Cambridge O Level OctoberNovember 2014 7110 21 Cambridge International

Cambridge o level octobernovember 2014 7110 21

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Cambridge O Level – October/November 2014 7110 21 © Cambridge International Examinations 2014 (b) Income Statement for the year ended 31 July 2014 $ $ Revenue 505 000 (1) Inventory of finished goods at 1 August 2013 40 000 Production cost 315 000 (1of) Drawings by owner (7 500) (1) 347 500 Inventory of finished goods at 31 July 2014 (42 500) Cost of sales (305 000) (1of) Gross profit 200 000 Less Insurance (6200 – 1200 = 5000 × 20%) 1 000 (1) Rent (11 000 × 20%) 2 200 (1) Office wages and salaries 56 000 (1) Selling expenses 19 600 (1) Distribution costs 31 500 (1) Sundry office expenses (19 800 – 1400) 18 400 (1) Loan interest (3500 + 1300) 4 800 (1) Provision for depreciation on office equipment 5 500 (1) Bad debts 3 000 (1) Increase in provision for doubtful debts 700 (1) (142 700) Profit for the year 57 300 [14]
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Page 11 Mark Scheme Syllabus Paper Cambridge O Level – October/November 2014 7110 21 © Cambridge International Examinations 2014 (c) Statement of Financial Position at 31 July 2014 Cost Aggregate depreciation NBV $ $ $ Non-current assets Machinery 125 000 85 000 40 000 (1of) Office fixtures 55 000 22 000 33 000 (1of) 180 000 107 000 73 000 Current assets Inventory: – Raw materials 17 500 – Work in progress 26 000 – Finished goods 42 500 86 000 (1) Trade receivables 55 000 Less: provision for – doubtful debts 2 200 (1) 52 800 (1of) Other receivables (1400 + 1200) 2 600 (1) Bank 27 700 (1) 169 100 Less: current liabilities Trade payables 71 000 (1) Other payables 1 300 (1) (72 300) Net current assets 96 800 (1of) 169 800 Non-current liabilities 8% loan (repayable 31 May 2024) (60 000) (1) 109 800 Capital 80 000 Plus: Profit for the year 57 300 137 300 Less: Drawings (20 000 (1) + 7500 (1) ) (27 500) 800 109 [13] [Total: 40]
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