This paper consists of THREE SECTIONS. Follow the instructions at the top of EAC EACH H section. SECTION A You Y ou must answer answer ALL FOUR questions in this section. Questions do not carry carr y equal marks; the mark allocation is shown after each question. Section A is worth 67% of the total marks available for the paper.
Q1
The trial balance or OSC enterprise as at 30 September 2012 is as ollows: Dr £000 Revenue Purchases Inventory 1 October 2011 Distribution expenses Salaries and wages General expenses Interest paid on loan Property at valuation Property accumulated depreciation as at 1 October 2011 Plant and equipment at cost Plant and equipment accumulated depreciation as at 1 October 2011 Motor vehicles at cost Motor vehicles accumulated depreciation as at 1 October 2011 Trade receivables Trade payables Cash Ordinary issued £1 shares Dividends paid Bank overdrat Revaluation reserve as at 1 October 2011 Retained earnings as at 1 October 2011 Share premium 3% loan redeemable 2020
Cr £000 57,678
35,322 5,623 4,564 7,234 1,786 30 65,000 9,750 9,230 2,435 450 110 4,320 3,505 780 49,000 500
134,839
619 5,000 2,242 2,500 2,000 134,839
(Note that fgures in the above table are in £000s - thousands) The ollowing notes are applicable: 1. 2. 3. 4. 5.
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Inventory as at 30 September 2012 was valued at £6,230,000. Tax charge or the year ended 30 September 2012 is estimated at £950,000. Loan interest has only been paid or the frst 6 months o year ended 30 September 2012. Wages and salaries amounting to £250,000 are to be accrued or the year ending 30 September 2012. Depreciation is to be calculated or the year ended 30 September 2012 as ollows: ● Property 2% per annum on valuation; ● Plant and equipment 15% per annum straight line assuming no residual value; ● Motor vehicles 20% per annum reducing balance.
2
Required:
Q2
(a)
Prepare the Statement o Comprehensive Income (Proft and Loss Account) or the year ended 30 September 2012 or OSC enterprise in accordance with International (13 marks) GAAP (International Accounting Standards (IASs)).
(b)
Prepare the Statement o Financial Position (Balance Sheet) as at 30 September 2012 or OSC enterprise in accordance with International GAAP (International Accounting Standards (IASs)). (14 marks) (Total 27 marks)
The ollowing inormation is available in respect o IAM enterprise or the year ended 30 September 2012 and 30 September 2011. 30 September 2012 £000s 1,123 8,600 6,500 1,230 975
Proft beore tax Sales Non-current assets at net book value Current assets Current liabilities Closing inventory or the year (included in current assets) Average inventory or the year Equity (share capital + reserves) Interest charged during year Long term debt Cost o sales
30 September 2011 £000s 756 3,500 3,230 956 1,120
320
154
335 5,475 40 1,240 6,200
125 2,654 12 400 2,100
Required: (a)
Calculate ROCE (return on capital employed), ROOE (return on owners’ equity), gearing ratio and ratio o sales to capital employed or the years ended 30 September (4 marks) 2012 and 30 September 2011 or IAM enterprise.
(b)
Calculate the liquidity ratio, acid test ratio and inventory turnover rate or the years (3 marks) ended 30 September 2012 and 30 September 2011 or IAM enterprise.
(c)
Comment on the perormance o IAM or the year ended 30 September 2012 using the inormation you calculated in (a) and (b) above. (7 marks) (Total 14 marks)
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[Turn over
Q3
On 1 January 2007 Atlas enterprise acquired a 75% share in Chase enterprise. Chase has not issued any additional ordinary shares since the acquisition by Atlas. The drat statements o fnancial position o Atlas and Chase as at 30 September 2012 are as ollows:
ASSETS Non-current assets Intangible assets Tangible assets Investment in Chase Current assets Inventory Trade receivables Bank TOTAL ASSETS EQUITY AND LIABILITIES Equity Ordinary shares £1 Ordinary shares 25p Share premium account Retained earnings
Atlas £000
Chase £000
122 8,110 1,775
32 4,112
10,007
4,144
780 432 28
78 112 5
1,240
195
11,247
4,339
6,120 700 1,017
2,520 107 37
7,837
2,664
Liabilities Non-current liabilities Debentures
2,250
1,500
Current liabilities
1,160
175
11,247
4,339
TOTAL EQUITY AND LIABILITIES
(Note that fgures in the above table are in £000s - thousands) The ollowing inormation is also available: 1.
The air value o all assets and liabilities at the acquisition date was equal to book value.
2.
The retained earnings o Chase at the acquisition date were £5,000.
Required: Prepare the Consolidated Statement o Financial Position (Consolidated Balance Sheet) or (16 marks) the Atlas group as at 30 September 2012.
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