Beruflich Dokumente
Kultur Dokumente
INSTRUCTIONS TO CANDIDATES
1.
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
Section B:
3.
Enter your student number and your National Registration Card number on the front
ofthe answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
8.
Graph paper (if required) is provided at the end of the answer booklet.
SECTION A
Attempt all the ten (10) multiple choice questions in this section
QUESTION 0NE
Each of the following sub questions has only one answer. Write the letter of the
correct answer you have chosen in your answer booklet. Marks are indicated
against each question.
1.1
1.2
(2 marks)
Which of the following are five qualitative characteristics which make financial
statements reliable according to the IASBs Framework?
A.
B.
C.
D.
1.3
Assets
Assets
Assets
Assets
1.4
K114,000
K134,700
K20,700
K93,300
(2 marks)
Which of the following may cause a situation where a trial balance totals K250,000
more than the debit side.
A.
B.
C.
D.
Sale of goods for K250,000 being omitted from the customers account
Purchase of goods for K250,000 being omitted from the suppliers account
Payment of K250,000 for expenses being omitted from the cashbook.
Invoice for commission receivable of K125,000 being debited to the
commission receivable account.
(2 marks)
2
1.5
A VAT registered trader buys goods on credit for K700,000 gross; sales goods on
credit for K750,000 net; returns some of the goods to the supplier worth K200,000
gross and receives returns from its customers amounting to K175,000 net. State the
amount that will be payable or receivable by the trader to/from Zambia Revenue
Authority?
A.
K23,448 payable
B.
K23,034 receivable
C.
K23,034 payable
D.
K23,448 receivable
(2 marks)
1.6
IAS 7 Statement of Cash flows requires that the statement opens with the calculation
of net cash from operating activities. This is arrived at by adjusting net profit before
taxation.
Which of the following lists consists only of items which could be included in such a
calculation?
A.
B.
C.
D.
1.7
500,000
Share premium
200,000
Retained earnings
300,000
1,000,000
Share capital
Share premium
Retained earnings
K000
Cr 500,000
Dr 125,000
Cr 300,000
B.
Share capital
Share premium
Retained earnings
Cr 625,000
Cr 200,000
Dr 300,000
1.8
1.9.
C.
Share capital
Share premium
Retained earnings
Cr 625,000
Cr 75,000
Cr 300,000
D.
Share capital
Share premium
Retained earnings
Cr 500,000
Cr 200,000
Cr 300,000
The primary reason for entities establishing internal audit function is to:
A.
B.
C.
D.
(2 marks)
1.10
(2 marks)
K3,480,000
K3,262,500
K3,719,070
K3,600,000
(2 marks)
Your firms cash book at 30 April 2012 shows a favourable balance at the bank of
K22,410,000. A comparison with the bank statement received at the same date
revealed the following differences:
Dishonoured cheques not in the cash book
K1,260,000
K4,230,000
K450,000
Unpresentedcheques
K7,560,000
K13,140,000
K20,700,000
K23,220,000
K24,030,000
(2 marks)
Total( 20 marks)
SECTION B
QUESTION TWO
Chisomo and Chikondi are in partnership, sharing profits 3:2 respectively and the trial
balance of the business as at 31st October 2011 is given below:
K000
Buildings at cost
K000
48,000
Machinery at cost
24,000
st
18,000
Machinery
9,000
650,000
Returns outwards
906,600
4,100
Returns inwards
10,800
Carriage inwards
3,450
Rent
39,000
Bank
4,125
General expenses
5,700
Selling expenses
52,500
Bank charges
225
77,100
45,270
Insurance
67,800
2,400
70,500
st
7,680
Chikondi
4,110
2,100
4,020
Drawings: Chisomo
19,500
Chikondi
16,800
st
36,000
________
18,000
1,073,390
1,073,390
(b)
Chisomo has taken some goods for her own use during the year to the value of
K2,700,000, but this has not yet been recorded in the accounts.
(c)
Interest on drawings for the year is K810,000 for Chisomo and K630,000 for
Chikondi.
(d)
Chikondi is entitled to a salary of K25,500,000 per annum before profits are shared.
(e)
(f)
(g)
Irrecoverable debts of K1,200,000 are to be written off and the allowance for
receivables to be adjusted, based on past events to the equivalent of 5% of the
remaining receivables.
(h)
Required:
Prepare the following statements for the partnership:
(i)
The income statement and appropriation account for the year ended
31st October 2011
(10 Marks)
(ii)
The partners current accounts for the year ended 31st October 2011
(3 marks)
(iii)
(7 marks)
Total (20 marks)
QUESTION THREE
(a)
You are a newly employed Accounts assistant for Jokoto and Sons Ltd, a business
that has been in existence for barely two years in the city of Kitwe. The Propriator
Jokoto Kalonda has presented you with the following opening balances and
transactions for the year ending 30 September 2011.
Opening balances as at 1 October 2010:
Rent payable account
Dr
K6,000,000
Electricity account
Cr
K3,200,000
Dr
K1,200,000
Cr
K19,200,000
Required:
Write up the ledger accounts for:
(i)
(ii)
(iii)
(iv)
Rent payable
Electricity
Interest receivable
Allowance for receivables
(5
(5
(4
(3
marks)
marks)
marks)
marks)
And bring down the balances at 30 September 2011, clearly stating the meaning of
each, and treatment in the statement of financial position.
(b)
Going concern
Substance over form
(1 marks)
(1 marks)
Total (20 marks)
QUESTION FOUR
Maboshe, the treasurer of Chipata Tennis Club has provided you with the following details of
transactions during the year ended 31 March 2012.
1. Bank account summary
Receipts
Members annual subscriptions
Sales of old tennis equipment
Receipts from Bar customers
Tennis tournament fee income
Donation
Total receipts
K000
257,580
86,400
150,147
35,559
2,943
532,629
Payments
Caretakers wages
Tennis tournament expenses
Rent of tennis house
Bar ancillary services
Electricity
Bar staff wages
Bar purchases
Telephone
Purchase of Tables for playing tennis
Total payments
91,800
5,562
82,350
5,670
22,896
62,370
115,290
9,990
78,300
474,228
K,000
26,163
Payments
Tennis tournament expenses
General expenses
Total payments
19,548
5,616
25,164
31 March 2012
K000
513
to be calculated
Bank overdraft
59,184
to be calculated
8,100
12,150
Subscriptions owing
4,050
Subscriptions in advance
8,910
7,290
20,250
17,010
8,100
to be calculated
1,260
1,242
1,593
89,100
8
to be calculated
(4 Marks)
(b) Prepare an income and expenditure account for the year ended 31 March 2012.
(9 marks)
(c)
(7 marks)
March 5
March 8
March 11
Sold goods to the following: Mbita K1,729,600 gross; Chitalu K1,420,960 net.
March 12
March 17
March 19
March 20
Sold goods on credit to: Mubita K1,741,200 gross; Mukwita K588,800 net.
March 24
March 26
Credit sales to Panda allowing him 2.5% cash discount on list price of
K3,000,000.
March 29
Twalumba also tells you that they maintain control accounts as part of double entry.
Required
(a)
b)
Enter
(i)
(ii)
(iii)
(iv)
(5 marks)
(2 marks)
(4 marks)
(2 marks)
figures 5
Post the Subsidiary book totals in double entry in an appropriate ledger. (7 marks)
TOTAL (20 MARKS)
QUESTION SIX
Brian & Sons and Chola enterprises are two competing businesses in the area of childrens
Toys. You have been asked to compare the performances of the two businesses using their
financial statements provided below.
Income statements for the year ended 31 December 2011.
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Finance costs
Profit before tax
Corporation tax
Net profit for the period
10
Chola Enterprises
K000
K000
33,000
43,200
(26,400)
(30,240)
6,600
12,960
(3,660)
(10,110)
2,940
2,850
(90)
(90)
2,850
2,760
(1,200)
(1,080)
1,650
1,680
Chola Enterprises
K000
K000
22,500
43,200
750
3,000
180
3,930
26,430
3,300
46,500
18,000
42,000
6,480
2,460
24,480
44,460
450
660
1,200
300
1,230
30
120
1,500
26,430
2,160
1,140
0
1,380
46,500
Required
(a)
Calculate the following ratios for both Brian & Sons and Chola.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(6 Marks)
Use the ratios calculated in (a) above to comment on the performance of the two
businesses, by giving possible reason for the performance as indicated by the ratios.
(9 marks)
(c)
Define adjusting event and non adjusting event after the reporting period, and
explain the accounting treatment of each.
(3 marks)
11
(d)
Limpopo Plc. is a manufacturing business in secondary industry. After the end of the
reporting period, but before financial statements were authorized for issue, the
following material events took place: Indicate whether each of the events is
adjusting or non adjusting.
(i)
(ii)
There have been large changes in Foreign exchange rates affecting Limpopos
receivables and payables.
(iii)
(iv)
Limpopo Plc has discovered some fraud and error showing incorrectness of
financial statements.
(2 marks)
Total (20 marks)
12
T1
SUGGESTED SOLUTIONS
SOLUTION ONE
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
A
D
D
A
C
C
C
B
A
D
SOLUTION TWO
(i)
CHISOMO AND CHIKONDI PARTNERSHIP INCOME STATEMENT AND
APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31 OCTOBER 2011
K000
K000
Sales
906,600
(10,800)
895,800
70,500
647,300
Returns outwards
(4,100)
Carriage inwards
3,450
717,150
(57,000)
660,150
Gross profit
235,650
Less Expenses
Discounts allowed
4,020
Irrecoverable debts
1,200
Insurance
2,400
36,000
General expenses
5,700
13
Selling expenses
52,500
Bank charges
225
46,470
1,695
7,500
2,400
TOTAL EXPENSES
(160,110)
Net profit
75,540
810
Chikondi
630
76,980
(25,500)
51,480
Share of profit:
Chisomo 3/5
30,888
Chikondi 2/5
20,592
______
51,480
51,480
(ii)
Drawings
Interest on drawings
Balances c/d
Chikodi
Chisomo
K000
K000
22,200
16,800
810
630
15,558
32,772
38,568
50,202
K000 K000
Balances b/f
salary- chikondi
Share of profi
7,680 4,110
25,500
30,888 20,592
38,568 50,202
Balances b/d
14
Chikodi
15,558 32,772
(ii)
K000
K000
Depn Carrying
Amount
Buildings
Machinery
Current Assets
48,000
25,500
22,500
24,000
11,400
12,600
72,000
36,900
35,100
57,000
Inventory
Receivables (77,100 -1,200 -3,795)
Bank
72,105
4,125
3,000
136,230
171,330
36,000
18,000
Chikondi
15,558
32,772
Chikondi
102,330
Current Liabilities
67,800
Payables
1,200
69,000
171,330
15
SOLUTION THREE
(a)
(i)
2010/11
10.1
11.30
2.29
5.31
8.31
Balance b/f
bank
bank
Bank
bank
10.1
Balance b/d
I/S
Balance c/d
K000
24,000
6,000
_____
30,000
Meaning: rent had been paid in advance by K6,000,000 at 30 September 2011 and
this would be shown as a current asset in the statement of financial position.
