june_as_9706_mark_schemes.pdf - Compiled by D El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme A AND AS LEVEL

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Unformatted text preview: Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme A AND AS LEVEL – JUNE 2003 Question Number 1 2 3 4 5 Syllabus 9706 D A A A C Question Number 16 17 18 19 20 6 7 8 9 10 D A B B B 21 22 23 24 25 C C C D A 11 12 13 14 15 B C B C C 26 27 28 29 30 C D A D D Key Key B A A D B TOTAL 30 © University of Cambridge Local Examinations Syndicate 2003 1 Paper 1 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations JUNE 2003 GCE A AND AS LEVEL MARK SCHEME MAXIMUM MARK: 90 SYLLABUS/COMPONENT: 9706/02 ACCOUNTING Paper 2 (Structured Questions) 2 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme A AND AS LEVEL – JUNE 2003 Syllabus 9706 3 Paper 2 All amounts in $000 1. Working for sales Cash-banked = 2784 - 53 Expenses Loan accounts Opening balance Closing balance Bank – takings Buildings Balance (195 + 63) 2731 205 90 (3) 8 3031 (1) (1) (1) (1) (1) 2731 B/fwd 53 Crs (purchases) 258 Expenses Int on overdraft 3042 203 1996 823 20 3042 Trading and Profit and Loss Account For 6 months ended 30 September 2002 (a) 1540 Sales = 3031 + 420 (1) – 820 (1) less cost of sales Opening stock + purchases 1996 – 1210 (1) + 510 (1) - Closing stock Gross profit less Expenses = 823 (1) + 205 (1) – 192 (1) + 103 (1) Interest paid Depreciation (70/2) (1) Doubtful Debts provision (1) Loss on sale of fixtures (1) Net loss 2631 1296 2836 2132 499 704 939 (4 if netted) 20 35 21 17 1032 (533) [16] Award marks where candidates have identified correct figures and have treated these figures correctly – up to 7 marks. © University of Cambridge Local Examinations Syndicate 2003 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 2 Mark Scheme A AND AS LEVEL – JUNE 2003 Syllabus 9706 4 Paper 2 (b) Balance Sheet as at 30 September 2002 Fixed assets less depreciation 280 (1) 35 (1) (OF from Trading P & L) 245 Current assets Stock Debtors - provision Cash Current liabilities Creditors Accruals Bank 704 (1) 420 21 (1) Share capital Retained profits = 910 – 533 (OF) Loan account – Bracket Loan account – Racket 399 8 1111 510 103 258 871 240 485 25 377 104 - 45 69 - 45 59 24 83 485 (1 + 1) (1) (1) [8] (c) Mention of any 6 of the following, for 1 mark each: Factoring Leasing Hire purchase (H.P.) Creditors Money lenders - friends/relatives Mortgage/credit union Another (merchant) bank Shareholders Etc. [6] © University of Cambridge Local Examinations Syndicate 2003 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 3 Mark Scheme A AND AS LEVEL – JUNE 2003 Syllabus 9706 5 Paper 2 2 (a) GREENYARDS LTD 2001 2002 GP Ratio 255 51% 255 42% 500 610 NP Ratio 30 6% 25 4.1% 500 610 ROCE 30 14.6% 25 9.6% 205 260 Current Ratio 80 3.2:1 90 1.6:1 25 55 Quick Ratio 30 1.2:1 30 0.5:1 25 55 Stock Turnover – times 245 4.9 355 5.9 – days 50 74 60 62 Debtors Turnover – days 20x365 30x365 500 15 610 18 POYNDER LTD 2001 2002 215 51% 230 50% 425 460 25 5.9% 30 6.5% 425 460 25 11.1% 30 14.9% 225 202 40 1.1:1 77 1.5:1 35 50 13 0.4:1 57 1.1:1 35 50 210 7.8 230 11.5 27 47 20 32 Any other relevant ratios acceptable 1 for each pair correctly calculated to maximum [12] (b) Greenyards’ GP, NP and ROCE ratios have worsened, whilst its current and quick ratios have improved – they were too high in 2001. Stock turnover is faster – good, provided it is not at the expense of profit – but debtors’ payments has lengthened which means that cash is slower coming in – not good, although it may encourage credit customers to continue buying from Greenyards. (Candidates should state whether the ratio is better or worse, and not just ‘up’ or ‘down’, as the ratios must be analysed.) Although Poynder’s GP ratio has worsened slightly, its NP ratio has improved, showing