You are the assistant accountant with BEST EVER Ltd.Your boss has asked you to prepare the draft Income Statement,Statement of Financial Position and Statement of
Changes in Equity for the year ended 31December 2014,for internal use,based on
the following Trial Balance (extracted from the computerized record keeping system)
and the additional information shown below.
The company’s authorized share capital is as follows:
l 2,000,000 Ordinary Shares of £1 each
l 1,500,000 7% Preference Shares of £1 each
DR CR
£000 £000
Profit & Loss Account (1 January 2014) 182
Revenue 5,250
Purchases 3,600
Inventory 220
Debtors 40
Creditors 38
Wages & Salaries 720
Administrative Expenses 540
Auditor’s fees 26
Heating & Lighting 43
Rent & Rates 137
Premises 2700
FixtureandFittings(NBV@31/12/2013) 730
MotorVehicles(NBV@31/12/2013) 380
Provision for Depreciation (1 January 2014)
Fixtures & Fittings 146
Motor Vehicles 152
Ordinary Share Capital 2,000
7% Preference Share Capital 1,500
General Reserve 300
Cashandcashequivalents 432
9,668 9,668
<pclass=”msonormal” style=”margin-bottom: 0.0001pt; line-height: 11.1pt;”>Additional Information
1 Clerical and management staff we reawarded a bonus amounting to£4,000 in
mid-December2014.This bonus has not been paid yet andit should be
classifiedasanadministrativeexpense.
2 Rent & Rates include £8,000 which relates to the coming year.
3 Closing inventory at 31 December 2014 was valued at £280,000.
4 It is estimated that corporation tax of £8,000 will bepayable on the profits for the year.
5 Preference Dividend should for the year should be provided in full.
6 An Ordinary Dividend of 15p per share is proposed.
7 Thedirectorsproposetoprovideforthe depreciation of non-current assets for the
yea as follows:
Fixtures and Fittings @ the rate of 20% per annum using the straight-line method
MotorVehicles @ the rate of 20% per annum using the straight-line method
8 Transfer £8,000 to the General Reserve.
Also read:
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D) Both statements are false. 18. Banks can A) create money, but not destroy money. B) destroy money, but not create money. C) create and destroy money. D) neither create nor destroy money. 19. The Federal Open Market Committee is made up of all of the following, except A) the board of governors. B) the chairman of the board of governors. C) the president of the United States. D) the president of the Federal Reserve Bank of New York. E) the presidents of four Federal Reserve Banks other than the New York Bank. 20. The Federal Reserve System A) has regional Federal Reserve Banks that make most of the decisions. B) makes decisions subject to the approval of the President. C) makes its major policy decisions in its Open Market Committee. D) makes decisions subject to the approval of Congress. 21. With economic development comes each of the following, except A) a decline in the birth rate. B) an increase in the stock of capital. C) rising per capita GDP D) a declining wage rate. 22. Our educational standards today. A) are the highest in history. B) are much higher than they were 50 years ago. C) are the same as they were 50 years ago. D) are much lower than they were 50 years ago. 23. Brazil should be classified as a(n) A) very poor LDC. B) middle-rank LDC. C) NIC. D) industrial country. 24. The most important reason for our slow rate of productivity growth over the last three decades (of those listed below) is A) lagging business sales. B) foreign imports. C) our low savings rate. D) high tax rates. 25. Structural unemployment occurs when A) workers have quit one job and are looking for a better one. B) high school graduates enter the labor market every June. C) the business cycle is in a downturn and people are laid off. D) the people without jobs have skills that don't match the available job openings. 26. Unemployment caused by economic decline or recession is called A) frictional unemployment. B) cyclical unemployment. C) natural unemployment. D) necessary unemployment. E) structural unemployment.. 27. The recession of 2001 was caused by A) the events of 9/11. B) a decline in consumer spending. C) a decline in investment spending. D) the war in Iraq. 28. A budget deficit is the A) annual excess of government spending over revenue raised by taxes, fees, and charges. B) shortfall of Social Security collections toward payment of benefits. C) amount by which tax revenues and borrowed funds fall short of government expenditures. D) excess of tax revenues over expenditures. E) amount by which tax revenues exceed borrowed funds. 29. The consumer price index is created by A) calculating the cost of a "basket" of consumer goods typically bought by an American family in any year as a percentage of their cost in a base year. B) the Congressional Budget Office. C) averaging the price increases for all consumer goods in the GDP and adding 100. D) dividing nominal dollar consumer expenditures by base year consumer expenditures. 30. Statement I: When equilibrium GDP and full employment GDP are equal, there is no inflationary gap and no deflationary gap.Statement II: Equilibrium GDP is an ideal goal that can never be attained. A) Statement I is true and statement II is false. B) Statement II is true and statement I is false. C) Both statements are true. D) Both statements are false. 