(ii)
2010/11
11.5
2.10
5.8
8.7
9.30
Bank
Bank
Bank
Bank
Balance c/d
Electricity
K000
4,000
5,200
6,000
4,400
3,600
23,200
account
2010/11
10.1
9.30
10.1
Balance b/d
I/S
K000
3,200
20,000
Balance b/d
______
23,200
3,600
Balance b/f
I/S
Balance b/d
K000
1,000
2,400
1,200
4,600
16
(iv)
2010/11
Balance c/d
25,000
25,000
Balance b/d
K000
19,200
5,800
______
25,000
25,000
(ii)
17
SOLUTION FOUR
(a)
Chipata tennis clubs
Bar income statement for the year ended 31st March 2012
K000
Sales (W5)
Less cost of sales:
K000
177,570
8,100
Opening inventory
112,050
Purchases (w4)
120,150
(13,608)
106,542
71,028
Gross profit
LESS EXPENSES
5,670
62,370
(68,040)
2,988
(b)
Chipata Tennis Clubs
Income and expenditure account for the year ended 31st March 2012
Income
K000
K000
2,988
Subscriptions (w2)
255,150
Donations
2,943
35,559
Total income
296,640
Expenditure
Caretakers wages
91,800
25,110
Rent (w6)
78,300
Electricity
22,896
Telephone (w3)
10,341
Depreciation;tennis tables(w7)
68,175
48,600
General expenses
5,616
18
Total expenditure
(350,838)
Deficit
54,198
(c)
Chipata Tennis clubs
Statement of financial position as at 31st March 2012
K000
Non current assets
Cost
Tennis tables
272,700
Current assets
Bar inventory
Bar receivables
Cash
Rent prepaid
Total assets
K000
depn
173,475
13,608
1,260
1,512
12,150
K000
carr.
Amount
99,225
28,530
127,755
155,277
(54,198)
101,079
Current liabilities
Bar payables
Bank overdraft
Subscriptions in advance
Telephone accrued
17,010
783
7,290
1,593
26,676
127,755
WORKINGS
1. Accumulated fund calculation
ASSETS
Cash
Rent prepaid
Subscriptions owing
Bar inventory
Tennis tables
Tennis equipment
LIABILITIES
Bank overdraft
Bar payables
Subscription in advance
Telephone accrued
Accumulated fund
K000
513
8,100
4,050
8,100
89,100
135,000
________
244,863
19
K000
59,184
20, 250
8,910
1,242
155,277
244,863
2.
Subscription Account
K000
4,050
Prepaid b/f
255,150
Bank
7,290
Owing b/f
I/E
Prepaid c/d
266,490
3.
Telephone Account
K000
9,990
Balance b/f
1,593
Purchases
11,583
Owing b/d
Bank
Owing c/d
4.
Bank
Balance c/d
Prepaid b/d
5.
K000
8,910
257,580
_______
266,490
7,290
K000
1,242
10,341
11,583
1,593
K000
20,250
112,050
132,300
17,010
Bar Receivables
Balance b/f
Sales
Balance b/d
K000
151,407
151,407
1,260
Bank
Balance c/d
K000
150,147
1,260
151,407
I/E
Balancec/d
K000
78,300
12,150
90,450
Rent Account
K000
8,100
82,350
90,450
12,150
Note: The candidate may alternatively use the arithmetic format to derive the
missing figures, and write the arithmetic on the face of the Income statement.
7.
K78,300,000/4 years
= K19,575,000 p/a
20
Closing inventory
Cost of sales is calculated as: 60/100 x 177,570,000 = 106,542,000
Therefore, 120,150,000 x = 106,542,000
X = 106,542,000 120,150,000
X = 13,608,000
9.
Cash Receivables
Balance b/f
Sales (bar)
Balance b/d
10.
Tournament expenses
General expenses
Balance c/d
K000
19,548
5,616
1,512
26,676
Bank Receivables
Sundry receipts
Balance c/d
11.
K000
513
26,163
______
26,676
1,512
K000
532,629
783
533,412
Balance b/f
payments
Balance b/d
135,000
(86,400)
48,600
21
K000
59,184
474,228
533,412
783
SOLUTION FIVE
(a)
(ii)
VAT
amount
Net
amount
K
K
K
Mbita
2,598,400
358,400
2,240,000
Pele
3,364,000
464,000
2,900,000
Chitalu
3,712,000
512,000
3,200,000
Chansa
1,600,800
220,800
1,380,000
Mbita
1,729,600
238,566
1,491,034
Chitalu
1,648,314
227,354
1,491,034
Mubita
1,741,200
240,166
1,501,034
Mukwita
648,208
89,408
558,800
Panda(w3)
3,468,000
468,000
3,000,000
TOTALS
20,510,522 2,818,694 17,761,902
(iii)
Gross
amount
Gross
amount
K
Pele
527,800
Chitalu
603,200
Panda(w4)
693,600
TOTAL
1,824,600
VAT
Net
amount amount
K
K
72,800
455,000
83,200
520,000
93,600
600,000
249,600 1,575,000
Gross
amount
VAT
amount
Net
amount
K
K
K
Mwamba
1,720,000
237,241
1,482,759
Mark
896,000
123,586
772,414
Monde
1,730,000
238,621
1,491,379
Mukwa
1,191,088
164,288
1,026,800
Tumelo
3,062,200
422,372
2,639,828
Monde
2,683,120
370,086
2,313,034
Hamweemba(w1)
3,378,291
457,915
2,920,376
TOTALS
14,660,699 2,014,109 12,646,590
22
(iv)
Gross
amount
K
Mwamba
417,600
Mukwa
220,000
Hamweemba (w2) 298,917
TOTALS
936,517
VAT
amount
K
57,600
30,345
40,517
128,462
Net
Amount
K
360,000
189,655
258,400
808,055
WORKINGS
1. Purchases from Hamweemba
List price
Less Trade Discount (@ 5% x 3,074,080)
Less cash discount (@ 2% x 2,920,376)
VAT (@ 16% x 2,861,968)
Add back cash discount
Gross amount to record
2. Returns to Hamweemba
List price
Less Trade Discount (@ 5% x 272,000)
Less cash discount (@ 2% x 258,400)
Add VAT (@ 16% x 253,232)
Gross amount before adding back c.d.
Add back cash discount
Gross amount to record
3. Sales to Panda
List price
Less cash discount (@ 2.5% x 3,000,000)
Add VAT @ 16% X 2,925,000
Add back cash discount
Gross amount
23
3,074,080
(153,704)
2,920,376
(58,408)
2,861,968
457,915
3,319,883
58,408
3,378,291
272,000
(13,600)
258,400
(5168)
253,232
40,517
293,749
5,168
298,917
3,000,000
(75,000)
2,925,000
468,000
3,393,000
75,000
3,468,000
600,000
(15,000)
585,000
93,600
678,600
15,000
693,600
GENERAL LEDGER
SDB
Balance b/d
PRDB
Bal c/d
SRDB
PDB
Balance c/d
PDB
K
1,824,600
18,685,922
20,510,522
K
14,660,699
_________
14,660,699
13,724,182
K
2,818,694
128,462
________
2,947,156
683,447
Purchases account
K
12,646,590
Sales account
K
24
SDB
K
17,691,828
SRDB
K
808,055
SOLUTION SIX
(a)
(i)
Chola
2,940,000
x 100
33,000,000
2,850,000
x100
43,200,000
8.9%
(ii)
(iii)
2,940,000
x 100
24,930,000
2,850,000
x 100
45,120,000
11.8%
6.3%
3,930,000
1,500,000
3,300,000
1,380,000
2.6 : 1
(iv)
450,000 x 100
24,480,000 450,000
1.8%
(v)
(vi)
Interest cover =
operating profit
interest payable
6.6%
2.4 1
660,000 x100
44,460,000 660,000
1.5%
1,650,000
1,680,000
18,000 shares
42,000 shares
K91.67/share
K40.00/ share
2,940,000
90,000
2,850,000
90,000
32.7 times
25
31.7
Times
(b)
(i) Net operating profit margin for Brian & Sons signifies better performance than
that of Chola. However, the percentages are generally both lower than expected
of good profitability.
Possible reasons for Brian & Sons better performance could be due to an absolute
higher profit figure of K2,940,000 from lower sales of K33,000,000 compared to
Chola who had profit of K2,850,000 from sales of K43,200,000. Additionally, it
could be due to Brian & Sons strict control of operating expenses that are 3 times
lower than Cholas. Finally, Brian could have sold lower volume toys at attractive
prices while Chola higher volume sales at unattractive prices.
(ii)
ROCE for Brian & Sons equally indicate better performance at almost double that
of Chola, i.e 11.8% against 6.3%. however, both percentages are much on the
lower side, which could indicate problems in the industry generally where
businesses are not as much profitable as normally expected in the use of their
resources.
Possible reasons for Brian & sons better performance may include the fact that it
could be making an efficient use of its non current assets. Brian & Sons is hence
an attractive investment to potential investors.
(iii) The two businesses current ratios are almost equal and healthy with Brians
being slightly higher than Cholas by 0.2. This may be attributed to the fact that
Brian & Sons have a positive bank balance while Chola is servicing a bank
overdraft.
Both businesses current liabilities are covered by current assets more than twice.
This means they are likely to meet short term obligations as they fall due with
Brian at a most advantage.
(iv) Both businesses Gearing are very low, confirming the fact that their loan finance
as a proportion of total finance is very low. This is healthy as the businesses are
saved the finance cost obligations that usually erode earnings for distribution to
shareholders when large. Although Brian & sons gearing is slightly higher than
that of Chola, its much reasonable as any gearing less than 50% is well within
acceptable levels.
(v)
Brian & Sons earnings per share is twice that of Chola, indicative of better
performance.
This may mean Brian & Sons is putting investors funds to good use, thereby
generating more earnings for the number of shares than Chola. Brian and Sons
becomes an attractive investment destination for investors as a result. The
shareholders of Brian &Sons are more likely to receive dividends than those of
Chola.
(vi) Brian & Sons operating profit covers interest obligations more than Chola. This is
attributed to increased profitability as shown in the other ratios calculated, as
interest obligation is same for both companies.
Note: any other reasonable points for comments may be acceptable
26
(c)
An adjusting event is an event occurring after the reporting period that provides
further evidence of conditions that existed at the reporting date.
A non adjusting event is an event occurring after the reporting date that is indicative
of conditions that arose subsequent to the reporting date.
Accounting treatment
(d)
Adjusting events require adjustment of assets and liabilities or any relevant balances
at the reporting date.
Non adjusting events do not require adjustment of any balances at the reporting
date but need to be disclosed in the financial statements regarding:
The nature of the event
An estimate of the financial effect of the event. Where an estimate cannot be
made, a statement that an estimate cannot be made.
(i)
adjusting
(ii) non adjusting
(iii) non adjusting
(iv) adjusting
27
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
Section B:
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be
taken as an indication of the expected length and depth of the answer.
6.
7.
8.
Graph paper (if required) is provided at the end of the answer booklet.
28
SECTION A
Attempt all multiple choice questions in this section.
Each of the following questions has only ONE correct answer. Write the LETTER of the
correct answer you have chosen in your answer booklet. Marks allocated are indicated
against each question.
1.1
The annual use of an item is 10,000 units. The cost of placing an order is K90,000
and the cost of holding one unit in stock for one year is K4,500.
What is the Economic Order Quantity?
1.2
632.46 units
532.46 units
400,000 units
(2 marks)
Various costs will increase by jumps when certain levels of activity are attained.
These are commonly referred to as Step functions or stepped costs.
Which of the following is usually classified as stepped cost?
1.3
Business rates
Supervisors wages
Telephone
(2 marks)
Which of the following source documents in the area of cost accounting is aimed at
exercising control over the delivery of and accurate recording of the receipt of
goods?
A
Purchase Requisition
Materials Requisition
(2 marks)
29
1.4
QUANTITY
AGREGATE
ACTUAL TIME
(HRS)
Gear levers
25
Gaskets
100
1.2
14
Filters
50
12
Springs
14
His payment per standard hour worked is K2000. What are his earnings for the
week?
1.5
1.6
K680,000
K648,000
K656,000
K146,000
(2 marks)
Actual direct labour time per unit being greater than budget.
(2 marks)
K225.00
K375.00
K304.50
K507.50
(2 marks)
30
1.7
Product Y has a standard direct material cost of K100 per unit (10kg @ K10 per kg).
During period 4, 1,000 units of Y were manufactured, using 11,700 kg of material Z
which cost K98,600.
What is the material total variance?
1.8
1,400 (F)
18,400 (F)
1,400 (A)
17,000 (A)
(2 marks)
1.9
(2 marks)
Activity Based Costing (ABC) establishes separate cost pools for support activities
such as dispatching. Which of the following is a criticism of ABC?
