OCD17
UNIVERSITY OF BOLTON
OFF CAMPUS DIVISION
BANKING UNIVERSITY HCMC
N
BSC (HONS) BUSINESS MANAGEMENT
IO
SEMESTER ONE EXAMINATIONS 2023/2024
AT
FINANCIAL ACCOUNTING AND THE REGULATORY
FRAMEWORK
MODULE NO: BMP6044
IN
AM
Date: Friday 5th January 2024 Time: 2 hours
EX
INSTRUCTIONS TO CANDIDATES: There are THREE questions on this
paper.
Answer ALL THREE questions.
Candidates can bring two sheets of
ST
A4 paper with personal notes. You
should write your student number
on top of each sheet and submit it
with your answer booklet.
PA
Use of calculators is allowed.
Full workings must be shown.
Page 2 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
Question 1
N
John prints and publishes study materials. John prepared the following trial
balance as at 30 June 2023:
IO
Dr Cr
$ $
AT
Purchases 60,000
Inventory at 1 July 2022 10,000
Sales 120,000
Distribution costs 13,200
Administrative and selling expenses
Trade receivables
IN 5,600
12,200
Irrecoverable debts 1,550
AM
Bank balance 4,150
Capital account at 1 July 2022 73,100
Discount received 2,500
6% Bank loan 10,000
Non-current assets at carrying amount 102,500
EX
Capital introduced in the year 5,000
Loan interest paid 300
Drawings 8,000
Trade payables 5,600
Wages 15,000
ST
Suspense 8,000
––––––– –––––––
228,350 228,350
––––––– –––––––
PA
QUESTION 1 CONTINUED OVER PAGE
PLEASE TURN THE PAGE
Page 3 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
QUESTION 1 CONTINUED
N
The following is to be taken into account.
1 Inventory valuation at 30 June 2023 was $12,000.
IO
2 John decided to write off an irrecoverable debt of $1,000. This should be
accounted for as an administrative and selling expense.
3 The wages cost should be split equally between cost of sales and
AT
administrative and selling expenses.
4 The bank loan was taken out on 1 July 2022.
5 The depreciation charge for the year of $5,000 on property, plant and
equipment has not yet been accounted for. It should be classified as a
cost of sale. IN
Required:
a) Prepare the statement of profit or loss for the year ended 30 June
AM
2023, together with the statement of financial position as at 30
June 2023 on behalf of John.
(30 Marks)
EX
b) Critically evaluate the objective and the reasons to prepare a bank
reconciliation statement highlighting the differences between the
bank statement and the ledger account.
(10 Marks)
ST
Total 40 Marks
PA
PLEASE TURN THE PAGE
Page 4 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
Question 2
N
VST Co made a gross profit of $239,000 in the year to 31 August 2023. Expenses
amounted to $159,000 which included interest of $30,000 payable on a long-term loan,
depreciation on plant of $50,000, and depreciation on premises of $25,000. Income
IO
tax in profit or loss was $10,000 and dividends paid in the year were $45,000.The
statements of financial position of VST at 31 August 2023 and 2022 were as follows:
2023 2022
AT
$000 $000 $000 $000
Non-current assets
Premises 1,200 1,170
Plant and machinery 800 700
IN ––––– –––––
2,000 1,870
Current assets
Inventory 450 550
Receivables
AM
700 680
Bank and cash 300 1,450 – 1,230
––––– ––––– ––––– –––––
3,450 3,100
––––– –––––
Capital and reserves
EX
Ordinary shares of $1 each 1,800 1,300
Share premium 400 300
Retained earnings 392 367
––––– –––––
2,592 1,967
ST
Non-current liabilities
Loan notes 200 400
Current liabilities
Payables 648 681
PA
Income tax 10 12
Bank overdraft – 658 40733
––––– ––––– –––––
–––––
3,450 3,100
––––– –––––
QUESTION 2 CONTINUED OVER PAGE
PLEASE TURN PAGE
Page 5 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
QUESTION 2 CONTINUED
N
During the year ended 31 August 2023, plant which had cost $85,000 was sold at a
loss of $10,000. The sale proceeds were $50,000. The loss was recognised in profit
IO
or loss as part of expenses $159,000.
Required:
AT
a) Prepare a statement of cash flows for the year ended 31 August 2023,
using the indirect method of presentation.
(30 Marks)
IN
AM
EX
ST
PA
PLEASE TURN PAGE
Page 6 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
N
IO
Question 3
The financial statements of Jimmy Co for the year ended 31 July 2023, with
comparatives, are presented below.
AT
Statement of profit or loss and other comprehensive income – year ended 31
July
2023 2022
$000 $000
Revenue
Cost of sales
IN 1,391,820
(1,050,825)
1,159,850
(753,450)
––––––––– –––––––––
Gross profit 340,995 406,400
AM
Operating expenses (161,450) (170,950)
Finance costs (10,000) (14,000)
––––––––– –––––––––
Profit before tax 169,545 221,450
Tax (50,800) (66,300)
EX
––––––––– –––––––––
Profit for the year 118,745 155,150
Other comprehensive income:
Revaluation surplus on land and buildings 10,000
––––––––– –––––––––
ST
Total comprehensive income for the year 128,745 155,150
––––––––– –––––––––
PA
QUESTION 3 CONTINUED OVER PAGE
PLEASE TURN PAGE
Page 7 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
QUESTION 3 CONTINUED
N
Statement of financial position at 31 July
IO
2023 2022
$000 $000
Non-current assets
AT
Property, plant and equipment 559,590 341,400
Current assets
Inventory 109,400 88,760
Receivables 419,455 206,550
Bank IN 95,400
––––––––– –––––––––
1,088,445 732,110
––––––––– –––––––––
Equity and reserves
AM
Equity shares, $1 140,000 100,000
Share premium 40,000 20,000
Revaluation reserve 10,000
Retained earnings 406,165 287,420
––––––––– –––––––––
EX
596,165 407,420
Non-current liabilities
10% Bank loan 61,600 83,100
Current liabilities
Payables 345,480 179,590
ST
Bank overdraft 30,200
Taxation 55,000 62,000
––––––––– –––––––––
1,088,445 732,110
PA
––––––––– –––––––––
QUESTION 3 CONTINUED OVER PAGE
PLEASE TURN PAGE
Page 8 of 8
University of Bolton - Off Campus Division
Banking University HCMC
BSc (Hons) Business Management
Semester 1 Examination 2022/2023
Financial Accounting and the Regulatory Framework
Module No. BMP6044
QUESTION 3 CONTINUED
N
Required:
1. Calculate the following ratios of Jimmy Co for the year ended 31 July 2023
IO
and 2022:
a) the return on capital employed
b) gross profit margin
AT
c) operating profit margin
d) asset turnover
e) current ratio
f) acid test ratio
g) inventory holding period
IN
h) trade receivables collection period
AM
i) trade payables payment period
j) debt-equity ratio
k) gearing ratio
l) interest cover
EX
(2 Marks each, total 24 Marks)
2. Critically evaluate the performance of Jimmy Co upon the profitability,
liquidity, efficiency and gearing based on the above ratio analysis.
(6 Marks)
ST
Total 30 Marks
PA
END OF QUESTIONS
END OF PAPER
