c Discuss two ways to improve the performance of the gift shop 4 Additional

C discuss two ways to improve the performance of the

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(c)Discuss twoways to improve the performance of the gift shop. [4] Additional information The chairman of the club undertook to cover 50% of the deficit arising from the 2015 annual ball. The demand for payment was issued to the chairman on 31 December 2015. REQUIRED (d)Calculate the amount the chairman had to contribute to the club to cover the deficit. [3] [Total: 25]
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42Alpha Limited is a manufacturing business making a single product. Each year it produces and sells 1000 units and the only inventory it keeps is that of raw materials. It provides the following information for the year ended 30 April 2016: $Revenue 95000Inventory of raw materials at 1 May 2015 1000Inventory of raw materials at 30 April 2016 3100Purchases of raw materials 12200Carriage inwards 1100Factory workers’ wages 17500Factory supervisor’s salary 8200Office salaries 8500Rent 8000Factory overheads 9700General office expenses 10000Additional information 1 Rent is allocated 75% to the factory and 25% to the offices. 2 Production is transferred to finished goods at cost plus 25%.REQUIRED (a) Prepare, for the year ended 30 April 2016, (i)the manufacturing account [8] (ii)the income statement. [7] Additional information Management has discovered that general office expenses are 50% fixed and 50% variable with the level of sales. At the start of May 2016 management expected that in the next year the business would only be able to sell 900 units. There are no expected changes to the selling price or costs per unit. There were two options. Option 1 To continue to produce 1000 units and have an inventory of finished goods at the next year end. Option 2 To reduce production to 900 units and continue to have no inventory of finished goods. REQUIRED (b) Calculate the expected annual profit if option 1 is implemented. Start your calculation with your profit from (a)and adjust as appropriate. [5] © UCLES 2016 9706/32/O/N/16
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5 © UCLES 2016 9706/32/O/N/16 [Turn over Additional information The annual profit expected from option 2 was known to be $15 100. REQUIRED (c) Advise the management which of the two options it should implement. Justify your answer. [5] [Total: 25]
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6© UCLES 2016 9706/32/O/N/163Husna had been a sole trader for many years and has decided to retire. Her statement of financial position at 30 June 2016 was as follows: Statement of Financial Position at 30 June 2016 Assets Non-current assets Premises 120000Equipment 14600134600Current assets Inventory 29500Trade receivables 1720046700Total assets 181300Capital and liabilities Opening capital 162100Profit for the year 41600203700Drawings 36000Closing capital 167700Current liabilities Bank 2000Trade payables 1160013600Total capital and liabilities 181300On 30 June 2016 Husna sold her business to FLF Limited. ThestatementoffinancialpositionofFLFLimitedat30June2016beforethesalewasasfollows: Statement of Financial Position at 30 June 2016 Assets Non-current assets Premises 815100Equipment 190900Vehicles 815001087500Current assets Inventory 103600Trade and other receivables 99400Cash and cash equivalents 7100210100Total assets 1297600Equity and liabilities Equity 800000 ordinary shares of $1 each 800000Retained earnings 322500General reserve 80000 $ $
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