A
ABC provides data which can be used to evaluate different ways of delivering
business.
(2 marks)
31
1.10
This is the system that uses separate cost accounts which periodically are
reconciled with the financial accounts.
This is the system that uses the same bases for items such as stock valuation
and depreciation with no need for reconciliation between cost profit and
financial profit.
SECTION B
Attempt any FOUR questions in this section.
QUESTION TWO
(a)
For the six months ended 31st October, Masiwa Musiwa, an importer and distributor
of one type of washing machine has the following transactions in his records. There
was an opening balance of 100 units which had a value of K3, 900,000.
RECEIPTS
DATE
May
100
41,000
June
200
50,000
August
400
51,875
The unit price of K51,875 for the August receipt was K6,125 per unit less than the
normal price because of the large quantity ordered.
ISSUES
DATE
July
250
64,000
September
350
70,000
October
100
74,000
Required:
Show the stores ledger records including closing stock balance and stock valuation
using:
(i)
LIFO
(6 marks)
32
(b)
(ii)
FIFO
(6 marks)
(iii)
(4 marks)
55,000 units
Required:
(i)
(ii)
(iii)
(iv)
maximum
11,000 units
Minimum
90,00 units
Maximum
5 months
Minimum
3 months
Calculate the
re-order level
re-order quantity
minimum level
average stock held
(1
(1
(1
(1
mark)
mark)
mark)
mark)
(TOTAL: 20 Marks)
QUESTION THREE
(a)
CHOLA LUNGU
MWAPE MATE
10 minutes
7.5 minutes
378
408
45
36
Hourly rate
K1,500
K1,800
10 units
12 units
Employees were paid in full for the scrapped units. Mwape Mate was in
attendance for the full 40 hours.
33
Required:
Calculate the.
(b)
(i)
(ii)
(3 marks)
(iii)
(4 marks)
Magoye ltd is a company that operates interlocking financial and cost accounting
bookkeeping systems. In a particular period, profit in the financial accounts was
K11,287,000 while cost accounts showed a profit of K2,704,000.
Further examination of the accounts showed the following discrepancies:
COST ACCOUNTS
K000
Depreciation
Valuations of stock:
9826
Opening stocks
27510
Closing stocks
18218
3250
FINANCIAL ACCOUNTS
K000
Depreciation
Valuations of stock:
10520
Opening stocks
25500
Closing stocks
18750
850
Dividends received
2635
Required:
Prepare a statement reconciling the profit figures as per the cost accounts and
financial accounts.
(6 marks)
(TOTAL: 20 marks)
34
QUESTION FOUR
(a)
PROCESS A
There was no work in process on 1st
January
During the month 815 units costing
K2,370 were put into process
Labor and overhead incurred
amounted to K1,668
During the month 600 units were
finished and passed to process B
On 31st January, 190 units remained
in process, the operations on which
were half completed, but the
materials for the whole process have
been charged to the process.
PROCESS B
No opening work in process on 1st
January
The cost of labour and overhead in
this process was K900 and materials
costing K350 were added at the end
of operations
On 31 January, 400 units had been
transferred to finished stock
At that date 200 units remained in
process, and it was estimated that
one quarter () of the operations had
been completed.
Required: Prepare
(i)
(ii)
Process A Account
Process B Account
(8 marks)
(8 marks)
A factory has three service cost centres, MA, TR and BH, costing as below:
MA
K15 000
TR
K10 000
BH
K30 000
The services are to be charged to each other and to the production department
using the following basis:
SERVICE CENTRE
PRODUCTIVE
MA
TR
BH
90%
100%
80%
10%
Required:
Apportion the total overhead costs of K55 000 among the centres using Elimination
Method.
(4 marks)
(Total: 20 marks)
35
QUESTION FIVE
Sons and Daughters Ltd is a company that manufactures and sells two products Zeddy and
Cee. The following information is available:
Selling price each:
Labour (unit):
Variable production
overheads:
Material:
Production units:
Zeddy
K15
Cee
K20
Zeddy
K2 (1 hour)
Cee
K4 (2 hours)
Zeddy
K3
Cee
K6
Zeddy
K4
Cee
K5
Zeddy - June
Cee
Sales units:
Zeddy
Cee
Fixed overheads:
700
- July
350
- June
300
- July
500
- June
600
- July
400
- June
700
- July
400
- June
K4,600
- July
K2,700
Required:
Prepare a profit statement for June and July showing closing stock valuations
using:
(i)
(ii)
( 10 marks)
( 10 marks)
(Total: 20 marks)
36
QUESTION SIX
Kangwa Chewe chemicals Limited produce an industrial purifying agent known as
Supchem, the budgeted weekly output/sales of which is 10,000 litres. The standard
cost per 100 litres is:
Materials
Labour
K2,500,000
(b)
(2 marks)
(2 marks)
(2 marks)
(2 marks)
(2 marks)
(2 marks)
Basic standard
(2 marks)
(ii)
Current standard
(2 marks)
(iii)
Attainable standard
(2 marks)
(iv)
Ideal standard
(2 marks)
(Total: 20 marks)
END OF PAPER
37
T2
PILOT PAPER
MODEL SOLUTIONS
SECTION A: SOLUTIONS
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
SECTION B
SOLUTION TWO
(a)
DATE
Opening
May
June
41,000
200
50,000
July
August
ISSUES
QTY
PRICE
K
250
400
51,875
100=39000
100=41000
50= 50000
September
350
150x50000
200x51875
October
100
51875
38
BALANCE
QTY
PRICE
K
100
39,000
100
39,000
100
41,000
100
39,000
100
41,000
200
50,000
STOCK
VALUE
K000
3,900
8,000
1,8000
150
50,000
7,500
150
400
200
50,000
51,875
51,875
2,8250
1,0375
100
5,1875
51,87.5
RECEIPTS
QTY
PRICE
K
100
41,000
200
50,000
July
August
ISSUES
QTY
PRICE
K
200 x 50,000
50 x 41000
250
400
51,875
BALANCE
QTY PRICE
K
100
39,000
100
39,000
100
41,000
100
39,000
100
41,000
200
50,000
100
39,000
STOCK
VALUE
K000
3,900
8,000
18,000
50
41,000
5,950
100
50
400
39,000
41,000
51,875
26,700
September
350
51,875
100
50
50
39,000
41,000
51,875
8,543.75
October
100
50 x 51,875
50 x 41,000
100
39,000
3,900
39
RECEIPTS
QTY
PRICE
K
100
41,000
200
50,000
July
ISSUES
QTY
PRICE
K
250
August
400
45,000
51,875
BALANCE
STOCK
QTY PRICE VALUE
K
K000
100
39,000
3,900
200
40,000
8,000
400
45,000
18,000
150
45,000
6,750
550
50,000
27,500
September
350
50,000
200
50,000
10,000
October
100
50
100
50,000
5,000
(b)
(i)
(ii)
Reorder quantity
Maximum level = Reorder Level + Reorder Quantity Minimum lead time
usage
= 55,000 + RQ (9,000 x 3)
RQ = 55,000 55,000 + 27,000
= 27,000 Units
40
(iii)
The minimum level = Rorder level less average lead time usage
= 55,000 (10,000 x 4)
= 55,000 40,000
= 15,000 units
(iv)
SOLUTION THREE
(i)
CHOLA LUNGU
378 x 10
60
MWAPE MATE
63 hours
408 x7.5
60
51 hrs
45 hours
36 hrs
Time saved
18 hours
15 hrs
= K10,800
K10,800
NIL
= K11,250
(ii)
60,000
40 x K1,800
= 72 000
11,250
10,800
10,800
82,050
82,800
Units produced
378
408
Units scrapped
(10)
(12)
368
396
NIL
(iii)
Labour cost per good unit produced
=
41
82,050
82,800
368
396
K222.96 =
K209
(2b)
MEMORANDUM RECONCILIATION ACCOUNT
K000
Profit as per financial
accounts
K000
11,287
Depreciation difference
694
2,704
850
Dividend Received
2,635
3,250
2,010
_____
(closing)
11,981
532
11,981
SOLUTION FOUR
PROCESS A
Input
units
815
2,370
1,668
815
units
Process B (w1)
600
3,240
190
798
Process loss
25
815
4,038
units
4,038
PROCESS B
units
600
3,240
400
3,310
900
200
1,180
Materials added
350
600
4,490
Process A
600
4,490
42
WORKINGS
VALUING WORK IN PROCESS
1
PROCESS A
Materials
Effective units
TOTAL
effective units
Work in process
190
95
Transfer to process B
600
600
790
695
K2,370
K1,668
K3
K2.4
570
228
798
1,800
1440
3,240
K2,370
K1,668
Materials
Total costs
Cost per effective unit
EVALUATION
Work in process
Transfer to process B
2.
PROCESS B
Effective units
TOTAL
effective units
Work in process
200
50
Transfer to Finished
goods
400
400
600
450
K3,240
K900
K5.40
K2
Work in process
1,080
100
1,180
Finished Goods
2,160
800
3,310
______
_____
_____
K3240
K900
4,490
Total costs
Cost per effective unit
EVALUATION
Material costs
43
(3b)
BH
MA
K000
K000
K000
K000
30,000
15,000
10,000
(30,000)
3,000
3,000
24,000
(18,000)
1,800
16,200
(14,800)
14,800
55,000
Apportionment of MA costs
Apportionment of TR costs
TR PRODU
SOLUTION FIVE
(a)
MARGINAL COSTING
JUNE
ABSORPTION COSTING
K
Sales: Zeddy
Cee
9,000
14,000
JUNE
Sales: Zeddy
Cee
23,000
Variable production cost
6,300
Profit
23,000
Labour (2300 hrs x 2)
4,600
12,000
2,800
18,300
4,000
Variable overhead:
(900)
Fixed costs
14,000
Cost of production
Contribution
9,000
2,100
(1,500)
4,800
15,900
Fixed overhead
4,600
7,100
22,900
(4,600)
2,500
(1,100)
(1,900)
19,900
3,100
44
ABSORPTION COSTING
MARGINAL COSTING
JULY
Sales: Zeddy
Cee
JULY
6000
Sales: Zeddy
6000
8000
Cee
8000
14000
14000
Cost of production
Opening stock
Opening stock
900
1500
1100
1900
2400
Add: Zeddy (350 x K9)
Cee (500 x K15)
3000
3150
2700
7500
1400
2500
Variable overhead:
(450)
1050
(3000)
3000
9600
Fixed overhead
2700
Contribution
4400
Fixed costs
2700
_____
Profit
1700
16350
less: Closing stock:
Zeddy (50 x K11)
(550)
(3800)
12000
Profits
2000
CEE
Variable
15
Fixed
11
19
45
= K2 per hour
SOLUTION SIX
(a)
Variance Calculation:
(i)
Direct material usage:
9.860 litres should use (x 2.5 kg)
But did use
Usage variance in kg
Standard material cost per kg
Direct material usage variance
(ii)
(iii)
(iv)
(v)
(vi)
24,650,kg
24,720,kg
70 kg (A)
K2,500
K175,000 (A)
K000
61,800
61,500
300(F)
394.4 hours
380.0 hrs
14.4 hrs
K6,250
K90,000 (F)
Directlabour rate:
K000
2,375
2,450
75 (A)
K000
K2,500
K2,625
125 (A)
Budget volume
10,000 lites
Actual volume
9,860
140 litres
46
(b)
K250
K35,000(A)
(i)
Basic Standard
A standard established for use over a long period from which a current
standard can be developed.
(ii)
Current Standard
A standard established for use over a short period of time, related to current
conditions.
(iii)
Attainable Standard
A standard which can be attained if a standard unit of work is carried out
efficiently, a machine properly operated or material properly used.
Allowances are made for normal shrinkage, wastage and machine
breakdowns.
(iv)
Ideal Standard
This is unrealistic, in that it presumes that ideal conditions will prevail, eg.
