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ACC40630
Accounting Information for Managers
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Page 1 of 8
Question One
Yeates Company, a retail business, has been trading for some time. The statement of financial
position at 31st December 2014 was as follows:
Non-current assets
Property, plant and equipment
Premises 94,000
Plant & machinery cost 160,000
- depreciation -80,000 80,000
174,000
Current assets
Inventories 42,000
Prepaid expenses 4,000
Trade receivables 29,000
Cash at bank 46,000
121,000
Total assets 295,000
During the year to 31st December 2015 the following total transactions took place:
1. An additional item of machinery was bought for 70,000 and paid for immediately.
2. Sales revenue of 120,000 was made on credit. The inventories sold cost 18,000.
3. Sales revenue of 20,000 was made for cash. The inventories sold cost 4,400.
Page 2 of 8
Question One (continued /over)
7. Electricity bills totaling 14,000 were paid. The bill for the three month period ending
on 31st December 2015 of 3,500 remained unpaid.
10. The business wishes to depreciate all plant and machinery owned at the end of the
year by 25% of its cost value.
Requirements:
(A) Prepare an income statement for the year ended 31st December 2015. (10 marks)
(B) Prepare a statement of financial position as at 31st December 2015. (15 marks)
(Total: 25 marks)
Page 3 of 8
Question Two
The following are the summarised financial statements of Keane Ltd for the past two years.
Keane Ltd.s year end is 31 December 2015.
Non-Current liabilities
Bank loan 42,600 153,340
Current liabilities
Page 4 of 8
Required:
(A) Comment on the financial performance and position of Keane Limited over the two
years using ratios and any other information that you consider appropriate.
(15 marks)
(B) There was no dividend paid in 2014. In 2015 it has been suggested to pay a dividend of
15,000 to the shareholders. Discuss this proposed plan.
(5 marks)
(Total: 25 marks)
Page 5 of 8
Question Three
Anton Ltd is choosing one product to manufacture from the three screens produced in their
technology range. All products are to be sold to retail outlets in Ireland at 25 per unit. The
three products differ in their fixed costs and variable costs per type of technology.
Required:
(A) Compute the break-even point of Anton Ltd in units for each of the three products
laptop screen, tablet screen, and mobile phone screen.
(6 marks)
(B) If Anton Ltd could sell 125,000 units in any of the three products, what is the
budgeted operating income for each of them?
(6 marks)
(C) On Saturday one of the two machines used to make the products broke down and will
not be fixed for three months due to the parts required. There are 2,000 machine
hours available on the working machine and each product requires machining time as
follows:
Page 6 of 8
machine hours
available 2,000
hours
(1) If the company were to choose more than one product to manufacture, recommend
(with an appropriate justification) which products in which quantities should be
manufactured based on the scarce resource of machine hours to ensure profits are
maximised.
(9 marks)
(2) Using the strategy outlined at part 1 above what is the total contribution that will
be made based on this selection.
(4 marks)
(Total 25 marks)
Page 7 of 8
Question Four
Part A
1. Discuss the difference between the four financial statements and their relationship to
one another.
(10 marks)
Part B
Discuss the challenge for the user in reading financial reports taking into consideration
the use of impression management, with reference to relevant academic literature.
(15 marks)
(Total: 25 marks)
Page 8 of 8