Alice made a profit for the year of $345,687 and has closing net assets of $435,195. During the financial year, capital of $60,000 was introduced which consisted of $40,000 in cash and $20,000 in non-current assets. Drawing of $6,000 were taken out of the business each month. What was the opening balance of net assets?

ACCOUNTING
1)
A business produces three products, X, Y and Z. Each of these products require
the same material, which is a scarce resource. The following data relates to the three
products:
 

Per unit:  X Y Z
Selling price 300 200 180
Material ( $10 per kg) -30 -40 -20
Labor ($5 per hour) -50 -30 -10
Variable overheads -40 -30 -20
Fixed overheads -30 -25 -20
Profit 150 75 110

 
In what order should the products be manufactured in order to ensure profit is
maximised?

  1. X Y Z
  2. X Z Y
  3. Z X Y
  4. Y Z X

 
2)
XYZ Co is a successful business, supply a variety services, such as web design,
advertising and commercial consulting services. The Board of Directors are aware of
each service required core and unique competence and different corporate strategies.
Jack, one of directors and a major shareholder, is considering to use a business
structure to allow every part of business can complete all functions from R&D and sale
separately, high degree autonomy, in order to expand market share effectively in the
future.
Which of business organization structure is the most appropriate from Jack’s point of view?

  1. Divisionalisation
  2. Entrepreneurial organisation
  3. Functional specialisation
  4. Matrix

3)
Alice made a profit for the year of $345,687 and has closing net assets of $435,195. During the financial year, capital of $60,000 was introduced which consisted of $40,000 in cash and $20,000 in non-current assets. Drawing of $6,000 were taken out of the business each month. What was the opening balance of net assets?
4)
An inexperienced bookkeeper has drawn up the following payables ledger control account, which contains errors:
What should the closing balance be after correcting the errors made in preparing the account?
5)
A government follows an expansionary monetary policy. How would this typically affect businesses?

  1. Higher demand from customers, lower interest rates on loans and increased availability of credit
  2. A contraction in demand from customers, higher interest rates and less available credit
  3. Lower taxes, higher demand from customers but less government subsidies/available contracts
  4. Lower interest rates, lower exchange rates and higher tax rates

One of your audit clients is Dawson Co (Dawson). The audit fieldwork for Dawson is complete. Once again the audit senior has raised an outstanding issue.
Dawson’s computerised wages program is backed up daily, however for a period of two months the wages records and the back-ups have been corrupted, and therefore cannot be accessed.
Wages and salaries for these two months are $1.1m. Profit before tax is $10m.
Which of the following correctly summarises the effect of the issue relating to wages?
Material                                Financial statement impact
A                      No                                                        Liabilities to tax authorities may be understated
B                      No                                                        Profit may be overstated
C                      Yes                                                       Wages may be materially misstated
D                      Yes                                                       Proper accounting records have not been kept
7)
Based on the above information which of the following options correctly summaries the impact of the wages and salaries issue on the auditor’s report?
Audit opinion                                                            Disclosure in the auditor’s report
A                      Qualified                                                                                 Basis for qualified opinion
B                      Disclaimer                                                                               Basis for disclaimer of opinion
C                      Qualified                                                                                 Key audit matters section
D                      Qualified                                                                                 Emphasis of matter
8)

  1. Calculate the after-tax cost of debt of NN Co.
  2. Calculate the weighted average after-tax cost of capital of NN Co.
  3. C) Discuss the factors to be considered in formulating the dividend policy of a stock-exchange listed company.

 
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