Maximum sales at highest prices, most efficient workmanship (with no strikes
or sickness) for maximum pay, first class materials and expense items at low
cost.
47
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
8.
Graph paper (if required) is provided at the end of the answer booklet.
48
SECTION A
Attempt all ten sub-questions in this section.
QUESTION ONE
(MULTIPLE CHOICE)
Each of the following questions has only ONE correct answer. Write the LETTER of
each correct answer you have chosen in your answer booklet. Marks allocated are
indicated against each question.
1.1
1.2
1.3
1.4
The ratio of cash to be shared between John and Peter is 5:4. Peter got a
share of US $540.The money shared is Zambian kwacha (1US$ = ZK5,250)
is:
A.
ZK3,543,750
B.
ZK6,378,750
C.
ZK5,103,000
D.
ZK1,312,500.
Given
(2 marks)
A.
0.50045
B.
2.00100
C.
0.66095
D.
0.22000
(2 marks)
The distances covered by eight (8) students from a College were as follows:
5, 7, 6,4,10, 9, 12 and 11. The standard deviation of their distances is
A.
2.9277
B.
5.4256
C.
7.6647
D.
8.5711
(2 marks)
positively skewed
B.
Negatively skewed
C.
Symmetrical
D.
(2 marks)
49
1.5
1.6
A fair coin is spun ten (10) times. Calculate the probability of the result giving
exactly six(6) heads (hint: use binomial)
A.
25.65%
B.
45.20%
C.
20.51%
D.
50.21%
83.76% to 88.34%
B.
44.75% to 65.23%
C.
13.45% to 24.81%.
D.
1.7
(2 marks)
63.17% to 76.88%
2000
5.1
2001
4.8
2002
4.5
2003
4.6
2004
4.7
2005
5.9
What is the price index number of a product in 2005 taking 2001 as the base
year?
1.8
A.
116
B.
86
C.
123
D.
92.
(2 marks)
What compound interest rate will quadruple the value of an investment in six
(6) years?
A.
58.74%
B.
25.99%
C.
69.41%
D.
70.42%
(2 marks)
50
1.9
A simple distribution of the weight (kg) is 40, 35, 25, 50, 30, 55, 45 and 20.
The upper quartile of the distribution is:
1.10
A.
25
B.
55
C.
35
D.
45
(2 marks)
How much should a worker invest now (to the nearest Kwacha) in order to
receive K1.5 billion in perpetuity if the annual rate of interest is 12%?
A.
B.
C.
D.
6x-4
9x -4
10x -2
18x-12
(2 marks)
Total: 20 marks
SECTION B
Attempt any four questions in this section.
QUESTION TWO
(a)
No. of employees
5
4
3
2
6
Required:
Calculate
(b)
(i)
Mean
3 marks
(ii)
3 marks
(i)
Simplify (
(1 mark)
(ii)
Factorize x+3x+2
(2 marks)
(iii)
(2 marks)
)x(
51
(c)
(9 marks)
Total: 20 marks
QUESTION THREE
(a)
(d)
At a business college in Lusaka, a quarter of the students are ladies. 35% of the
students are enrolled in part-time programmes. A student is selected at random.
What is the probability that the student is.
(i)
male student
(3marks)
(ii)
(3marks)
(iii)
(3marks)
The output at a factory and cost of production over the past five months are given
in the following table.
Month
1
2
2
4
5
Output (000units) X
19
15
22
20
16
Cost(K000) Y
82
70
90
85
73
(i)
(ii)
Find the regression equation to determine the expected level of cost, for any
given volume of output.
(5 marks)
Estimate the cost of 220,000 units
(2 marks)
(iii)
(4 marks)
Total: 20 marks
52
QUESTION FOUR
(a)
Price index in Pick and Pay is made up of five items. The price for each item and the
average quantities purchased from manufactures and other companies each week
were as follows in 1999 and 2002
Item
1999
Qty(000) units
A
B
C
D
E
50
30
40
105
20
1999
Prices/unit in
ZK
3
6
5
2
7
2002
Qty(000) units
80
40
20
150
10
2002
Prices/unit in
ZK
4
5
8
2
10
Required:
Calculate the Paasche Price index number taking 1999 as the base year.
(b)
(8 marks)
(c)
(7 marks)
(5 marks)
Total: 20 marks
53
QUESTION FIVE
(a)
How long will it take to accumulate K7,800,000 when K6,000,000 is invested at 10%
interest compounded quarterly.
(3 marks)
(b)
In a quality control tests, the weights of standard packages were measured to give
the following grouped frequency table
Weights in grams
150 <160
160<170
170<180
180<190
190<200
Number of packages
5
10
30
70
40
Required:
(c)
(i)
(3marks)
(ii)
(4 marks)
(iii)
2005
Quarters
1
2
3
4
1
2
3
4
Data
50
52
56
60
56
52
58
60
(5marks)
Total: 20 marks
54
QUESTION SIX
(a)
The sales distribution of four items A, B, C and D in a shop are sown in the table
below:
ITEM
AMOUNT
10
13
Required:
Draw a pie chart.
(8marks)
(b)
A firm plans to invest a sum of money at the beginning of every year of K150 million
for five years. What is the value of the amount if the investment rate is 12.5%?
(8 marks)
(c)
Mr Konda deposited K70 million in a bank offering 15% simple interest for three
years.
Required:
Calculate the amount gained.
(4,marks)
Total: 20 marks
55
STATISTICAL FORMULAE
1.
I=
PRT
100
(i)
Simple Interest
(ii)
r% interest:
S = 1 r
A = P (1
OR
R n
)
100
A
(1 i ) n
where i
(iii)
(iv)
(1 i ) n 1
(v)
(vi)
R
100
where
P Annuity
(1 i) n1 1
P
A P
i
Pv
1
1
1
r 1 r n
R
i
Where R is a perpetuity payable at the end of each interest period worth i per
interest period.
2.
1 % Confidence limits:
Za
2
S
n
, t a , n 1
2
S
n
56
3.
r
(ii)
a
(i)
6 d 2
n(n 2 1)
4.
[n x 2 ( x) 2 ][n y 2 ( y ) 2 ]
rs 1
(iii)
n xy x y
n
n 2
y
x
OR
b
n
n
a y bx
Z-test statistic:
(ii)
pq
n
p
5.
(i)
(ii)
6.
(i)
f
f
f
f
57
(ii)
( )
SD =
(iii)
(i)
7.
n 1
Mean deviation:
(iv)
f
f
Tn ar n1
(ii)
Sn
ar n 1
r 1
OR
Sn
a1 r n
1 r
(iv)
Tn a (n 1)d
Sn
n
(a L) OR
2
n
2a n 1d
2
Where a is the first term, L is the last term and dis the difference.
8.
Probability distribution:
(i)
Binomial
P( x) n CxP X q n x
(ii)
OR
n x n x
p q
x
where q 1 p
Poisson
P(x)
m x e m
x!
(iii)
Z=
Normal Distribution
A
](b a)%
A B
9.
IRR a% [
10.
Quadratic formula:
x
11.
b b 2 4ac
2a
Index Numbers:
(i)
Laspeyre Price
Laspeyre Quantity
P Q
P Q
Q
Q
(ii)
100
0 P0
Paasche Price
(iii)
100
Price:
12.
100
Paasche Price
P Q1 100 Q P
P Q
Q P
1
P0
P1
0 100
w
w P
Quantity:
Coefficient of skewness:
Psk
Mode
S
OR
Sk =
3( Median )
S tan dard Deviation
59
Q1
0 100
w
w Q
60
61
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.0 0.0000 0.0040 0.0080 0.0120 0.0160 0.0199 0.0239 0.0279 0.0319 0.0359
0.1 0.0398 0.0438 0.0478 0.0517 0.0557 0.0596 0.0636 0.0675 0.0714 0.0753
0.2 0.0793 0.0832 0.0871 0.0910 0.0948 0.0987 0.1026 0.1064 0.1103 0.1141
0.3 0.1179 0.1217 0.1255 0.1293 0.1331 0.1368 0.1406 0.1443 0.1480 0.1517
0.4 0.1554 0.1591 0.1628 0.1664 0.1700 0.1736 0.1772 0.1808 0.1844 0.1879
0.5 0.1915 0.1950 0.1985 0.2019 0.2054 0.2088 0.2123 0.2157 0.2190 0.2224
0.6 0.2257 0.2291 0.2324 0.2357 0.2389 0.2422 0.2454 0.2486 0.2517 0.2549
0.7 0.2580 0.2611 0.2642 0.2673 0.2704 0.2734 0.2764 0.2794 0.2823 0.2852
0.8 0.2881 0.2910 0.2939 0.2967 0.2995 0.3023 0.3051 0.3078 0.3106 0.3133
0.9 0.3159 0.3186 0.3212 0.3238 0.3264 0.3289 0.3315 0.3340 0.3365 0.3389
1.0 0.3413 0.3438 0.3461 0.3485 0.3508 0.3531 0.3554 0.3577 0.3599 0.3621
1.1 0.3643 0.3665 0.3686 0.3708 0.3729 0.3749 0.3770 0.3790 0.3810 0.3830
1.2 0.3849 0.3869 0.3888 0.3907 0.3925 0.3944 0.3962 0.3980 0.3997 0.4015
1.3 0.4032 0.4049 0.4066 0.4082 0.4099 0.4115 0.4131 0.4147 0.4162 0.4177
1.4 0.4192 0.4207 0.4222 0.4236 0.4251 0.4265 0.4279 0.4292 0.4306 0.4319
1.5 0.4332 0.4345 0.4357 0.4370 0.4382 0.4394 0.4406 0.4418 0.4429 0.4441
1.6 0.4452 0.4463 0.4474 0.4484 0.4495 0.4505 0.4515 0.4525 0.4535 0.4545
1.7 0.4554 0.4564 0.4573 0.4582 0.4591 0.4599 0.4608 0.4616 0.4625 0.4633
1.8 0.4641 0.4649 0.4656 0.4664 0.4671 0.4678 0.4686 0.4693 0.4699 0.4706
1.9 0.4713 0.4719 0.4726 0.4732 0.4738 0.4744 0.4750 0.4756 0.4761 0.4767
2.0 0.4772 0.4778 0.4783 0.4788 0.4793 0.4798 0.4803 0.4808 0.4812 0.4817
2.1 0.4821 0.4826 0.4830 0.4834 0.4838 0.4842 0.4846 0.4850 0.4854 0.4857
2.2 0.4861 0.4864 0.4868 0.4871 0.4875 0.4878 0.4881 0.4884 0.4887 0.4890
2.3 0.4893 0.4896 0.4898 0.4901 0.4904 0.4906 0.4909 0.4911 0.4913 0.4916
2.4 0.4918 0.4920 0.4922 0.4925 0.4927 0.4929 0.4931 0.4932 0.4934 0.4936
2.5 0.4938 0.4940 0.4941 0.4943 0.4945 0.4946 0.4948 0.4949 0.4951 0.4952
2.6 0.4953 0.4955 0.4956 0.4957 0.4959 0.4960 0.4961 0.4962 0.4963 0.4964
2.7 0.4965 0.4966 0.4967 0.4968 0.4969 0.4970 0.4971 0.4972 0.4973 0.4974
2.8 0.4974 0.4975 0.4976 0.4977 0.4977 0.4978 0.4979 0.4979 0.4980 0.4981
2.9 0.4981 0.4982 0.4982 0.4983 0.4984 0.4984 0.4985 0.4985 0.4986 0.4986
3.0 0.4987 0.4987 0.4987 0.4988 0.4988 0.4989 0.4989 0.4989 0.4990 0.4990
62
Chi-Square Table
df\area
.995
.990
.975
.950
.900
.750
.500
.250
.100
.050
.025
.010
.005
0.00004
0.00016
0.00098
0.00393
0.01579
0.10153
0.45494
1.32330
2.70554
3.84146
5.02389
6.63490
7.87944
0.01003
0.02010
0.05064
0.10259
0.21072
0.57536
1.38629
