MANAGEMENT FOUNDATION STUDIES
\nINDIVIDUAL ASSIGNMENT (2)
\nIntake\/Semester : 67th \/ 1st
\nSubject : Principles of Accounting and Business Finance
\n_______________________________________________________________
\nINSTRUCTIONS :
\n1. Refer to APPENDIX A for the Individual Assignment.
\n2. Date of submission of written assignment:
\n28 November 2022 (12pm) \u2013 5 December 2022 (11.59am)
\nMarks will be deducted for late submission.
\n3. Each written assignment will be marked out of 100 marks and counts for
\n20% of the total assessment of the course.
\n4. FORMAT OF WRITTEN PROJECT
\nPlease note the following technical requirements:
\na. Font & Size : Times New Roman & Size 12. Single spacing
\nb. Colour : Black (for text)
\nc. Paper : White
\n2
\nAppendix A
\nAnswer ALL questions.
\nQuestion 1 (35 marks)
\nMelissa operates a photocopying business in a shopping plaza. The following are
\ntransactions for the month of March 2022.
\n(a) Melissa started her business with $80,000 from her personal savings and $20,000
\nfrom a loan from her sister.
\n(b) Furniture of $12,000 was bought from Courts Ltd. Melissa paid one-half of the
\namount with a personal cheque and the remainder to be paid one month later.
\n(c) A laptop of $2,900 was bought on credit from Fax Ltd.
\n(d) An invoice of $9,500 was sent to Law Co. for bulk photocopying services.
\n(e) Melissa issued a cheque of $6,000 to pay office rent.
\n(f) Melissa received a cheque of $480 for photocopying documents for a walk-in
\ncustomer.
\n(g) Received a cheque from Law Co. as full payment.
\n(h) Melissa withdrew $800 cash from the bank for personal use.
\n(i) Courts Ltd. was paid with a cheque for the remaining balance.
\n(j) A bank loan of $50,000 was taken to purchase more photocopying machines.
\n(k) Salaries of $8,700 were paid by cheque to her employees.
\n(l) Melissa withdrew $400 cash from the bank for office use.
\n(m) Another laptop of $3,100 was bought, payment by cheque.
\nRequired:
\n(i) For each of the above transactions, write the accounts and amounts to be debited
\nand credited. (28 marks)
\n(ii) Compute the amount of cash at bank as at 31 March 2022 of Melissa\u2019s business.
\n(Workings are to be shown clearly). (7 marks)
\n3
\nQuestion 2 (20 marks)
\nMark Trading\u2019s Cash Book (Bank columns only) for the month of April 2022 was as
\nfollows:
\nDr. Cheque No Cr.
\n2022 $ 2022 $
\nApril 1 Bal 8,600 April 8 George 200110 5,190
\n3 Cash 1,360 13 Jill 200112 2,370
\n10 Daisy 2,080 23 Chris 200116 10,100
\n18 Cash 4,864 28 Petty
\nCash
\n200117 200
\n23 Esther 770
\n30 Cash 200
\nApril 30 Bal 14
\nThe following Bank Statement was received in early May 2022:
\nBank Statement Payments Receipts Balance
\n2022 $ $ $
\nApril 1 Balance brought forward 8,700
\n4 Cheque No: 200107 1,000 7,700
\n5 Cash 1,360 9,060
\n6 Error corrected \u2013 29 Mar 900 9,960
\n10 George 5,190 4,770
\n12 Banker\u2019s Order \u2013 Office Insurance 1,300 3,470
\n12 Daisy 2,080 5,550
\n15 Credit transfer \u2013 Donald 510 6,060
\n20 Cash 4,864 10,924
\n25 Chris 10,100 824
\n30 Petty Cash 230 594
\n30 Interest on Structural Deposit 185 779
\nAdditional information:
\nIt was discovered that the bookkeeper of Mark Trading had recorded the transaction on
\n28 April 2022 wrongly.
\nRequired:
\n(a) Bring the Cash Book up to date. (8 marks)
\n(b) Prepare a Statement to reconcile the difference between your amended Cash
\nBook balance and the balance in the Bank Statement on 30 April 2022.
\n(8 marks)
\n(c) Explain the following in your own words:
\n(i) Banker\u2019s order;
\n(ii) Credit transfer.
\n(4 marks)
\n4
\nQuestion 3 (35 marks)
\nSand Ltd. is a production firm with two production departments Cutting and Finishing.
\nBudgeted overhead costs for the first quarter of 2022 are listed below:
\nProduction Departments
\n$
\nCosts allocated: Cutting 36,100
\nFinishing 15,600
\n$
\nOther overhead costs: Factory rent & rates 80,000
\nPower 20,000
\nFactory insurance 24,000
\nOther information:
\nFloor Area Power Usage (%) No. of Personnel
\nCutting Department 40,000 40% 40
\nFinishing Department 60,000 60% 30
\nCutting Department is machine-intensive while Finishing Department is mainly labour\u0002intensive.
\nMachine Hours Direct Labour Hours
\nCutting Department 30,000 10,000
\nFinishing Department 10,000 40,000
\nRequired:
\n(i) Calculate the overhead absorption rate in each department by completing the
\ntable. You are required to use the most appropriate basis to apportion the relevant
\noverhead costs.
\n(Please show detailed workings and round up your answers to two decimal
\nplaces.) (30 marks)
\n(ii) One of the products of Sand Ltd. is Pico. Cost information to produce one unit of
\nPico is as follows:
\nDirect materials 2 kg at $3.00 per kg
\nDirect labour 3.5 hours at $10.00 per hour
\nTime spent in:
\nCutting Department 3 machine hours
\nFinishing Department 6 labour hours
\nFind the cost of 1,000 units of Pico.
\n(Please show detailed workings and round up your answers to two decimal
\nplaces.) (5 marks)
\n5
\nSolutions:
\n(i)
\nProduction Department
\nBasis Total Cutting Finishing
\n$ $ $
\nAllocated
\nApportionment
\nTotal
\nActivity Base
\nOverhead
\nAbsorption Rate
\nQuestion 4 (10 marks)
\nExplain and give an example of each type of cost listed below:
\n(i) Committed fixed cost
\n(ii) Discretionary fixed cost
\n(10 marks)<\/p>\n","protected":false},"excerpt":{"rendered":"
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