9706_m16_ms_32 - CAMBRIDGE INTERNATIONAL EXAMINATIONS Cambridge International Advanced Subsidiary and Advanced Level MARK SCHEME for the March 2016

9706_m16_ms_32 - CAMBRIDGE INTERNATIONAL EXAMINATIONS...

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® IGCSE is the registered trademark of Cambridge International Examinations. CAMBRIDGE INTERNATIONAL EXAMINATIONS Cambridge International Advanced Subsidiary and Advanced Level MARK SCHEME for the March 2016 series 9706 ACCOUNTING9706/32 Paper 3 (A Level Structured Questions), maximum raw mark 150 This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge will not enter into discussions about these mark schemes. Cambridge is publishing the mark schemes for the March 2016 series for most Cambridge IGCSE®and Cambridge International A and AS Level components.
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Page 2 Mark Scheme Syllabus Paper Cambridge International AS/A Level – March 20169706 32 © Cambridge International Examinations 2016 1 (a) Kelang Limited Manufacturing account for year ended 31 December 2015$ $ Direct materials consumed Inventory at 1 January 2015 24 600 Purchases 287 000 Carriage inwards 3 700(1) Inventory at 31 December 2015 (28 800)286 500(1)of Direct wages 344 000Prime cost 630 500(1of) Factory overhead Indirect materials 43 000}(1) Indirect wages 69 000Depreciation on property 14 000}(1) Depreciation on plant and machinery 24 000Water and electricity expenses 12 400(1) Other factory overheads 32 500194 900825 400Work in progress at 1 January 2015 66 800}(1) Work in progress at 31 December 2015 72 200(5 400)Cost of goods manufactured 820 000Factory profit 20% 164 000(1)of Transferred to the Trading section of the Income Statement 984 000[8] (b) Kelang Limited Income statement for the year ended 31 December 2015 $ $ Revenue 1 562 000 Cost of sales Finished goods at 1 January 2015 162 000 Transferred from Manufacturing account 984 000 (1of) Finished goods at 31 December 2015 186 000 960 000 Gross profit 602 000(1of) Administrative expenses 374 000 Depreciation on property 6 000}(1)Depreciation on office equipment 18 000Water and electricity 3 100 (1) 401 100200 900Factory profit 164 000(1of) Less: Increase in provision for unrealised profit 4 000(1) Profit from operations 360 900(1of)* [7]
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Page 3 Mark Scheme Syllabus Paper Cambridge International AS/A Level – March 20169706 32 © Cambridge International Examinations 2016 Workings 1 Depreciation on property $400 000 ×5% = $20 000 Allocated to production $20 000 ×70% = $14 000 Allocated to administration $20 000 ×30% = 6000 2 Depreciation on manufacturing plant and machinery ($350 000 – $230 000) ×20% = $24 000 3 Depreciation on office equipment $120 000 ×15% = $18 000 4 Year end unrealised profit $186 000 ×1 / (5 + 1) = 31 000 5 Water and electricity $14 000 + 1500 = $15 500 Allocated to production $15 500 ×80% = $12 400 Allocated to administration $15 500 ×20% = $3100 (c) Responses could include: transfer price includes unrealised profit transfer price less unrealised profit represents the cost of finished goods prudence concept inventory valued at the lower of cost and net realisable value IAS 2 (1 mark) ×
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