2.77259
4.60517
5.99146
7.37776
9.21034
10.59663
0.07172
0.11483
0.21580
0.35185
0.58437
1.21253
2.36597
4.10834
6.25139
7.81473
9.34840
11.34487 12.83816
0.20699
0.29711
0.48442
0.71072
1.06362
1.92256
3.35669
5.38527
7.77944
9.48773
0.41174
0.55430
0.83121
1.14548
1.61031
2.67460
4.35146
6.62568
9.23636
0.67573
0.87209
1.23734
1.63538
2.20413
3.45460
5.34812
7.84080
0.98926
1.23904
1.68987
2.16735
2.83311
4.25485
6.34581
9.03715
1.34441
1.64650
2.17973
2.73264
3.48954
5.07064
7.34412
1.73493
2.08790
2.70039
3.32511
4.16816
5.89883
8.34283
10
2.15586
2.55821
3.24697
3.94030
4.86518
6.73720
9.34182
11
2.60322
3.05348
3.81575
4.57481
5.57778
7.58414
12
3.07382
3.57057
4.40379
5.22603
6.30380
8.43842
13
3.56503
4.10692
5.00875
5.89186
7.04150
9.29907
14
4.07467
4.66043
5.62873
6.57063
7.78953
15
4.60092
5.22935
6.26214
7.26094
8.54676
16
5.14221
5.81221
6.90766
7.96165
9.31224
17
5.69722
6.40776
7.56419
8.67176
63
18
6.26480
7.01491
8.23075
9.39046
19
6.84397
7.63273
8.90652
10.11701 11.65091 14.56200 18.33765 22.71781 27.20357 30.14353 32.85233 36.19087 38.58226
20
7.43384
8.26040
9.59078
10.85081 12.44261 15.45177 19.33743 23.82769 28.41198 31.41043 34.16961 37.56623 39.99685
21
8.03365
8.89720
10.28290 11.59131 13.23960 16.34438 20.33723 24.93478 29.61509 32.67057 35.47888 38.93217 41.40106
22
8.64272
9.54249
10.98232 12.33801 14.04149 17.23962 21.33704 26.03927 30.81328 33.92444 36.78071 40.28936 42.79565
23
9.26042
10.19572 11.68855 13.09051 14.84796 18.13730 22.33688 27.14134 32.00690 35.17246 38.07563 41.63840 44.18128
24
9.88623
10.85636 12.40115 13.84843 15.65868 19.03725 23.33673 28.24115 33.19624 36.41503 39.36408 42.97982 45.55851
25
10.51965 11.52398 13.11972 14.61141 16.47341 19.93934 24.33659 29.33885 34.38159 37.65248 40.64647 44.31410 46.92789
26
11.16024 12.19815 13.84390 15.37916 17.29188 20.84343 25.33646 30.43457 35.56317 38.88514 41.92317 45.64168 48.28988
27
11.80759 12.87850 14.57338 16.15140 18.11390 21.74940 26.33634 31.52841 36.74122 40.11327 43.19451 46.96294 49.64492
28
12.46134 13.56471 15.30786 16.92788 18.93924 22.65716 27.33623 32.62049 37.91592 41.33714 44.46079 48.27824 50.99338
29
13.12115 14.25645 16.04707 17.70837 19.76774 23.56659 28.33613 33.71091 39.08747 42.55697 45.72229 49.58788 52.33562
30
13.78672 14.95346 16.79077 18.49266 20.59923 24.47761 29.33603 34.79974 40.25602 43.77297 46.97924 50.89218 53.67196
64
1.1
4-------------------$540
9------------------ X
Therefore X =
x 540 = $1,215
5
=5
Log
=log 5
2x+1log2 = log 5
2x+1 =
X= (
= (
= 0.5x 1.3219
= 0.66095C.
1.3
x
(x- )2
x-
5
7
6
4
10
9
12
11
64
Mean =
-3
-1
-2
-4
2
1
4
3
9
1
4
16
4
1
16
9
60
= 64/8= 8
65
(
Standard Deviation =
=
=
= 2.9277 (A)
1.4
1.5
1.6
(b)Negative skweness
Binomial
P(r=6) = nCr
= 10C6(
)(
= 0.70 n = 300
= 0.70
(
=
(
=
)(
= 0.02646
2.58(0.02646)
0.06826
1.8
A = p(1+i)n
:.
4p =p (1+i)6
4 = (1+i)6
1+i
1.9
66
Answer D
15,000,000
K12,500,00
0.12
1.10 PV =
nswer B
SECTION B
SOLUTION TWO
a)
Range
60-62
63-65
66-68
69-71
72-74
x
61
64
67
70
73
f
5
4
3
2
6
20
fx
305
256
201
140
438
1340
i) Mean = =
cum f
5
9
12
14
20
=1340/20 = 67
(3marks)
)x(
)= ( )=( )
(ii) X2 +3X +2
X2 + X +2X +2
X(X+1)+2(X+1)
(x+1)(x+2)
(iii) log (x+5) = 1.8
1 mark
2marks
Log to indices
X+5 =
X+5 = 63.09573 : . x = 58.09573
c) 2x +y -2z = 2
3x -4y +2z = 4
4x +3y -5z = -8
1
2
3
67
7x 2y = 8
6x +2y =18
13x = 26
X=2
(3marks)
Put x=2 in 5
7x 2y = 8- 5
7x2 -2y =8
14-8 = 2y :. y = 3
(3marks)
(1)
2x +y -2z = 2
2x2 +3 -2z = 2
4+3-2 = 2z
Z=5
(3marks)
68
SOLUTION THREE
(i) P(F) =
a)
P(M) = 1 - =
(3marks)
(3marks)
(3marks)
b) (i)
X
y
19
82
15
70
22
90
20
85
16
73
Scatter Diagram
X versas Y
1
100
80
60
2
y
40
20
0
0
10
15
20
25
x
19
15
22
20
16
92
y
x2
y2
xy
82
361
6724
1558
70
225
4900
1050
90
484
8100
1980
85
400
7225
1700
73
256
5329
1168
400
1726 32278
7456
(2marks)
=2.8916
a = -b
= 80 2.8916x18.4 = 80-53.20=26.8
Y=a+bx
y = 26.8 +2.8916x
(iii)
(5marks)
y = 26.8+2.8916(220)
= 662.952
Or K662952
(2 marks
SOLUTION FOUR
a)
Q0
P0
50
30
40
105
20
Qn
3
6
5
2
7
Pn
80
40
20
150
10
4
5
8
2
10
pnqn
qopn
320
240
200
240
160
100
300
300
100
70
1080
Pn qn
Po qn
x 100
1080
950
70
x 100 113.63
950
b)
year
cash flow
discount
factor(11%)
present value
(30,000,000.00) 1.000
(30,000,000.00)
10,000,000.00
0.901
9,009,009.01
10,000,000.00
0.812
8,116,224.33
10,000,000.00
0.731
7,311,913.81
10,000,000.00
0.659
6,587,309.74
10,000,000.00
0.593
5,934,513.28
NPV
6,958,970.18
1,000,000
1 r
71
(7marks)
SOLUTION FIVE
a) A = p(1 +i)n
A= 7,800,000; P=6,000,000;.i = 0.10/4 =0.025
7,800,000= 6,000,000(1.025)n
7800000/6000000=1.025n
1.3 = 1.025n
Taking logs
Log 1.3 = log 1.025n
Log1.3 = nlog1.025
N = log1.3/log1.025 = 0.113943/0.010724 = 10.625 quarters app.=2 years.
(3marks)
b)
x
155
165
175
185
195
f
5
10
30
70
40
155
fx
775.00
1,650.00
5,250.00
12,950.00
7,800.00
28,425.00
(i) Mean =
cumf
5
15
45
115
155
x2
24,025.00
27,225.00
30,625.00
34,225.00
38,025.00
fx2
120,125.00
272,250.00
918,750.00
2,395,750.00
1,521,000.00
5,227,875.00
= 28425/155 =183.39(3marks)
= 9.869
(iii)
(4marks)
72
c)
1
2
3
4
1
2
3
4
5 marks
SOLUTIONS SIX
(a)
(1 mark)
(1 mark)
(1 mark)
(1 mark)
D
B
130
100
50
80
A
(b)
(1 i) n 1 1
i
A = P
(1.125) 6 1
0.125
= 150
2.0273 1
0.125
150
150
150
150
73
(c)
I=
PRT 1 70 x15 x3
K 31.5m
100
100
A = P + I = 70 + 31.5 = K101.5m
(4 marks)
74
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
8.
Graph paper (if required) is provided at the end of the answer booklet.
75
In Zambia, since the government liberalized the economy in the 1990s, markets
have been left alone because it is believed that price and quantity will always move
to equilibrium.
(i)
State four benefits of economic liberalization.
(4 marks)
(ii)
(4 marks)
(b)
(5 marks)
(c)
(8 marks)
(d)
QUESTION TWO
(a)
(b)
Price(K000)
1
2
3
4
5
6
7
8
9
10
10
21
20
19
18
17
16
15
14
13
12
25
36
44
51
59
69
81
95
111
129
(4 marks)
Total revenue.
(4 marks)
Marginal revenue.
(4 marks)
Average cost.
(4 marks)
Marginal cost.
(4 marks)
Identify the profit maximization of level of output and indicate the profit.
(5 marks)
Total Marks 25
76
QUESTION THREE
(a)
(b)
(c)
(d)
(e)
QUESTION FIVE
(a)
(8 marks)
(ii)
(b)
Explain the main factors that determine the demand for money according to the
Keynes liquidity preference theory.
(6 marks)
(c)
(d)
Explain what is meant by the Central Bank being Lender of last resort.
(2 marks)
(4 marks)
Total Marks 25
77
QUESTION SIX
(a)
(4 marks)
(b)
Discuss four reasons which have led to the growth of multinational companies in
Zambia.
(8 marks)
(c)
What are the advantages of multinational companies to the host country? (5 marks)
(d)
(e)
(3 marks)
Total Marks 25
QUESTION SEVEN
(a)
(5 marks)
(b)
(c)
(d)
Outline the reasons why a country might want to control the value of its currency.
(4 marks)
(8 marks)
Total Marks 25
END OF QUESTION PAPER
78
SOLUTIONS T4
SUGGESTED SOLUTIONS
PILOT PAPER 2012
SECTION A
1(a) (i)
(ii)
(b)
Enables countries to gain access to global markets for their products and so
increase home employment and incomes.
Forces firms to become more efficient and to compete with overseas products
in home and foreign markets.
Encourages inward investment from foreign investors to revitalize home
industries.
Improves choice and quality to home consumers.
(c)
The consequences of a minimum wage would be to raise wage levels for all
workers above thee quilibrium wage rate and to reduce demand for labour and so
cause job losses.
DL
SL
Minimum Wages
Wages
WE
LD
LE
LS
Labour
2.(a)
(ii)
(b
Output
0
1
2
3
4
5
6
7
8
9
10
(iv)
3(a)
(i)
(ii)
(iii)
(iv)
TR (K000)
0
21
40
57
72
85
96
105
112
117
120
MR(K000)
21
19
17
15
13
11
9
7
5
3
AC(K000)
25
18
14.67
12.75
11.8
11.5
11.57
11.87
12.33
12.9
MC(K000)
15
11
8
7
8
10
12
14
16
18
Profit(K000)
-10
-4
4
13
21
26
27
24
17
6
-9
(b)
(c)
(d)
Price discrimination refer to a situation in which a firm sells the same product at
different prices in different markets.
(e)
81
SECTION B
4(a)
(b)
Economic growth refers to an increase in real GNP. The economy produces more
goods and Services.
Benefits of economic growth.
- Elimination of primary poverty.
- Improved quality of life.
- Rising employment.
- Improved social infrastructure such as in education and health.
(c)
(d)
(e)
Inflationary gap is created when aggregate demand is greater than the supply of
goods and Services and the economy is operating at full employment level. The
pressure to buy goods and services forces prices to go up.
