Category: Uncategorized

The data relates to two different levels of output in a Alex plc’s finishing department:

• machine hours – Level 1 – 16 000 & Level 2 – 20 000
• Overheads – Level 1 £214,000 & Level 2 – £230,000

What is the amount of fixed overheads?

Select ONE answer:

1. £16,000
2. £64,000
3. £150,000
4. £198,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – 20,000 – 16,000 = 4,000 == > £230k – £214K = £16k / 4,000 = £4 per hour. 16,000 * 4 = £64k == > Therefore £214k – £64k variable overheads = £150k fixed overheads
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex plc issues a 5-year debenture bond of £1M

Interest for years 1 and 2 will be at the rate of 10% per annum, and for years 3, 4 and 5 it will be 12% per annum.

What will be the charge for interest shown in its Income Statement each year?

Select ONE answer:

1. £100k p.a.
2. £100k in Years 1 and 2, and £120k in Years 3, 4 and 5
3. £112k p.a
4. £120k p.a.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The net assets of Lucy Ltd are shown below.

• net assets at original cost – £100M
• net book value – £50M
• fair value – £70M

Alex plc pays £100M cash plus £20M in shares for all the net assets.

What will the annual goodwill amortisation charge be if Alex plc applies a ten year economic life to goodwill?

Select ONE answer:

1. £2M
2. £3M
3. £5M
4. £7M

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > £100M + £20M – £70M = £50M / 10 years === > £5M p.a.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A trader provides the following financial information.

• goodwill – £10,000
• Non-current assets at net book value – £20,000
• current assets – £15,000
• trade creditors – £5,000
• bank overdraft – £2,000

The trader accepts an offer from a company to take over all his assets and liabilities, excluding the bank overdraft.

The trader receives ordinary shares of £1.00 each at a premium of £0.25.

How many shares will the trader receive?

Select ONE answer:

1. 24,000
2. 30,400
3. 32,000
4. 40,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > (£10k + £20k + £15k – £5k) / 1.25 = 32,000 shares
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

A department makes radios.

The production at the end of the month was 1000 units, of which 600 units were completed and 400 units were 50% complete.

production costs for the month

• materials – £60,000
• labour – £30,000
• departmental overheads – £10,000

What is the cost per unit?

Select ONE answer:

1. £100
2. £112
3. £125
4. £150

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > (£60 + £30 + £10) / (600 + 400/2) = £125
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.