Accounting and Finance for Business by Mr Geoff Black, Mahmoud Al-Kilani | 9780273773948 | 0273773941 | Holooly

Accounting and Finance for Business [EXP-50032]

179 SOLVED PROBLEMS

Question: 7.st.3

‘A company that regularly shows net cash outflows in its annual cash flow statements will inevitably fail’. Discuss.

Verified Answer:

The answer depends upon the reasons for continual ...

Question: 6.st.1

‘A partnership is just a collection of sole proprietors.’ Discuss this statement.

Verified Answer:

A partnership is not a collection of sole propriet...

Question: 2.st.3

(This is a basic example, with neither a Payables Ledger nor a Receivables Ledger needed.) From the following transactions of Rachel Roberts, write up a cash book showing cash and bank transactions and ledger accounts for all other transactions. Prepare a trial balance at 7 October.

Verified Answer:

Cash Book Bank account Cash account Date Det...

Question: 3.st.3

A business property is rented at £2,500 per month. During the year ended 31 December 2013 the business paid 15 months rent, 4 months of which related to rent owing on 1 January 2013. One month’s rent was owing on 31 December 2013.

Verified Answer:

(a) Accruals are additional expenses incurred duri...

Question: 11.st.5

A company manufactures and assembles storage units. The standard output of its employees is 16 units per person in an eight hour day. There are two production lines, A and B, each of which has 10 employees. Workers on production line A are paid £7 per hour,

Verified Answer:

(a) Production line A Overall direct labour varian...

Question: 10.4

A company produces 2,000 units of Yogies and 800 units of Zeldas each month. Direct materials cost £2 per unit for Yogies and £4 per unit for Zeldas. One hour of direct labour charged at £16 per hour is needed to produce one unit of each product. The total overheads for the company are £8,400 per m

Verified Answer:

The selling prices are: Yogies £29.40 per unit, Ze...

Question: 10.3

A company with three different product lines, X, Y and Z, selling for £6, £5 and £4 each respectively, incurs a £9,000 advertising cost to get the company’s name publicised. Unit sales of the products are in the proportions X 25%, Y 35% and Z 40%, and annual turnover is £242,500, split X £75,000, Y

Verified Answer:

The correct answer is (c), as this recognises both...

Question: 14.6

A firm has a choice of three projects, L, M and N. Each requires an investment of £15,000, and forecast cash flows are as follows:

Verified Answer:

The payback periods of each project are as follows...

Question: 14.4

A firm has the choice of three machines, H, I or J, but it can afford only one. Interest rates are 10% p.a. Machine H costs £10,000; machine I costs £13,000; machine J costs £15,000. Forecast cash inflows are as follows (£):

Verified Answer:

The NPVs of the three machines can be calculated a...

Question: 10.12

A hospital has incurred costs of £3,600,000 during July and 8,000 patient-beds have been occupied during the month. What is the cost per patient bed?

Verified Answer:

\frac{£3,600,000}{8,000} = £450

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