Deflationary gap arises when aggregate demand is insufficient to absorb all the
output that could be produced if all resources were fully employed.
82
5. (a)
(i)
(ii)
Characteristics of money.
-
(ii)
(iii)
6.(a)
A multinational company is one that has production or service facilities in more than
one country.
83
(b)
(c)
(d)
(e)
7. (a)
(b)
Balance of payments is a measure of payments that flow into and out of the
country from other countries for a specified period. Balance of trade is the
difference between visible exports and imports in the current account.
The balance of payments consists of three parts.
84
(i)
(ii)
Capital accounts which records all financial transactions of external assets and
external liabilities.
(iii)
(c)
(d)
85
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
8.
86
Income Tax
Personal Income Tax Rates
Chargeable Income
2.
(a)
Implements, plant and machinery and commercial vehicles wear and tear
allowances:
Used normally
25%
(b)
(c)
(d)
5%
10%
10%
10%
10%
Commercial Buildings:
(f)
20%
(e)
Industrial Buildings:
2%
Farming:
Development Allowance
Farm Work Allowance
Farm Improvement Allowance
10%
100%
100%
5.
Rate
35%
15%
15%
Capital Allowances
4.
0%
25%
30%
35%
3.
Rate
5%
87
6.
K000
K000
600 000
1 600
From 12 to 17 passengers
1 200 000
3 300
From 18 to 21 passengers
2 400 000
6 600
From 22 to 35 passengers
3 600 000
10 000
From 36 to 49 passengers
4 800 000
13 000
From 50 to 63 passengers
6 000 000
16 400
7 200 000
19 700
7. Turnover Tax
3%
(ii)
Customs Duty
Excise Duty
15%
10%
(iv)
20%
30%
(iii)
25%
Customs Duty
Excise Duty
15%
0%
The minimum amount of customs duty on motor vehicles in categories from (i) to
(ii) above, is K2 000 000.
88
SECTION A
Attempt ALL multiple choice questions in this section.
Each of the following questions has only ONE correct answer. Write the letter of the correct
answer you have chosen in your booklet.
QUESTION ONE
1.1
Call Again Limited offers its customers a discount of 5% of the amount payable if
they pay within one month of the date of the sales invoice.
Call Again Limited will calculate its output VAT on the selling price
(a)
(b)
(c)
(d)
1.2
For the year ended 31st March 2012 Lusaka Limited made a trading loss of
K160,000,000 and had a property business profit of K40,000,000. For the year
ended 31 March 2011 the company made a trading profit of K48,000,000 and a
property business profit of K36,000,000.
What is the maximum amount of loss relief that Lusaka Limited can carry forward to
the year ended 31st March 2013.
(a)
(b)
(c)
(d)
1.3
K160,000,000
K159,912,000
K36 000 000
None of the above.
(2 marks)
On 30th April 2011 Mrs Sililo an employee of Kaoma Limited received a monthly
salary of K5 000 000. Her deductions were 5% NAPSA on her basic salary and K500
000 monthly standing order deduction with her local bank to her aged-mother.
Mrs Sililos net salary after deducting PAYE will be:
(a)
K3,696,000
(b)
K3,601,000
(c)
K3,626,000
(d)
K3,126,000
1.4
(2 marks)
(2 marks)
1.5
Which of the following factors indicates that Fanwell Ngoma should be treated as
employed rather than as self-employed?
(a)
(b)
(c)
(d)
1.6
(2 marks)
1.7
Fanwell
Fanwell
Fanwell
Fanwell
(2 marks)
Mr Zulu sold a piece of land to his daughter for K10,000,000 on 1 March 2012, which
he had bought at a cost of K50,000,000 five years ago. The market value of the
land on 1 March 2012 as determined by the Commissioner General was K80,000,000.
The property transfer tax payable by Mr Zulu on the sale of the land will be:
(a)
(b)
(c)
(d)
1.8
Nil
K500,000
K 2 500 000
K4 000 000
(2 marks)
Gross
Gross
Gross
Gross
The total withholding tax payable by Mrs Jibinga in the charge year 2011/12 is:
(a)
(b)
(c)
(d)
1.9
K5
K3
K2
K3
850
750
400
450
000
000
000
000
(2 marks)
The Revenue Appeals Tribunal was established under the Revenue Appeals Tribunal
Act of 1998 to do all the following except to.
(a)
(b)
(c)
(d)
90
1.10
Mrs Chibechibe who worked as an underground train driver at Coal Mines Limited for
10 years was discharged from her employment on 31 March 2012. She was paid a
lump-sum payment on medical grounds of K400,000,000.
A tax
(a)
(b)
(c)
(d)
(2 marks)
(Total 20 marks)
SECTION B
Attempt any FOUR questions in this section.
QUESTION TWO
You are a tax senior at one of the accounting firms. You had an immediate engagement to
attend to and therefore you left the Income Statement of ZibaZako Ltd, one of your firms
clients, with your recently recruited tax assistant with strict instructions to calculate the Tax
Adjusted business Profit for the year ended 31 March 2012.
When you returned to the office, he assistant presented you with the following computation
of tax adjusted business profits which contains a number of incorrect adjustments.
ZibaZako Limited: Accounting period for the year ended 31 March 2012.
Deduct
K000
Net Profit as per accounts
Subscriptions:
Zambia Chamber of Commerce and Industry
ZICA subscriptions for accounts staff
Local trade protection
Political party
Depreciation (straight line depreciation)
Office equipment acquired three years ago
(at 5% per annum)
Managing Directors car acquired threes years
ago
(at 10% per annum) private use 25%
Factory building acquired six years ago
(at 4% per annum)
Entertainment
Staff
Local Suppliers
Foreign Suppliers
Audit and accounting charges
Bad Debts
91
Add
K000
300,000
2 500
3 000
8 000
4,000
5,000
10,000
15,000
4 500
2 300
8,000
5,600
3,100
2,700
6,500
5,800
6,500
1,400
500
1,200
900
10,000
8,000
4
,250
3,600
2,500
52,350
323,250
3,100
375,600
Required:
Prepare a corrected computation of the taxable business profits of Zibazako Ltd for the
charge year 2011/12.
(Total 20 marks)
QUESTION THREE
(a)
Until 31 March 2012, Mr Edward Luapula a differently abled person had been
employed by Mansa Limited when he retired upon attainment of age 55 years. In
the tax year 2011/12 Mr Luapula received the following income from his employers
Mansa Limited:
During the time of employment, Mr Luapula was entitled to the following:
K120,000,000 payable on the
last day of each month
K3,000,000
K1,000,000 per month
Annual salary:
92
On 1 May 2011 Mr Luapula received a Labour Day award as the most hard working
employee consisting of the following:
K000
2,000
2,800
2,200
7,000
Cash
Fridge
Colour TV
Total value of award
K000
25,000
10,000
50,000
500,000
The payments made by Mr Luapula from his income during the charge year 2011/12
were as follows:
K000
51,388
6,000
10,000
6,000
73,388
Calculate the total tax payable by MrLuapula for the charge year 2011/12. (15 marks)
(b)
During the year Mr Edward Luapula had also imported a 5 tonnes Toyota Canter
Lorry from Japan at a cost of $6,000. He paid insurance of $300 and freight of
$2 000. His in-land charges from Dar-es-Salam to Nakonde boarder totalled $1 000.
At the time of arrival at Nakonde, the exchange rate at a local bank was $1 to K5
100 while the Zambia Revenue Authority exchange rate was $1 to K5 000.
While in Kitwe, Mr Luapula insured his vehicle at a cost of K8 000 000.
Required:
(i)
(ii)
(5 marks)
(Total 20 marks)
93
QUESTION FOUR
(a)
Senanga is a sole trader who has recently registered for Value Added Tax.
Senanga does not really understand certain important aspects of VAT.
Required:
(i)
Explain to her:
(ii)
Explain to her any THREE powers that VAT Inspectors have that enables
them ensure that the registered traders are performing their obligations
under VAT.
(3 marks)
(iii)
Recently Senanga was visited by her uncle, Mr Zambezi who is also a sole
trader. He would also like to register for VAT even though his turnover does
not exceed the statutory registration limit of K200 million.
Explain TWO benefits of voluntarily registering for VAT, to Mr Zambezi.
(4 marks)
(b)
425,000
400,000
175,000
Required:
Show the allocation of profits to each partner for all the accounting periods.
(10 marks)
(Total 20 marks)
94
QUESTION FIVE
(a)
Mr Lameck Zimba owns three properties which were rented out. His assessable
income and allowable expenses for the two years to 31 March 2012 were:
1
K000
Income
2010/11
2011/12
Expenses
2010/11
2011/12
Property
2
K000
3
K000
82,000
60,680
90,000
350,000
78,000
63,000
105,000
55,000
82,000
41,000
68,000
71,000
Required:
Calculate Mr Lameck Zimbas property income assessable for the 2010/11 and 2011/12 tax
years.
(10 marks)
(b)
Mr Lameck Zimba also owns 4 buses which operates as public transport for the
general public on the various Lusaka routes with the following sitting capacities:
Minibus
AZP 2001
Seating Capacity
21 passengers
AYC 9181
66 passengers
K11,700 000
AGK 566
36 passengers
K10,642 500
ALY 347
12 passengers
K4,000 000
The buses have operated daily throughout the month of March 2012.
Required:
Calculate the total tax payable by Mr Lameck Zimba on the buses for the month of
March 2012.
(5 marks)
(c)
Mrs Zimba registered a business at the Patents and Company Registration Agency
(PACRA) in November 2011.
The business is doing quite well with sales and expenses being as follows:
November 2011 Sales
December 2011 Sales
January 2012 Sales
February 2012 Sales
March 2012 Sales
K11,500,000
K11,900,000
K15,000,000
K14,800,000
K16,000,000
Expenses
Expenses
Expenses
Expenses
Expenses
K1,010,000
K2,000,000
K2,500,000
K2,300,000
K2,300,000
QUESTION SIX
(a)
Chipolopolo Plc, is a registered Zambian company which listed its shares on the
Lusaka Stock Exchange on 1 April 2011.
Its capital composition is 1,000 000 shares with a nominal value of K15,000 each.
70% of these shares were issued to indigenous Zambians and the other 30% to non
Zambians.
During the tax year ended 31 March 2012, it estimated its taxable profit to be
K3,000,000,000 (K3 billion). Provisional tax was computed and paid on the due
dates.
The actual taxable profits for the tax year ended 31 March 2012 was instead
K3,800,000,000 (K3.8 billion).
Other incomes were:
Bank interest received (net)
Debenture interest received (net)
K200,000,000
K120,000,000
(b)
(i)
State the date by which Chipolopolo Plc is supposed to submit the provisional
income tax return to Zambia Revenue Authority (ZRA) for the year 2011/12.
(1 mark)
(ii)
Calculate the withholding tax that Chipolopolo Plc is required to withhold on the
dividends paid to its shareholders.
(1 mark)
(iii)
Calculate the final company tax payable by Chipolopolo Plc for the tax year
2011/12.
(8 marks)
(iv)
State the due dates by which Chipolopolo Plc is supposed to submit the actual
return and the final payable account if any.
(2 marks)
Choma Commercial Farm Limited is growing bananas and coffee for the first time for
its local and export markets.
The expenditure incurred in the relevant charge years was as follows:
Bananas
K000
150,000
178,000
112,000
90,200
80,000
2007/08
2008/09
2009/10
2010/11
2011/12
Coffee
K000
160,000
180,000
120,000
110,000
100,000
Plough
Furniture
Toyota Land Cruiser
Choma Commercial Farm Limited did not incur any other expenditure in the charge
year 2011/12.
Required:
(i)
(ii)
Compute the tax payable by Choma Farm Ltd. for the charge year 2011/12.
