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Question One А Build Lid sold a property to Hotel Chain under a hire purchase agreement on 19 January 2006. Under the agreement, Hotel Chain was to pay 20% of the cash price as deposit upon handing over and the remainder was to be paid in six instalments on 31 December of each year. The true rate of interest on the outstanding balance was 10%. The cash price component of each instalment was agreed at GHS130,000.00 GHS100,000.00, GHS 80,000.00, GHS60,000.00, GHS40,000 and GHS30,000.00 for 2006, 2007, 2008, 2009, 2010 and 2011 respectively. Build Ind built the warehouse at the cost of GHS440,000.00 Required 1. Determine the cash price of the agreement,(assume a cash price of GHS555,000 fura penalty of 4 marks) il Calculate the marin, Determine the H Pinterests iv. Determine the annual jnstalments, V. Determine the provision for unrealized profit at the end of each year. (10 marks) SpaceBuild sold an aircraft under hire purchase agreement to Budget Air. The cash price is GHS600,000 and the deposit upon delivery on 1 January 2015 is GHS150,000. SpaceBuild manufactured the aircraft at a cost of CHS450,000. You are provided the following additional data Terms in agreement Provision for Year Instalment HP Interest unrealised profit GHS GHS GHS 2015 195 45 60 2016 150 30 36 Required In the books of Budget Air, rcord the transactions in SpaceBuild Account Hire Purchase interest Payable Account, and in the books of SpaceBuild show. 6. Provision for Unrealised Profit Accounts d. Hire Purchase Trading Account for 2015. (Budget Air does not keep the HP Interest Payable Suspense Account 110 mark) Page 1 of 4
Question two Aps, an author of a book, arranged with Novels & Co to publish and sell the book. Novels & Co can sublet the right. It was agreed that Agya be paid a royalty of GHS 20,00 per each book published and sold and an annual minimum guaranteed payment based on an output of 20,000 copies. Novels & Co con recover shortworking in subsequent years. Agya, whose financial year ends on 31 December, is paid 3P" January 9ov, ou Novels & Co sublet the copyright to Read & Co on the terms that Novels & Co be paid a royalty of GHS 25,00 per copy published and sold subject to an annual minimum payment of GHS 200,000.00. Read & Co can recover shortworkings in subsequent years and must make payment on 31 January. The number of books published and sold over the first four years is provided below. Output Novels & Co Read & Co Year Copies Coples 2007 15.000 2008 14.000 4,000 2009 18.000 7.000 2010 20.000 10.000 Required Complete the table below in the books of Novels & Co. In the books of Novels & Co Royalties Royalties Shortwokings Shortworkings Year Payable Receivable Recoverable Allowable GHS GHS GHS GHS 2007 2008 2009 2010 (4.8 marks) B Assume the same agreements in A. Novels & Co gives you the following transactions from her books. In the books of Novels & Co Royalties Payable Royalties Year Novels & Co Read & Co Receivable Recoverable Shortwokings Shortworkings Allowable GHS GHS GHS GHS GHS 2011 280,000 100,000 2012 440,000 125,00 20,000 75,000 200,000 Required 250,00 Complete the following accounts in the books of Novels & Co. Royalties Payable account b. Royalties Receivable account, c. Agya account. d. Read & Co account. (9.2 marks) Page 2 of 4
hd Now posun pie Nine AC I December playa GIS 20.00 Red ay Theme Oerst three Fool & Coconued 100 of the fish to Creata cost of OHC1,000 per crate plus mark war 25. on 01.01.2000 Feed & Co paid for freight of GHC5,000 and insurance of OHC 1.500 Serche de condimento 20.01.2020 and paid for landing charges of GHC 1.800 and carriage GHC2,000 While off-londing the crates the cold , Scrates destroyed and were disposed of hay at no cost Store puid for Norge cost of GHC.200 med distribution costs of GH 62.000 o 2202 3:20. Feed & Co received an Account Sales from Store showing that the debt owed by a 24 byer of 2 ct could not be recovered and 10 crates remained in stock. The rest of the cries had been for GH CI.500 per crate. Stone took a commission of 5% Required Calculate the invoice price of a crate (i mari) Calculate the number of res soldi mark Caetate sales comar) 1. Calculate the common camed by som mark) Determine stock fossfost plus relevant expense marks) Determine closing stock (cont plus relevant experie23 marks) (Show workings) (marks) Aame the same facts as in A above. Further assume that the invoice value of stock lous is GHC6,250, the invoice value of closing stock is GHC12,500, the invoice value of the consignment is GHS125,000 and expenses on Mock loss is 515. Required Show Goods Santos Consignment Consignment Stock ale 6. Consignment Stock adjustment ac. Stock Ross (6 marko her box kings Question four Drink Lad selle liquor in special barrels. It purchases the barrels at GHC15 each but the barrels are valued at GHCL2 cach for sock purposes. Drinks Lid invoices of charges out the barrels to customers CHCI each and refunds GHICI6 for each barrel that is returned within one month. Any barrel sol received within one month is deemed to have been retained On 1 Tuly 2014 Drinks Lid had 2.000 burses in the warehouse and 4.500 barrels with customers. On the game date Drinks Ledowed the supplier of the burrels GHC9.ogo. During the month ended 31 July 2014 the following transaction in barrels occurred 60,000 barrels were charged out to customers il 56.500 barrels were returned within a month il 4,100 new buses were supplied iv. 2.500 barrels were not returned by custo Liquor Lid paid GHC64.500 to the supplier VE The supplier of the barrels was owed GHC6,000 vii Repairs of GHC30,000 was made on the banels 600 barrels were scrapped and sold for GHC3 each Al be end of the month. 2,000 barrels were with Drinks Lad whilst 5.500 barrels were with customer Page 3 of 4 Plaf 4