9706_w17_qp_32.pdf - Cambridge International Examinations Cambridge International Advanced Subsidiary and Advanced Level 9706\/32 ACCOUNTING Paper 3

9706_w17_qp_32.pdf - Cambridge International Examinations...

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This document consists of 9 printed pages, 3 blank pages and 1 Insert. IB17 11_9706_32/4RP © UCLES 2017 [Turn over  Cambridge International Examinations Cambridge International Advanced Subsidiary and Advanced Level ACCOUNTING 9706/32 Paper 3 Structured Questions October/November 2017 3 hours No Additional Materials are required. READ THESE INSTRUCTIONS FIRST An answer booklet is provided inside this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional answer paper ask the invigilator for a continuation booklet. Answer all questions. All accounting statements are to be presented in good style. International accounting terms and formats should be used as appropriate. Workings should be shown. You may use a calculator. The number of marks is given in brackets [ ] at the end of each question or part question.
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2 © UCLES 2017 9706/32/O/N/17 Section A: Financial Accounting 1 The GT Boating Club is a not-for-profit organisation which collects funds by subscriptions paid annually. At 1 January 2016 the following assets and liabilities were held by the club: $ Boathouse 240 000 Fixtures and fittings Cost 15 000 Accumulated depreciation 10 000 Trade payables 1 750 Total inventory 1 100 Bank 6 150 debit Insurance paid in advance 1 100 Electricity owing 450 Subscriptions in arrears 600 Subscriptions in advance 400 Additional information 1 The club runs a restaurant for the exclusive use of members and their guests. During the year ended 31 December 2016 the revenue of the restaurant was $45 000. 2 The opening restaurant inventory was 75% of the total club inventory. The closing restaurant inventory had doubled at 31 December 2016. 3 During the year ended 31 December 2016 the club paid $28 350 for restaurant purchases. All the club’s trade payables at 1 January 2016 related to the restaurant suppliers. This had risen by 20% at 31 December 2016. 4 The club paid insurance for the year of $4800 and electricity of $2000. Half of these costs are charged to the restaurant. At 31 December 2016 the club still owed $950 for insurance. REQUIRED (a) Prepare a statement to calculate the restaurant profit for the year ended 31 December 2016. The statement should also clearly show the gross profit. [10] Additional information Another local boating club runs a similar restaurant. Its latest accounts showed that the restaurant had achieved a gross margin of 45%. REQUIRED (b) (i) Calculate the difference between the gross margins of both restaurants. [2] (ii) Discuss three actions which the club could take to improve the gross margin. [6]
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3 © UCLES 2017 9706/32/O/N/17 [Turn over Additional information The club is now considering the introduction of a life membership subscription. The annual subscription is $100 and the proposed life subscription would be $1000.
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