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ACCOUNTING FOR MANAGEMNET CONTROL

BEMM 735

REVISION – MOCK EXAM

Question 1.

DT plc is a high street retailer, selling a variety of household goods. The following information has been extracted from the recently published financial statements of DT plc.

DT plc |

STATEMENT OF FINANCIAL POSITION AT 30 APRIL |

| 20x9 | 20x8 | |

| £’000 | £'000 | £’000 | £'000 | |

ASSETS | | | | | |

Non-current assets | | | | | |

Property, plant and equipment | | 1,850 | | 1,430 | |

Current assets | | | | | |

Inventory | 640 | | 490 | | |

Accounts receivable | 1,230 | | 1,080 | | |

Cash | 80 | 1,950 | 120 | 1,690 | |

| | | | | |

Total assets | | 3,800 | | 3,120 | |

| | | | | |

EQUITY AND LIABILITIES | | | | | |

Capital and reserves | | | | | |

Ordinary share capital | 800 | | 800 | | |

Reserves | 1,245 | 2,045 | 875 | 1,675 | |

| | | | | |

Non-current liabilities | | | | | |

10% debentures | | 800 | | 600 | |

Current liabilities | | | | | |

Bank overdraft | 110 | | 80 | | |

Accounts payable | 750 | | 690 | | |

Taxation | 30 | | 20 | | |

Dividends | 65 | 955 | 55 | 845 | |

| | | | | |

Total equity and liabilities | | 3,800 | | 3,120 | |

| | | | | |

DT plcEXTRACTS FROM INCOME STATEMENT FOR THE YEAR ENDED 30 APRIL |

| 20x9 | 20x8 |

| £’000 | £'000 |

Sales | 11,200 | 9,750 |

Cost of sales | (8,460) | (6,825) |

| | |

Profit before tax | 646 | 444 |

Income tax expense | (181) | (124) |

Profit for the period | 465 | 320 |

| | |

Profit is arrived after charging: | | |

Depreciation | (360) | (280) |

Debenture interest | (80) | (60) |

Interest on bank overdraft | (15) | (9) |

Audit fees | (12) | (10) |

| | |

The following...