a better net profit for every $ of sales. Current ratio is at a reasonable level, but quick ratio looks as if it is improving. Stock turnover rate has, unfortunately, decreased, but this is counteracted by improved ROCE. 1 for each point to maximum [12] (c) Shortcomings and dangers of ratio analysis: (i) Requires a basis of comparison – one ratio on its own no use – must compare to, e.g., last year’s figures, other companies’ figures, etc. (ii) Ratios need to be analysed for successful conclusion (iii) Each industry has different standards to be adhered to (iv) Outside influences can affect ratios – e.g. national/world economy, trade cycles (v) Care must be taken to compare like with like, as definitions of terminology may vary (vi) Easy for the inexpert to arrive at false conclusion (vii) Different accounting policies between companies may render ratios incompatible © University of Cambridge Local Examinations Syndicate 2003 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 4 Mark Scheme A AND AS LEVEL – JUNE 2003 Syllabus 9706 6 Paper 2 (viii) Ratios can over-simplify a situation (ix) Prepared using historical costs, so can be out of date (x) Need more than ratios to get an accurate view of the company Etc. 1 for each point to maximum [6] 3 (a) (i) Per Unit Selling price Direct materials Direct labour Variable overheads Total variable costs (ii) Contribution per unit Contribution as % of sales Domestic Commercial Industrial $2.00 $4.00 $8.00 (3) $0.90 $0.50 $0.20 $1.60 $1.47 $0.66 $1.20 $3.33 $1.49 $2.67 $2.13 $6.29 (3) $0.40 20 $0.67 16.75 $1.71 21.375 (3) (3) (OF if answer is based on OF above) [12] (b) Domestic Commercial Industrial 54000 33000 42000 $0.40 ( ) $0.67 ( ) $1.71 ( ) Fixed Costs contribution Units at break-even (OF) Dollars at break-even (OF) OF 135000 (OF) 270000 (OF) OF 49254 (OF) 197016 (OF) OF 24562 (OF) 196496 (OF) (3) (3) (OF) (3) (3) [12] (c) Although the figures given appear to show loss of $6000 for Domestic and $3000 for Commercial, this is because of the method of absorption of fixed overheads. If these two production lines were closed then all of the fixed overheads would have to be absorbed by Industrial, which would reduce its profit of $54000 to a loss of $33000. That is as follows: $000 Sales Variable costs (unchanged) Add all fixed costs Profit (Loss) 354 129 $000 450 483 (33) Provided a product shows a positive contribution and the total contribution for all products is positive, then there is no reason to close a production line. Maximum [6] © University of Cambridge Local Examinations Syndicate 2003 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations 7 Grade thresholds taken for Syllabus 9706 (Accounting) in the June 2004 examination. maximum mark available minimum mark required for grade: A B E Component 1 30 21 19 14 Component 2 90 64 58 38 Component 3 30 22 20 14 Component 4 120 88 79 45 The thresholds (minimum marks) for Grades C and D are normally set by dividing the mark range between the B and the E thresholds into three. For example, if the difference between the B and the E threshold is 24 marks, the C threshold is set 8 marks below the B threshold and the D threshold is set another 8 marks down. If dividing the interval by three results in a fraction of a mark, then the threshold is normally rounded down. Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations JUNE 2004 GCE A AND AS LEVEL MARK SCHEME MAXIMUM MARK: 30 SYLLABUS/COMPONENT: 9706/01 ACCOUNTING Paper 1 (Multiple Choice) 8 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme ACCOUNTING – JUNE 2004 Syllabus 9706 Question Number Key Question Number Key 1 2 3 B D A 16 17 18 B B D 4 5 D B 19 20 A D 6 7 8 B B A 21 22 23 C C A 9 10 C C 24 25 A A 11 12 13 C A C 26 27 28 B C B 14 15 A C 29 30 A B TOTAL 30 © University of Cambridge International Examinations 2004 9 Paper 1 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations JUNE 2004 GCE A AND AS LEVEL MARK SCHEME MAXIMUM MARK: 90 SYLLABUS/COMPONENT: 9706/02 ACCOUNTING Paper 2 (Structured Questions) 10 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme ACCOUNTING – JUNE 2004 Syllabus 9706 11 Paper 2 AS ACCOUNTING - SUMMER 2004 Al (a) (i) Acid Test (Liquid) Ratio = CA-stock:CL, (ii) Stock turnover = CoGS/Ave stock (iii) Debtors collection period = Debtorsx365/sales (iv) Gross Profit Ratio = GPx100/Sales (v) Net Profit Ratio = NPx100/Sales (vi) ROCE = NP before int x100/Cap employed 2002 2003 1.61 :1 16.43 times 22.21 days 61.64 days 30.00 % 0.30 :1 11,11 % 0.11 12.17 % 0.68 :1 8.40 times 43.45 days 89.43 days 24.17 % 0.24 :1 8.83 % 0.08 :1 12.05 % 1 for each correct ratio to a maximum of If no suffix, award 1 for each correct pair: If answer not to 2 decimal places, but correct working shown, full marks. (b) (12) Acid test worse, due to lack of cash because of expenditure on stock Stockturn worse due to surplus unsold stock Debtors collection worse due to poor credit control. GP ratio worse due to increased cost price not passed on to customer. NP ratio worse due to increased operating expenses. ROCE almost unchanged/slightly worse due to similar rates of change in capital and net profit 2 for each, maximum These answers are not exclusive - use your judgement. © University of Cambridge International Examinations 2004 (12) Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 2 (c) Advantages Mark Scheme ACCOUNTING – JUNE 2004 Show trends Help compare with Syllabus 9706 12 Paper 2 (i) earlier years (ii) other businesses Help decision making Show particular problem areas Maximum (3) Disadvantages Comparisons may be difficult due to (i) changes in the economy (ii) changes in technology (iii) changes in Staff (iv) changes in company policy Reasons for changes are not always obvious Accuracy of information may be a problem Historic cost used - takes no account of inflation Maximum (3) These answers are not exclusive - use your judgement. © University of Cambridge International Examinations 2004 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 3 Mark Scheme ACCOUNTING – JUNE 2004 Syllabus 9706 13 Paper 2 A S ACCOUNTING - SUMMER 2004 - 9706/2 A2 (a) Working for Goodwill Titus $30 000 worth $27 100 worth $45 000 $30 000 Net effect $ $ 15 000 Cr 15 000 Cr 2 900 Cr 2 900 Cr Introduced Titus Ronicus Titus Ronicus Net Ronicus $ 9 000 Dr 6 000 Dr 15 000 Dr 1 740 Dr 1 160 Dr 2 900 Dr 4260 Cr 4 260 Dr Must have same amount total of goodwill on both sides and must cancel out or no marks as Goodwill would otherwise have to appear as an account. Capital Accounts Titus $ Goodwill Balance c/d 49 260 49 260 Ronicus $ 4 260 2 Sundries 25 740 1 Goodwill 30 000 Titus $ 45 000 4 260 49 260 Balance b/d 49 260 Alternative Capital Accounts Titus Ronicus $ $ 1 740 6 000 2 Sundries 49 260 25 740 1 Goodwill 51 000 31 740 Titus $ 45 000 6 000 51 000 Balance bid 49 260 Ronicus $ 30 000 2 2 30 000 25 740 1 OF (8) Goodwill Balance c/d Goodwill BaI cid Titus Ronicus 10 740 7 160 2 Sundries 49 260 25 740 1 Goodwill 60 000 32 900 Bal b/d Titus 45 000 15 000 60 000 Ronicus $ 30 000 2 1 740 2 31 740 25 740 1 OF (8) Ronicus 30 000 2 2 900 2 32 900 49 260 © University of Cambridge International Examinations 2004 25 740 1 OF (8) Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 4 (b) Mark Scheme ACCOUNTING – JUNE 2004 Syllabus 9706 Profit and Loss Appropriation Account for the year ended 30 September 2004 $ $ $ Net Profit 56 000(1) + 1050 (2) 57 050 Interest on Drawings Titus 450 Ronicus 250 700 57 750 Interest on Capital Titus 2 463 Ronicus 1 287 3 750 Partner's Salary Ronicus 20 000 23 750 34 000 Share of Residue Titus 20 400 unless aliens 34 000 Ronicus 13 600 (c) Drawings Int on drawings Goods taken Balance c/d