SEPTEMBER 2009
NUMERACY & ACCOUNTING
Instructions to candidates:
a) Time allowed: Three hours (plus an extra ten minutes’ reading time at the start – do not write anything during this
time)
b) Answer any FIVE questions with at least TWO questions from each part
c) All questions carry equal marks. Marks for each question are shown in [ ]
d) Non-programmable calculators are permitted in this examination
PART A
1. a) Assume an exchange rate of £1 = 0.95 euro.
i How many pounds would you get for:
475 euros
950 euros
1,240 euros [3]
ii How many euros would you get for:
£475
£950
£1,300 [3]
b) A company sells three products:
Product P at £6 each
Product Q at £4 each
Product R at £8 each
The company gives a trade discount of 20% BEFORE adding 15.0% VAT (sales tax).
Calculate (and show workings) the total invoice value to a customer who buys 80 of Product P, 120 of
Product Q and 90 of Product R. [6]
c) Solve the equations:
i 6x – 4 = 4x – 2
ii x + x/2 = 3 [2 each]
d) An employee is paid £7 per hour for the first 36 hours worked in a week and £9 per hour for any extra hours
worked. The first £100 earned in a week is ‘free of tax’, and all earnings above £100 are taxed at 25%. In
addition all employees pay a standard national insurance contribution of £20.
TASK
Calculate the net pay for an employee who worked 42 hours in a week. You are advised to show your
workings. [4]
2. The following are the values of orders (in £) received on an average day in a sales department:
420 460 540 410 460
670 580 470 650 690
410 560 480 820 720
480 680 570 660 780
570 670 530 660 820
690 770 530 620 720
710 720 830 520 630
610 780 570 630 580
640 530 710 670 630
670 720 680 560 710
TASKS
Starting with £400, group the above figures into intervals of 50 and then:
a) construct a frequency distribution [8]
b) find the arithmetic mean daily sales orders [4]
c) obtain the median [2]
d) draw a histogram to represent your frequency distribution [6]
continued overleaf
3. A company has the following budgeted data (based on making and selling 50,000 units):
$
Sales price per unit 150
Direct material cost per unit 50
Direct labour cost per unit 30
Variable overhead cost per unit 40
Total fixed costs 800,000
TASKS
a) Calculate the contribution per unit. [3]
b) Calculate the breakeven point. [3]
c) Calculate the budgeted profit. [5]
d) Sketch a breakeven graph of the above data. [5]
e) State what the profit would be if only 46,000 units were made and sold. [4]
4. Write notes on FOUR of the following:
a) compound interest
b) the use of pie and bar charts
c) VAT
d) moving averages
e) scatter diagrams
f) discounts [5 each]
PART B
5. The following trial balance was extracted from the books of Monman as at 31 August 2009:
£ £
Capital (01 09 08) 148,000
Drawings 27,000
Equipment at cost 100,000
Vehicles at cost 40,000
Sales 792,000
Purchases 595,000
Salaries 48,000
Business rates 23,000
Communication exps. 9,000
Insurances 16,000
Stock (01 09 08) 57,000
Bank 8,000
Cash 1,000
Debtors 62,000
Creditors 31,000
Depreciation accounts:
Equipment 10,000
Vehicles 5,000
---------- -----------
986,000 986,000
======= =======
NOTES at 31 August 2009:
Stock in hand was valued at £61,000.
Salaries owing amounted to £4,000.
Insurance prepaid amounted to £1,000.
Equipment is to be depreciated by 20% on cost.
Vehicles are to be depreciated at 25% on cost.
TASKS
a) Prepare the trading and profit and loss account for year ended 31 August 2009. [12]
b) Prepare the balance sheet as at 31 August 2009. [8]
continued overleaf
6. The following are the first 12 transactions of a new business:
01 Aug. £35,000 deposited in a business bank account.
01 Aug. Fixed assets purchased for £25,000 – by cheque.
01 Aug. Rent paid £1,000 – by cheque.
02 Aug. Goods for resale purchased £5,000 – by cheque.
05 Aug. Insurance premium paid £1,200 – by cheque.
07 Aug. Stationery purchased for £500 – by cheque.
08 Aug. Goods for resale purchased £2,000 on credit from Kim Ltd.
10 Aug. Wages paid £800 – by cheque.
11 Aug. Goods sold for £3,000 and payment (by cheque) received in full.
13 Aug. Goods for resale purchased £4,500 – by cheque.
14 Aug. Cheque for £1,500 sent to Kim Ltd.
15 Aug. Wages paid £800 – by cheque.
TASKS
a) Write up the above transactions in the ledger accounts. [12]
b) Draw up a trial balance as at the end of 15 August. [4]
c) Explain the purpose of a trial balance. [4]
7. The following information relates to a company which has a 31 December year end:
£ £
2007 2008
Sales 1,600 3,200
Cost of sales 750 1,120
Total expenses 530 990
Total current assets 250 430
Total current liabilities 240 350
Closing stock 70 100
Average stock 75 120
TASKS
a) Calculate the following for BOTH years:
i the gross profit to sales percentage
ii the net profit to sales percentage
iii the rate of stock turnover
iv the current ratio
v the acid test ratio [3 each]
b) Comment on the financial performance over the current year. [5]
8. Write short notes on FOUR of the following:
a) share capital
b) daybooks (or journals)
c) the matching (or accruals) concept
d) depreciation
e) the consistency concept
f) control accounts
g) a partnership agreement [5 each]
© INSTITUTE OF COMMERCIAL MANAGEMENT