31. When government expenditures in a given year are less than tax receipts, there exists A) a budget deficit. B) public revenue. C) full-employment taxation. D) a budget surplus .32. As price rises, the quantity ______________ rises. A) demanded B) supplied C) demanded and supplied 33. If the MPC were .75, what change in government spending (in billions of dollars) would be required to cause the equilibrium level of GDP to fall by 100? A) A decrease of 25. B) A decrease of 50. C) A decrease of 75. D) A decrease of 100. E) A decrease of 125. (I will send the image) 34. When price is $8 A) quantity demanded is greater than quantity supplied and, therefore, price must fall to get to equilibrium price. B) quantity demanded is greater than quantity supplied and, therefore, price must rise to get to equilibrium price. C) quantity supplied is greater than quantity demanded and, therefore, price must fall to get to equilibrium price. D) quantity supplied is greater than quantity demanded and, therefore, price must rise to get to equilibrium price. 35. Usury is considered the charging of A) higher interest rates than people are willing to pay. B) lower interest rates than people are willing to pay C) unconscionably high interest rates. D) extremely low rates of interest. 36. The present value of a dollar rises as A) the interest rate declines and the number of years you wait for your money declines. B) the interest rate rises and the number of years you wait for your money rises. C) the interest rate declines and the number of years you wait for your money rises. D) the interest rate rises and the number of years you wait for your money declines. 37. In economics we say the amount of land is A) fixed. B) variable. C) both fixed and variable. D) neither fixed nor variable. 38. Which is not determined by supply and demand? A) The wage rate B) The interest rate C) Rent D) Profits 39. Which of the following is false? A) The supply of land is fixed. B) When the demand for a plot of land rises, its supply will rise. C) Land is most efficiently used in cities. D) The rent on a particular piece of land is based on the MRP schedule of the highest bidder. 40. If you knew that interest rates would be rising, then you would predict that the present value of $1 received 5 years from now A) would be higher. B) would be about the same. C) would be lower. D) could be higher or lower. 41. Changes in rent on a plot of land are chiefly due to A) changes in demand. 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E) rose most years 47.Who expressed this view? "Unlike the present period, (black) inner-city communities prior to 1960 exhibited the features of social organization—including a sense of community, positive neighborhood identification, and explicit norms and sanctions against aberrant behavior." A) Charles Murray B) William Julius Wilson C) Mickey Kaus D) Lisabeth Schorr E) Celia Dugger 48. According to Darity and Myers A) black men are becoming increasingly marginal to our economy B) the basic cause of poverty is welfare dependency C) the best solution to poverty is the negative income tax D) as our economy continues to expand, black poverty will decline (I will send the image) 49. The percentage share of income of the bottom quintile on curve X is A) 0. B) 5. C) 10. D) 15. E) 20. 50. The percentage of people living in poverty in 2006 in the U.S. was _______. A) 6 B) 11.7 C) 12.3 D) 15.2 51. Child poverty is A) much more of a problem in France, Germany, and Japan than it is in the U.S. B) less of a problem in the United States than in Canada, Britain, or Italy. C) more of a problem in Sweden, Denmark, and Ireland than it is in the U.S. D) much more of a problem in the U.S. than in virtually all other industrialized countries. 52. Statement I: Social Security payments help mostly the poor. Statement II: Poverty may be defined as a relative concept and as an absolute concept. A) Statement I is true and statement II is false. B) Statement II is true and statement I is false. C) Both statements are true. D) Both statements are false. 53. Compared to their levels in 1999, the poverty line has ______ and the minimum hourly wage has ________. A) gone up; gone up B) stayed the same; stayed the same C) gone up; stayed the same D) stayed the same; gone up 54. In which year was the poverty rate the lowest? A) 1960 B) 1973 C) 1984 D) 1993 E) 2006 55. Which statement is true? A) Most economists support rent control laws. B) Usury laws and rent control are price ceilings. C) Usury laws have never had any effect because they are set well above interest rates. D) None of the choices. (I will send the image) 56. If price were set by the government at $3, there would be a price _____________, that would cause a ___________ of _______ units. A) floor, surplus, 12 B) floor, shortage, 12 C) ceiling, surplus, 14 D) ceiling, shortage, 14 57. Sue Ann Buchanan, can make $800,000 on the pro tennis tour, but would be willing to do it for $200,000. Her economic rent is A) $200,000. B) $600,000. C) $800,000. D) $1,000,000. 58. Despite their fantastic employment gains, African American men earn ____% of what white men earn. A) 65 B) 55 C) 60 D) 76 59. Since 1996, productivity growth has ________ and real wages have ______. A) risen; risen B) fallen; fallen C) risen; fallen D) fallen; risen. 60. Which statement is false? 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