(2 marks)
(Total 20 marks)
97
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
98
SOLUTION TWO
ZibaZako Limited
Tax adjusted Profit for the tax year 2011/12
99
K000
300 000
Marking
key
3 000
8 000
1
1
5 000
10 000
15 000
8 000
2 300
1
1
3 100
5,800
6 500
1
1
1
1,400
500
1 200
1
1
1
900
10 000
1
1
4 250
3 600
388 550
1
1
25 000
20 000
18 750
324 800
1
1
1
20
SOLUTION THREE
(a)
Mr Edward |Luapula
Pay as You Earn charge year 2011/12
K000
Employment Income
Salary
Allowances:
Fuel
Bonus
Leave pay
School/children allowance
Less deductions:
NAPSA
Chargeable Income
12 000 ooo x 0%
8 820 000 x 25%
29 580 000 x 30%
123 740 000 x 35%
120 000
12 000
12 000
20 000
12 000
176 000
1
1
1
1
1 860
174 140
205
874
309
388
(3 000)
(51,388)
-
1
1
25 000
10 000
50 000
85 000
(35 000)
50 000
5 000
2
8
43
54
Marking
key
$
6 000
300
2 000
Cost
Insurance
Freight
100
1
1
K000
(b)
Value for duty purposes:
Marking
key
Incidental Costs
1 000
9 300
46
6
53
5
58
9
500
975
475
347
822
411
000
000
000
500
500
600
1
6 975 000
5 347 500
1
1
1
1
9 411 600
21 734 100
SOLUTION FOUR
(a)
(i)
Sale or return consignment means a situation where the goods have not been
supplied or sold because the suppliers still owns the goods until such a time
as the customer adopts them.
(1 Mark)
(ii)
(iii)
Date of payment
Date of invoicing
2 marks
VAT Inspectors:
1 mark
1 mark
1 mark
Take samples and inspect the computers and other machine, that are
employed in preparation of accounting records and financial statements.
1 mark
Issue an assessment where it is incorrect or incomplete to collect unpaid
tax or to refund the overpaid tax.
1 mark
__
Any three possible answers
3_
(iv)
101
(4b)
Allocation of Profits
Total
K000
Kabanda
K000
Chanda
K000
Chileshe
K000
Bule
K000
106 248
35 416
()
35 416
()
35 416
()
()
318 752
_79 688
()
_79 688
()
_79 688
()
79 688
()
425 000
115 104
300 000
75 000
()
75 000
()
75 000
()
75 000
()
100 000
33 333
()
_____-
()
33 333
()
33 333
()
400 000
108 333
175 000
58 333
115 104
115 104
79 688
75 000
()
_____-
108 333
()
58 333
108 333
()
58 333
()
10 marks
SOLUTION FIVE
(a)
2010/11
0Property 1
K000
Property 2
K000
Income
Less expenses
Total
82 000
_105 000
(23 0000)
90 000
82 000
_8 000
Property 3
K000
78 000
68 000
10 000
(5 000)
60 680
55 000
_5 680
350 000
__41 000
_309 000
Nil
63 000
71 000
(8 000)
306 680
Less Property loss b/f.
Property Assessable income
(5 000)
301 680
102
10 marks
(b)
Mr Lameck Zimba
Presumptive Tax March 2012
Minibus
Seating
Capacity
AZB 2001
21
AYA 9181
66
AGK 566
36
ALY 341
12
Total presumptive Tax
K6
K19
K13
K3
600
700
000
300
x
x
x
x
Amount
K000
31
31
31
31
Marking
Key
204 600
610 700
403 000
__102300
1 320600
1
1
1
1
_1
_5
MrsZimba
Turnover Tax
(c)
Turnover Tax
November
December
January
February
March
K11
K11
K15
K14
K16
500
900
000
800
000
000
000
000
000
000
x
x
x
x
x
3%
3%
3%
3%
3%
K345
K357
K450
K444
K480
000
000
000
000
000
Due Date
14 Dec
14 Jan
14 Feb
14 Mar
14 Apr
SOLUTION SIX
(a)
(i)
(ii)
(iii)
K000
3 800 000
235 294
141 176
4 176 470
(1 050 000)
Debenture interest
(141 176 120 000)
Additional Tax payable
103
K000
1
1
1
1 461
764.5
1
1
(35 294)
1
1
2011
2011
2011
2011
2011
(iv)
1_
12
10% x
10% x
10% x
90 200
112 000
178 000
K000
=
=
=
=
9
11
17
38
_8
46
020
200
800
020
000
020
Marking Key
1
1
1
1
K000
40 000
Furniture
2 500
Land Cruiser
30 000
72 500
(ii)
Sales
Less allowable expenditure
Development allowance
Wear and tear allowances
800 000
(46 020)
(72 500)
681 480
96 222
104
1
2
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
There are FIVE questions in this paper. You are required to attempt any FOUR.
questions carry equal marks.
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
105
ALL
QUESTION ONE
A few months ago, Mama Agness Fwenkula, won herself five million kwacha on the More
money in your pocket game show aired on Muvi Television to enable the winners start
businesses. She has been hiring and firing people, almost on weekly basis and changing
how things are done by the same frequency. Upon visiting her at her new venture, you
discover that actually she had no previous experience as a manager and does not seem to
understand what her role is exactly.
Explain to Mama Fwenkula;
(a)
(10 marks)
(b)
(15 marks)
(Total: 25 Marks)
QUESTION TWO
Here is an extract of a Press Statement issued by Mopani Plc. in the Zambia Daily Mail of
Saturday, 11th February, 2012, titled: Multi-Stakeholder Committee formed to Facilitate
Dialogue over Mufulira West Mining Heap Leach Project:
Following a positive consultative meeting held at Bufuke Hall in Mufurila on Thursday,
9th February, 2012, a committee comprising members of various organizations and the
community from Butondo Township has been formed to facilitate dialogue about the
operations of Mufurila West Mining and Heap Leach Project.
(a)
(5 marks)
(b)
Identify the various possible stakeholders for the and explain their possible roles.
(8 marks)
(c)
(Total: 25 Marks)
106
QUESTION THREE
(a)
Explain the meaning of the terms: Job rotation, Job enrichment and Job enlargement
()
(b)
Discuss the effects of Job rotation, Job enrichment and Job enlargement on employee
motivation.
(c)
(i)
(ii)
()
()
(Total: 25 Marks)
QUESTION FOUR
(a)
Abraham Maslows hierarchy of needs theory is one of the most commonly known
motivation theory. List and explain the five levels of needs and briefly state the two
main principles of growth according to the theory.
(b)
()
(i)
(ii)
Discuss how a manager would use coaching and mentoring to develop capacities
of new employees in an organization.
()
(Total: 25 Marks)
QUESTION FIVE
(a)
Define the term Recruitment and explain the standard recruitment process.
()
(b)
(i)
Define the term Ethics and discuss the four ethical dimensions to managerial
decisions and actions
()
(ii)
Using an example, explain how a public sector organization, can apply ethics to
its operations.
()
(Total: 25 Marks)
107
T6: MANAGEMENT
SUGGESTED SOLUTIONS
SOLUTION ONE
(a)
2)
3)
(ii)
The monitor seeks internal and external information about issues that
can affect the organization.
2)
3)
(iii)
2)
3)
4)
108
(a)
People must be motivated to change. But often they resist change. Many people
settle for mediocrity rather than aspire to be of world class status. To successfully
implement positive change, it is important to understand why people often resist
change.
General reasons for people resistance: Several reasons for resistance to change
arise regardless of the actual content of the change:
(i)
(ii)
Inertia. Usually people do not want to disturb the status quo. The old ways
of doing things are comfortable and easy, so people do not want to shake
things up and try something new.
(iii)
Surprise. One key aspect of timing and receptivity is surprise. If the change
is sudden, unexpected or extreme, resistance may be the initial almost
reflective reaction.
(iv)
Peer Pressure. Sometimes work teams resist new ideas. Even if individual
members do not strongly oppose a change suggested by management, the
team may band together in opposition. If a group is highly cohesive and has
anti-management norms, peer pressure will cause the individuals to resist
even reasonable changes.
Self interest. Most people care less about the organisations best interest than
they do about their own best interests. They will resist change if they think it
will cause them to lose something of value.
(b)
(c)
i)
ii)
iii)
iv)
v)
Security in the past. Many people find a sense of security in the past
and when they face difficulties or unfamiliar situations people always look
back into the past. Many times people want to retain their old and
comfortable ways. Any change which threatens to disturb the old order
tends to be resisted.
vi)
Fear of the unknown. When people fear the proposed change for they
do not know the possible implications at a personal level. Many changes
to work organisation present a degree of uncertainty for instance, change
in structure or technology or method of working raises a lot of unanswered questions.
(5x 3 Marks= 15 marks)
(Total = 25 Marks)
110
SOLUTION TWO
(a) Definition: Organisational stakeholders may be defined as individuals or groups of
people who have an interest in and/or are affected by the goals, operations or
activities of the organisation or the behaviour of its members.
i.
Customers
Customers are the reasons for the existence of an organisation. They bring
money to the business, provide new product ideas and they are marketing
agents for the organisation. The success of the organisation depends on
customer patronage. The customers or consumers or clients have certain
expectations of the organisation, such as good value for money, safety and
durability of goods and services, after sale service, respect and recognition, longterm satisfaction such as convenience, serviceability consistence of supply and
full and unambiguous information.
ii.
Suppliers
Suppliers of production inputs to the organisation are major sources of
competitive advantage. The suppliers want money from the organisation for
various supplies they make. The quality of the goods and services are affected by
the quality of inputs from the suppliers. The organisation should develop suitable
social responsibility programmes to maintain a productive working relationship.
Suppliers may provide quantity or cash discounts to the organization.
iii. Government
Government is a major buyer of various goods and services. In addition, the
government enacts laws and makes regulations that should be respected and
obeyed even if it is not in the interest of the company. The regulations and
measures to control inflation such as ceilings on wage claims, control on the
sale of tobacco and display of health warnings are among the regulations
government may set. Compliance with tax laws and other legislations that affect
the organisation is important for a good corporate citizen. The government
collect tax revenues for the implementation of its various programmes.
iv. Financiers
In any business, there are shareholders, providers of investment capital such as
insurance companies, Pension funds, Building Societies, Commercial and
Investment banks who may invest their funds into an organisation and expect a
reasonable return on their invested funds. In some cases people buy shares at
a stock exchange like the Lusaka Stock Exchange and expect a dividend at the
end of a period. These financiers have an interest in the company and expect it
to be responsibly managed in the most transparent and most accountable
manner to ensure that their investment is safeguarded and earns some return
for the risk and use of their capital. These financiers expect management to
provide them with full and complete information and shareholders question top
management on policy decisions.
v.
Community Publics
The customers of the organisation are part of the community and contribute to
111
2.
3.
b.
c.
d.
e.
f.
112
g.
Distinguish between Job rotation, Job enrichment and Job enlargement and how they
motivate employees
i.
Job rotation is the practice of periodically shifting workers through a set of jobs
in a planned sequence.
a. One purpose of job rotation is to combat boredom, but its success is shortlived if tasks are too simple.
b. Another purpose of job rotation is cross training so that there is maximum
flexibility in job assignments.
c. A related purpose is employee development so that employees increase their
capabilities and understanding of various aspects of the organization.
d. A potential problem is that rotating individuals may be treated as temporary
helps and their loyalty perceived as questionable.
ii.
113
Job enrichment increases Job depth, the degree to which individuals can
plan and control the work involved in their jobs.
b.
Skill variety is the extent to which the job requires a number of activities
that require different skills.
2)
Task identity is the degree to which the job allows the completion of a
major identifiable piece of work, rather than just a fragment.
3)
Task significance is the extent to which the worker sees the job output
as having an important impact on others.
4)
5)
According to the job characteristics model, the core characteristics will increase
worker motivation only if workers experience three critical psychological states:
1) Workers must feel that the work is meaningful.
2) Workers must know they are responsible for the outcomes.
3) Workers must actually find out results.