Current Accounts Titus Ronicus $ $ 9 000 5 000 2 Share of Residue 450 250 2 Int on Capital 600 450 2 Salary 12813 29187 1 34 887 22863 Balance b/d Titus $ 20 400 2 463 Paper 2 3 1 Not 2 1 OF 1 OF 1 1 OF 1 OF ______ 22 863 Ronicus $ 13 600 2 1 287 2 20 000 1 ______ 34 887 12 813 29 187 1 © University of Cambridge International Examinations 2004 14 (9) (13) Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 5 Mark Scheme ACCOUNTING – JUNE 2004 Syllabus 9706 15 Paper 2 A/S ACCOUNTING SUMMER 2004 - 9706/2 Hours worked = 30 workers x 30 hours x 50 weeks = 45000 =10 hours/unit = $6/hour A3 $ $ (a) Sales 4500 x 250 1,125,000 1 1 Direct Materials 4500 x 35 157,500 Direct Labour 45000 x 6 270,000 2 Variable Costs V Overheads 4500 x 12 54,000 1 Administration 4500 x 14 63,000 544,500, 580,500 Fixed Costs Fixed o'heads 125,000 1 Administrative 70;000 1 1 Advertising 150,000 Total Fixed Costs 345,000 Net Profit 235,500 1 (10) (b)(i) Sales Direct Materials Basic D Labour 5000 extra hours Extra costs VO V Admin 0 Fixed costs 5000 x 250 5000 x 35 4.5000 x 6 5000 x 9 5000 x 1.5 1,250,000 175,000 270,000 45,000 7,500 60,000 70,000 1 1 1 1 125,000 70,000 150,000 345,000 972,500 277,500 Net Profit ) )1 ) 1 +1 of (7) (b)(ii) Sales DM DL VO V Admin 0 Fixed Costs Lease 1,250,000 157,500 270,000 54,000 63,000 345,000 50,000 1 2 939,500 310,500 Net Profit 1 + 1of NB No marks for profit if market research included Due to wording of question, accept any figures in (a) or (b) for variable costs. (b)(iii) Sales 1,250,000 DM 157,500 DL 270,000 VO 54,000 V Ad O 63,000 Fixed Costs 345,000 500 x 200 100,000 Cost of buying in 989,500 Net Profit 260,500 Fixed costs will have to be calculated in most cases. © University of Cambridge International Examinations 2004 (5) 1 2 1 +1of (5) Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations (c) 16 Option 1 Second most profitable option, but could lead to employees expecting overtime in future. Option 2 Market research costs already spent, so no further outlay, and best net profit. But there may be teething troubles and possible re-training problems. Option 3 No additional capital outlay, but possible problems of quality control. Any three relevant points If unit costing used, award where correct. (3) Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations 17 Grade thresholds for Syllabus 9706 (Accounting) in the June 2005 examination. maximum mark available Component 1 30 minimum mark required for grade: A B E 20 18 12 The thresholds (minimum marks) for Grades C and D are normally set by dividing the mark range between the B and the E thresholds into three. For example, if the difference between the B and the E threshold is 24 marks, the C threshold is set 8 marks below the B threshold and the D threshold is set another 8 marks down. If dividing the interval by three results in a fraction of a mark, then the threshold is normally rounded down. Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations JUNE 2005 GCE AS/A LEVEL MARK SCHEME MAXIMUM MARK: 30 SYLLABUS/COMPONENT: 9706/01 ACCOUNTING Paper 1 (Multiple Choice Core)) 18 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 Mark Scheme GCE AS/A LEVEL – JUNE 2005 Syllabus 9706 Question Number Key Question Number Key 1 2 3 4 5 B C C B B 16 17 18 19 20 B C C D D 6 7 8 9 10 D B A A A 21 22 23 24 25 B D C B D 11 12 13 14 15 A D B A B 26 27 28 29 30 B C C C B © University of Cambridge International Examinations 2005 Paper 1 19 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations 20 UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced/Advanced Subsidiary Level MARK SCHEME for the June 2005 question paper 9706 ACCOUNTING 9706/02 Paper 2 (Structured Questions), maximum raw mark 90 This mark scheme is published as an aid to teachers and students, to indicate the requirements of the examination. It shows