Exam Style Practice Questions 3 Essay

Submitted By Zeeshan-Rock
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Pages: 2

Exam Style Practice Questions 3
Question 1 - Final Accounts
Below is the trial balance of Darcey Tools
Trial Balance as at 31st December 2013

DR £
CR £
Sales

750,000
Sales Returns
400

Discount Received

11,200
Purchases
110,000

Purchase Returns

300
Carriage Inwards
250

Commission Received

19,500
Rent Received

36,000
Stock as at 1/1/13
5,500

Wages & Salaries
78,000

Insurance
1,100

Electricity
1,020

Carriage Outwards
360

Stationary
550

Rates
4,500

Motor Expenses
620

Land and Buildings
650,000

Plant and Machinery
110,000

Provision for Depreciation Plant and Machinery
33,000
Motor Vehicles
40,000

Provision for Depreciation Motor Vehicles

7,600
Debtors
11,500

Provision for doubtful debts

500
Bank
31,000

Cash
2,200

Creditors

6,500
Bank Loan

28,000
Interest
2,800

Capital

186,700
Drawings
29,500

1,079,300
1,079,300

Closing stock as at 31/12/13
5,800

Adjustments

Rates Accrual
200
Wages and Salaries Accrual
800
Prepaid Income Rent Received
1,100
Prepayment Insurance
150

Plant and Machinery are depreciated at 10% on cost (straight line), and Motor Vehicles are depreciated 10% reducing balance. Depreciation has not as yet been calculated for the year.
£200 of the Debtors is irrecoverable and should be treated as Bad Debt.
The Provision for Doubtful Debt for the year is to include; a specific debt of £350 plus 10% of remaining debtors
You are required to: Prepare the Trading Profit & Loss Account for year ending 31st December 2013 and Balance Sheet as at 31st December 2013.

Question 2 – Ratio Analysis
Trading Profit and Loss Account

2012
2012
2013
2013

£
£
£
£
Sales

990,000

1,250,000
Less cost of sales

Opening Stock
8,500

12,500

+ Purchases
210,000

590,000

- Closing Stock
-8,000

-14,500

Cost of Sales

210,500

588,000
Gross Profit

779,500

662,000
Administration costs

28,000

55,000
Net Profit

751,500

607,000 Balance Sheet
2012
2012
2013
2013

£
£
£
£
Fixed Assets

980,000

1,350,000
Current Assets

Stock
8,000

14,500

Debtors
15,500

17,500

Bank
41,500

5,000

65,000 37,000
Current Liabilities

Creditors

11,500

16,500

1,033,500

1,370,500

Financed by:

Capital

330,000

57,000
Less Drawings

-48,000

-45,000
Profit & Loss Account

751,500

1,358,500

1,033,500

1,370,500

You are required to;
a) Calculate Net Profit Margin for both 2012 and 2013…