This document contains instructions and information for candidates taking an accounting exam, including their name, center number, exam time, and materials allowed. It provides several accounting questions and requests calculations, explanations, and statements. Specifically, it asks candidates to prepare manufacturing accounts, income statements, statements of financial position, and explain accounting treatments and concepts. It also includes numerical problems regarding a small business and investment appraisal calculations for a school bus.
Zimbabwe Schools Examinations Council Ordinary Level Accounting November 2005 Paper 2 Session Zimsec
1. Name Centre Number Candidate Number
ZIMBABWE SCHOOLS EXAMINATION COUNCIL
General Certificate of Education Advanced Level
ACCOUNTING 9197/2
Paper 2 Structured Questions
NOVEMBER 2005 SESSION 1 hour 30 Minutes
Candidates answer on the question paper
Additional materials
No additional materials are required
TIME: 1 hour 30 minutes
INSTRUCTIONS TO CANDIDATES
Write your name, Centre number in the spaces at the top of this page.
Answer all questions.
Write your answers in the spaces provided on the question paper.
INFORMATION FOR CANDIDATES
The number of marks is given in brackets [ ] at the end of
each question or part question.
You may use a calculator.
FOR EXAMINER’S USE
1
2
3
4
TOTAL
2. 1. The following balances have been extracted from Tatenda’s books at 30 June 2004.
$000
Fixed assets at cost: Premises 120
Plant and machinery 75
Motor vehicles 56
Accumulated depreciation: Premises 64
Plant and machinery 26
Motor vehicles 20
Stock: raw materials 44
finished goods 36
Debtors 26
Bank 14
Creditors 12
10% loan stock 20
Ordinary shares 0f $0, 50 each 100
Share premium 40
Retained earnings 45
Sales 800
Purchases of raw materials 192
Direct labour 208
Manufacturing overheads; fixed 118
variable 78
Administrative expenses (including loan stock interest) 92
Selling and distribution expenses 68
Additional information
(i) Stock at 30 June 2005: raw materials $20000
finished goods $48000
3. (ii) Depreciation is charged on cost at the following annual rates
premises 5%
plant and machinery 10%
motor vehicles 25%
(ii)Depreciation is apportioned as follows:
premises ¼ manufacturing ¾ administration
motor vehicles ¼ manufacturing ¾ administration
(iii) As from 1 July 2004, goods manufactured have been transferred to the trading account at
mark up of 20%. Previously transfers to the trading account were at cost.
(iv) Premises were revalued at $120000 on 30 June 2005.
(v) A provision for bad debts of 5% is to be created on 30 June 2005
(vi) Directors recommend a final dividend on ordinary shares of $0,10 and to make a transfer
to the general reserve of $15000.
(a) Draw up a
(i) Manufacturing Account for the year ended 30 June 2005.
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4. (ii) Statement of Comprehensive Income for the year ended 30 June 2005
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(iii) Statement of Financial Position as at 30 June 2005
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6. 2. Tinashe operates a small furniture shop and does not keep complete records.
He provides you with the following figures.
31.12. 2003 31.12.2004
$ $
Creditors 18000 21000
Debtors 19950 20400
Stocks 32250 27750
During the year ended 31 December 2004, the following transactions took place:
$
Cash paid to suppliers of stock 67500
Takings banked 87000
Discounts received 1500
Discounts allowed 1800
Sales returns 4500
Purchases returns 3000
Bad debts written off 4125
Set off 1650
Customer’s cheque dishonoured 4875
Additional information
(i) The stock figure at 31 December 2004 includes stock which cost $4850 for which no
invoice has been received.
(ii) Goods sent to Jones on a sale or return basis were invoiced to him at $2250. The mark up
on these goods was 25%.
(iii) Takings of $600 during the year ended 31 December 2004 were banked on 5 January
2005.
(iv) Tinashe took goods costing $2100 for personal use during the year.
(a) For the year ended 31 December 2004, calculate
(i) gross purchases
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(v) Debtors collection period
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(b) The shorter the payment period, the better it is for Tinashe. Give reasons to agree or
disagree with this statement.
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(c) Explain the accounting treatment for
(i) goods taken by the owner for private consumption.
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(ii) stolen or damaged goods
11. Share Capital and reserves
Ordinary shares of $1 each 600
8% Preference shares of $1 each 300
Share Premium 200
General Reserve 150
Profit and loss account 687
1937
Statement of cash flow for the year ended 31 December 2005
Cash flow from operating activities $000 $000
Net profit before taxation 314
Depreciation: premises 150
plant and machinery 160
motor vehicles 70
profit on sale of motor vehicle (5)
net cash flow before working capital adjustments 689
working capital adjustments
increase in inventory (35)
decrease in trade receivables 5
increase in prepayments (3)
decrease in trade payables (50) 83
cash generated from operations 606
interest paid (35)
taxation paid (150)
net cash inflow from operating activities 421
cash flow from investing activities
purchase of plant and machinery (200)
purchase of motor vehicles (120)
sale of motor van 15
12. net cash used in investing activities (305)
cash flow from financing activities
dividends paid (106)
proceeds from issue of ordinary shares 300
redemption of 8% preference shares (100)
redemption of 10% debentures (100)
net cash used in financing activities (6)
net increase in cash and cash equivalents 100
Additional information
(i) The preference shares and debentures were redeemed on 1 January 2004 at par. No new
shares were issued to finance redemption.
(ii) A bonus issue of 1 for 6 ordinary shares was made on 31 March 2004 utilising share
premium.
(iii) Premises were revalued to $1200000 on 31 December 2004
(iv)The accumulated depreciation on the motor vehicle disposed was $10000.
(v) On 1 June 2004, 200000 0rdinary shares were issued at $1, 50 each.
(vi)The directors proposed to pay dividends of $0, 15 per ordinary share and to transfer
65000 to the general reserve on 31 Dec ember 2004.
(vii) Tax for the year ended 31 December 2004 was $200000.
(a) State the purpose of a cash flow statement
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(b) Prepare the statement of financial position as at 31 December 2004.
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15. (b) Calculate the;
(i) annual savings rounded off to the nearest dollar, to be made by running a new bus.
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(ii) payback period
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(iii) net present value
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