Accounting 9706/04 Oct Nov 2004 | Cambridge AS Level Past Papers With Mark Scheme

1. Redemption and share issuance adjustments: Preparation of Rengaw Ltd’s Balance Sheet after debenture redemption and share issuance, calculation of reserves and equity adjustments, and provision for redemption premiums.
2. Cash budgeting and liquidity management: Preparation of a four-month cash budget for Rengaw Ltd, analysis of sales forecasts, credit terms, and operational expenses, and evaluation of actions to prevent exceeding bank overdraft limits.
3. Financial performance and cash flow analysis: Calculation of Ragle Ltd’s operating profit, reconciliation to net cash flow from operating activities, and preparation of cash flow statement. Assessment of bank balance changes and importance of cash flow statements for shareholders.
4. Investment appraisal and cost analysis: Calculation of net present value (NPV), internal rate of return (IRR), and accounting rate of return (ARR) for Relham Ltd’s new product. Budgeted profit analysis based on production costs and pricing strategy.
5. Variance analysis and performance evaluation: Calculation of direct materials usage, price variances, direct labour efficiency, and rate variances for Relham Ltd’s new product, comparing standard costs to actual performance.
6. Costing and profitability analysis: Detailed preparation of Manufacturing, Trading, and Profit and Loss Accounts for the new product, considering production costs, revenue, and factory profit margins.