Reference no: EM133128756
Questions -
Q1. Penketh Ltd has operating profit for the year ended 30 June 2021 of £20,900, after charging depreciation of £2,500, exceptional expenses of £5,000 and making a profit on the disposal of a machine of £2,000. The balance sheet shows the following changes over the year:
Trade receivables: increase by £2,500
Inventories: increase by £2,700
Trade payables: decrease by £3,000
What is the net cash from operating activities?
a) £25,900
b) £13,200
c) £28,400
d) £18,700
Q2. Dargent Trading applies a mark up of 40%. At the start and end of the year, inventory was valued at £25,000 and £22,000 respectively. During the year cash purchases were £15,000 and credit purchases of £90,000. What was the value of sales for the year?
a) £151,200
b) £142,800
c) £180,000
d) £170,000
Q3. Harbin Ltd. has a 31 December year end. A motor vehicle was acquired in July 2019 for £20,000. Depreciation is charged at 25% reducing balance basis, with a full year's charge in year of purchase and none in year of sale. The vehicle was sold for £10,000 in July 2021. What is the profit or loss on disposal?
a) Loss £850
b) Profit £1,250
c) nil profit or loss
d) Loss £1,250
Q4. The directors of Woodbank Ltd are anxious to improve the profit to be reported for the accounting period just ended. Which of the following would improve the profit reported?
a) Increasing the rate of provision for doubtful debts from 10% to 12% of all balances over 60 days old.
b) Creating a provision for possible warranty claims against the company.
c) Changing from a reducing balance to a straight line basis for computing depreciation on new non-current assets.
d) Writing down the value of closing inventory on the basis of damage to the stock.
Q5. Schrute Ltd has been trading for many years and on 1 May 2021 it had £12,000 in the bank. Every month it makes sales valuing £60,000, half of which is for cash, with one month's credit given on the other half. In the month of May a bad debt of £2,000 was written off. It takes two months credit on its monthly purchases of £28,000. During May the company issued 20,000 shares with a £1 nominal value, securing a 50% premium on the issue. Also during the month depreciation on non-current assets of £3,000 was charged. What was Rose Ltd's bank balance on 31 May?
a) £74,000
b) £69,000
c) £72,000
d) £64,000