


- Poorani 790 1
- Tharani 395 (2370)
(8 Marks)

Grade - 13 (2019) 17 Accounting Marking Scheme


Partner’s current A / C
A P T A P T
B–b/f 100 1 B–b/f 200
Salary 400 280 200 1 Capital interest 120 140 80 1
Loan interest 60 Salary 1480 360 600 1
B–c/d 1585 910 875 Loan interest 60
Profit 1 1185 790 395
1985 1290 1135 1985 1290 1135
B–b/f 1585 910 875
(6 Marks)
Partner’s capital A / C

A P T A P T
Grood will 600 400 200 B–b/f 1200 1200
B–c/d 1200 1 1400 800 Motor van 600 1
1
Cash 400 1
Good will 600 600
1800 1800 1000 1800 1800 1000
B–b/f 1200 1400 800
(4 Marks)
Arani, Poorani, and Tharani partnership’s financial position statement as at 31.03.2019 (000)
Non Current Assets
Property, Plant and equipment 5540
14% Fixed deposit 3000 8540
Current Assets 1
Receivable FD interest 420
Cash 210 630
1 9170

Equity
Capital - A 1200
- P 1400
-T 800 3400
Current A / C - A 1585
- P 910
- T 875 3370
Non current liabilities
Tharani loan 2400
9170

(2 Marks)
(20 Marks)

Grade - 13 (2019) 18 Accounting Marking Scheme


b. Cash flow statement of Mathavi Ltd for the year ended 31.03.2019.
(000)

Operating activities
Profit befor tax 140 
Adjustments
Dividend income (51) 
Depreciation 52 
Interest 70 
Motor sales loss 5 
Profit before working capital changes  216
Debtors decrease 40 
Stock decrease 12 
Prepaid operating expenses decrease 8 
Creditors decrease (76) 
Cash flow generated from operating activities 200
(-) Paid interest (100) 
Paid Income tax (50) 
Net cash flows generated from operating activities  50

Cash flow statement of Mathavi Ltd for the year ended 31.03.2019.
(000)

Operating activities

Received from debtors 1600
Paid to credits (1000) 

Paid operating expenses (400) 



Cash flow generated from operating activits 200

(-) Paid interest (100)
Paid income tax (50) 

Net cash flows generated from operating activites 50

(20 x ½ = 10 Marks)
Working (000)
Debtors control A / C Creditors control A / C
B–b/f 540  Cash 1600  Cash 1000  B – b / f 566 
Sales 1560  B – b / f 500 B–b/f 490 Purchase 924
2100 2100 1490 1490
B–b/f 500 B–b/f 490

Grade - 13 (2019) 19 Accounting Marking Scheme


Interest A /C Income tax A / C
Cash 100 B–b/f 40 Cash 50 B–c/d 20
B–c/d 10 Profit/loss 70 B–c/d 15 Profit/loss 45
110 110 65 65
B–b/f 10

Operating expenses A / C

B–b/f 15 Profit/loss 408 Opening stocks 162

Cash 400 B–c/d 7 Purchase 924

415 415 1086

B–b/f 7 (-) Closing stocks (150)


Cost of sales 936

c. 1. (000)

Purchasing cost (2500) 


Installation cost (200) 

Engineer fees (100) 


Location preparation charges (300) 
(3100)
Old machine sales 600 
(2500)
Working Capitial increases (150) 
Net cash flows (2650)

(½ x 6 = 3 Marks)
2.

Year 1 2 3 4
Cash inflows 1400 1

Receives increase 1000 1400 1500 150 1


Recovery of working capital 200 1
1000 1400 1500 1750

Cash out flows.


Payment increase (200) (300) (500) (750) 1
Net cash flows 800 1100 1000 1000

(4 Marks)

Grade - 13 (2019) 20 Accounting Marking Scheme


3.

Year Net cash flows Discounting NPV


factor
0 (2650) 1 (2650) 

1 800 0.9 720 

2 1100 0.8 880 


3 1000 0.7 700 
4 1000 0.6 600 
NPV 250 

( ½ x 6 = 3 Marks)
(10 Marks)
(Total 40 Marks)

Grade - 13 (2019) 21 Accounting Marking Scheme

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