the basis on which Examiners were initially instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began. Any substantial changes to the mark scheme that arose from these discussions will be recorded in the published Report on the Examination. All Examiners are instructed that alternative correct answers and unexpected approaches in candidates’ scripts must be given marks that fairly reflect the relevant knowledge and skills demonstrated. Mark schemes must be read in conjunction with the question papers and the Report on the Examination. • CIE will not enter into discussion or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the June 2005 question papers for most IGCSE and GCE Advanced Level syllabuses. Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations 21 Grade thresholds for Syllabus 9706 (Accounting) in the June 2005 examination. maximum mark available Component 2 90 minimum mark required for grade: A B E 66 59 38 The thresholds (minimum marks) for Grades C and D are normally set by dividing the mark range between the B and the E thresholds into three. For example, if the difference between the B and the E threshold is 24 marks, the C threshold is set 8 marks below the B threshold and the D threshold is set another 8 marks down. If dividing the interval by three results in a fraction of a mark, then the threshold is normally rounded down. Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations June 2005 GCE A/AS LEVEL MARK SCHEME MAXIMUM MARK: 90 SYLLABUS/COMPONENT: 9706/02 ACCOUNTING Paper 2 (Structured Questions) 22 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 1 1 (a) Mark Scheme A/AS – June 2005 Syllabus 9706 23 Paper 2 Option 1 – Borrow from bank $ 27 000 15 000 12 000 9 000 3 000 i.e. $1000 each 1of ignore aliens Increased profit less manager’s salary less bank interest Net increase 1 1 1 Each now receives $22 500 + $1000 = $23 500 as new profit 1 (3[1 each]) [8] Alternate method New profit 67 500 + 27 000 less manager’s salary less bank interest 94 500 15 000 79 500 9 000 70 500 23 500 each 2 (1 each) 1 1 1of ignore aliens 3 (1 each) [8] (b) Option 2 – Bring in partner Profit = $67 500 + $27 000 less interest on capital at 7.5% $ Ringo 5 625.00 John 4 500.00 Paul 3 375.00 Georgina 3 375.00 $ 94 500.00 2 marks for Profit share Ringo allow John rounding Paul Georgina 23 287.50 23 287.50 15 525.00 15 525.50 Ringo gets John now gets Paul now gets Georgina now gets 28 912.50 27 787.50 18 900.00 18 900.00 1 1 1 1 individual figures 16 875.00 77 625.00 ignore aliens 1+1of 1+1of 1+1of 1+1of ignore aliens 1of 1of 1of 1of 77 625.00 [18] Profit share = 2 each for correct figure, 1 each if wrong but in correct proportion otherwise 0. (c) Borrowing from bank is better for two partners and as bank interest decreases over the years when loan is being paid back all three will gain more, though John will never be as well off as he would be under option 2. Own figure applies up to a maximum of (4). If reversed, bringing in new partner is worse, as total profit is less and even with new profit-sharing ratios each partner gets less. [Total: 30] © University of Cambridge International Examinations 2005 Compiled by D. El-Hoss All questions copyright of Cambridge International Examinations Page 2 2 (a) Mark Scheme A/AS – June 2005 Syllabus 9706 James Defirst Ltd’s Balance Sheet at 31 May 2005 $ $ Cost $ $ Deprec- Net Book iation Value 15 000 60 000 47 040 12 960 30 000 16 200 13 800 90 000 63 240 41 760 Fixed assets Goodwill Motor vehicles Equipment Current assets Stock 1 Debtors 78 000 less provision for doubtful debts 3 900 2 Bank 1 Amounts due within 1 year Creditors Proposed dividend Net current assets 1 1 Capital and reserves Authorised capital 100 000 ordinary shares of $1 each Issued capital 75 000 ordinary...
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