Accounting 9706/02 May June 2004 | Cambridge AS Level Past Papers With Mark Scheme

1. Financial ratios and performance analysis: Calculation of acid test ratio, stock turnover, debtors collection period, gross profit ratio, net profit ratio, and return on capital employed for Jarvis, Cocker and Co Ltd for two years. Evaluation of changes in company performance based on ratio analysis.
2. Partnership capital and current accounts: Preparation of capital accounts for Titus and Ronicus, adjustments for interest on capital, drawings, and partnership salary, and calculation of goodwill adjustments.
3. Profit distribution and appropriation account: Preparation of Partnership Profit and Loss Appropriation account for the year, allocation of net profit, and adjustments for partners’ goods taken for personal use.
4. Production cost analysis and net profit calculation: Calculation of production costs for 4500 units for Bilanben Ltd, assessment of fixed and variable overheads, and net profit determination for the year ended 31 December 2003.
5. Profitability assessment of production options: Evaluation of three options for increasing production to 5000 units—introducing overtime, hiring new machinery, or buying in extra units. Profitability analysis and comparison of the financial implications of each option.
6. Decision-making and cost-benefit analysis: Comparative statement of profitability for the three options, analysis of cost-effectiveness, and strategic recommendations based on financial outcomes and operational efficiency.