According to the job characteristics model, outcomes of the critical states will be
higher internal work motivation, greater satisfaction of growth needs, higher general
job satisfaction, and increased work effectiveness.
The job characteristics model is likely to be used successfully under two conditions:
1) Workers have high growth-need strength, the degree to which an
individual needs personal growth and development on the job.
2) Workers are satisfied with other aspects of the job context, i.e. supervision,
pay, coworkers, and job security.
(5 each x3= 15 Marks)
114
(b)
Define a Partnership and explain and explain four (4) advantages and four
(4) disadvantages of a Partnership
vii.
viii.
More people are involved in the business so more capital can be raised.
ix.
x.
xi.
xii.
xiii.
Disadvantages of Partnerships
i.
ii.
Partners have unlimited liability and are therefore personally liable for
the debts of the partnership. Personal assets are at risk.
iii.
iv.
v.
vi.
One partners decision can be binding on all the other partners even if it
is a wrong decision. This makes the partnership a risky affair.
115
vii.
SOLUTION FOUR:
(a)
Physiological needs are basic and include needs for food, water, and
shelter.
b.
Safety needs pertain to the desire to be safe, secure and free from
threats to our existence.
c.
d.
e.
2.
Needs at one level do not have to be completely fulfilled before the next level
becomes relevant.
3.
As needs on one level are fulfilled, they cease to act as motivators and tension
develops to fulfill needs at the next level.
4.
2.
Order of needs and hierarchy may not be the same for all employees.
3.
There are certainly cultural differences which the theory did not take care.
4.
Analyzing the theory in country and cultural context, for example in China, the
hierarchy of needs found was different from Maslows theory.
(10 marks)
116
(b)
acquisition of knowledge and skills becomes the employer, the coach or mentor
available to give guidance, insight and encouragement in the learning process.
Coaching teaches us to monitor our progress and change direction when necessary.
As we reach milestone on the way, we need to celebrate our successes. Coaching is
action oriented, continuous and deliberate.
Definition
The
technique is used in a structured manner. The coach does not need to be an expert
in the subject
Characteristic of Coaching
a.
c)
b.
c.
The prime beneficiary is the individual but the organisation also benefits;
d.
e.
f.
Usually informal but can be formal,but respect for the coach is usual; and
g.
Mentoring
Mentoringrequire a number of skills, which include the role of the coach. A
mentor plays the role of a counsellor, net worker, facilitator and a coach.
Definition
117
Characteristics of Mentoring
a.
b.
c.
d.
e.
f.
g.
SOLUTION FIVE
(a)
Conduct job analysis to identify the need for recruitment and the skills
requirements for the specific job
Create a job description outlining competences, the role expectation and skills
requirements for the specific job
Step 2: Review
Step 3: Organise
Step 5: Evaluate
Step 6: Decide
(b)
The utilitarian view of ethics states that ethical decisions are made
solely on the basis of their outcomes or consequences.
2.
The rights view of ethics says that ethical decisions are concerned
with respecting and protecting individual liberties and privileges such as
the rights of privacy, freedom of conscience, free speech, life and
safety, and due process.
3.
4.
(ii)
2.
5.
6.
7.
8.
120
You have fifteen (15) minutes reading time. Use it to study the examination paper
carefully so that you understand what to do in each question. You will be told when
to start writing.
2.
3.
Enter your student number and your National Registration Card number on the front
of the answer booklet. Your name must NOT appear anywhere on your answer
booklet.
4.
5.
The marks shown against the requirement(s) for each question should be taken as
an indication of the expected length and depth of the answer.
6.
7.
8.
Graph paper (if required) is provided at the end of the answer booklet.
121
Businesses tend to have several "information systems" operating at the same time.
Discuss the following main categories of information systems and provide examples.
(i)
(ii)
(iii)
(iv)
(b)
(4
(4
(4
(4
marks)
marks)
marks)
marks)
(4 marks)
Briefly explain three (3) malware security threats that a computer user should be on
guard against that might challenge the organisation.
(15 marks)
(b)
(5 marks)
[Total marks 20]
QUESTION THREE
Distinguish between the following:
(i)
(5 marks)
(ii)
(5 marks)
(iii)
(5 marks)
(iv)
(5 marks)
[Total marks 20]
QUESTION FOUR
(a)
(5 marks)
(b)
Briefly describe the purpose and two facilities of the following software applications:
(i)
Payroll
(5 marks)
(ii)
Stock control
(5 marks)
(iii)
Spread sheet
(5 marks)
[Total marks 20]
122
(b)
(i)
(5 marks)
(ii)
(2 marks)
(iii)
(2 marks)
(iv)
(1 mark)
Your organization intends to hold a meeting next week. Issues to be discussed are
punctuality, attitude towards work and knocking off early from work.
This
information has already been communicated to all members of staff.
Required:
As Head of Department, write a reminder on the intended meeting as earlier
planned.
(10 marks)
Total marks: 20
QUESTION SIX.
The Managing Director of the organization that you work for has expressed disappointment
on the poor performance of the organization through a memorandum that was circulated to
all staff. You have been requested to investigate the causes of poor performance in the
company and submit a report.
Required:
Write a schematic report to your Managing Director on the causes of poor performance of
the company.
Total marks: 20
123
QUESTION SEVEN
The government of the republic of Nzeru in 2011 declared that colleges should enroll one
thousand accountancy students at various levels by 2012. The directive was well received
by various stakeholders. By 2012 the enrolment was as follows:
Level
Number of students
Technician
300
Licentiate
350
Professional
250
Specialised areas
100
Required:
(a)
(b)
(i)
(ii)
(4 marks)
(iii)
(2 marks)
(4 marks)
(10 marks)
Total marks: 20
124
SUGESTED SOLUTIONS
SECTION A: INFORMATION TECHNOLOGY
SOLUTION ONE
(a)(i)
(ii)
(iii)
(iv)
(b)
(4 marks)
[Total marks 20]
125
SOLUTION TWO
(a)
- Viruses
A computer virus is a type of malware that propagates by inserting a copy of itself into and
becoming part of another program. It spreads from one computer to another, leaving
infections as it travels. Viruses can range in severity from causing mildly annoying effects to
damaging data or software and causing denial-of-service (DoS) conditions. Almost all viruses
are attached to an executable file, which means the virus may exist on a system but will not
be active or able to spread until a user runs or opens the malicious host file or program.
When the host code is executed, the viral code is executed as well. Viruses spread when the
software or document they are attached to is transferred from one computer to another
using the network, a disk, file sharing, or infected e-mail attachments.
(5 marks)
-
Worms
Computer worms are similar to viruses in that they replicate functional copies of themselves
and can cause the same type of damage. In contrast to viruses, which require the spreading
of an infected host file, worms are standalone software and do not require a host program
or human help to propagate. To spread, worms either exploit vulnerability on the target
system or use some kind of social engineering to trick users into executing them. A worm
enters a computer through vulnerability in the system and takes advantage of file-transport
or information-transport features on the system, allowing it to travel unaided.
(5 marks)
-
Trojans
Trojan is a harmful piece of software that looks legitimate. Users are typically tricked into
loading and executing it on their systems. After it is activated, it can achieve any number of
attacks on the host, from irritating the user (popping up windows or changing desktops) to
damaging the host (deleting files, stealing data, or activating and spreading other malware,
such as viruses). Trojans are also known to create back doors to give malicious users access
to the system.
Unlike viruses and worms, Trojans do not reproduce by infecting other files nor do they selfreplicate. Trojans must spread through user interaction such as opening an e-mail
attachment or downloading and running a file from the Internet.
(5 marks)
(b)
126
SOLUTION THREE
(i)
(ii)
(iii)
Centralized database keeps its data in storage devices that are in a single
location connected to a single CPU, a distributed database system keeps its
data in storage devices that are possibly located in different geographical
locations and managed using a central DBMS.
A centralized database is easier to maintain and keep updated since all the
data are stored in a single location.
Furthermore, it is easier to maintain data integrity and avoid the
requirement for data duplication. But, all the requests coming to access data
are processed by a single entity such as a single mainframe, and therefore it
could easily become a bottleneck.
But with distributed databases, this bottleneck can be avoided since the
databases are parallelized making the load balanced between several
servers.
Keeping the data up to date in distributed database system requires
additional work, therefore increases the cost of maintenance and complexity
and also requires additional software for this purpose.
designing databases for a distributed database is more complex than the
same for a centralized database
(5 marks)
(iv)
SOLUTION FOUR
(a)
(b)
Briefly describe the purpose and two facilities of the following software applications:
(i)
Payroll
To provide an accurate and timely process for authorizing and compensating
employees for time worked, and for unworked accrued benefit time in
accordance with all Federal and State Wage and Hour laws.
Facilities
-
128
(ii)
-
Stock control
Maintaining inventory data on the quantity, location, and condition of supplies
and equipment due-in, on-hand, and due-out, to determine quantities of
material and equipment available and/or required for issue and to facilitate
distribution and management of materiel.
Facilities
Inventory Labels with barcodes support
Support for purchase order approval process
Vendor and customer payments tracking
(iv)
(5 marks)
Spread sheet
The manipulation of figures and functional relations and their conversion
respectively, represented in charts is the main objective behind the purpose
of spread sheets, i.e. organizing information into machine readable columns
and rows.
Facilities
- One of Excel's most useful features is that it allows users to create custom
formulas to perform calculations on their data.
- Excel also contains built-in formulas called functions that make it easy to
perform common calculations on data. .
- Spread sheets enable the analysis of data using different types of charts.
(5 marks)
SECTION B: COMMUNICATION SKILLS
SOLUTION FIVE
(a)
(ii)
Takes notes
Attentive
129
(iii)
Prepare agenda
Appoint speakers
Cancel meeting
Welcome members
Discipline members
(iv)
(b)
Contribute/speak
Vote if necessary
MEMORANDUM:
TO:
All Artists
FROM:
DATE:
SUBJECT:
It has been observed that our company has come under serious competition which
has resulted in low performance. Other organisations have been preferred by our
clients leaving us with limited jobs. To come up with profitable solutions, you are
being reminded that the meeting for brainstorming as planned will be on Friday 28th
April 2011. Items on discussion are as follows:
-
Punctuality
130
SOLUTION SIX
MUTENDELE COMPANY PLC
1.0
2.0
TERM OF REFERENCE
Reference is made to a memorandum on the above subject of 21st July 2011, in
which you requested for an investigation on the poor performance by staff at
different levels. The report was to be submitted in three (3) weeks time.
3.0
PROCEDURE
3.1
3.2
4.0
FINDINGS
The results of the interviews I had with heads of departments, supervisors and
unionized staff including the outcome of the questionnaire were generally the same.
They (results) were as follows:
4.1
4.2
4.3
4.4
5.0
Workers were dissatisfied with the lack of yearly salary increment since the
imposition of salary freeze five (5) years ago.
There was luck of individual advancement (promotion) in the company, like
some heads of department & supervisors have been in their present positions
for over five (5) years. Since the impositions of the salary freeze.
There has been lack of training for staff at different levels, and this has
caused great worry to workers, since technology is changing faster.
Employees have remained doing their jobs with old methods, which is not
good for the company.
The Unionized employees complained bitterly particularly for the lack of
housing loans in the organization to enable them construct their own homes.
CONCLUSION
The poor performance by staff at all levels came about of because of the failure by
the organization to motivate staff. The company should re-address workers concerns
by awarding them incentives of different types. The worker grievances are the main
root cause of poor performance leading to poor profitability in the company .
Workers can he motivated through.
5.1
Yearly salary increments when they are due.
5.2
5.3
5.4
6.0
RECOMMENDATIONS.
I submit the following recommendations for your consideration:
7.0
6.1
Salary freeze should be done away with and yearly salary increment should
be restored in the next years budget.
6.2
6.3
In next years budget funds for training should be provided to cater for this
purpose.
6.4
The company should introduce a housing scheme for staff at all levels. In
next years budget a provision for housing loans should be made available.
(i)
Signature
(ii)
Name
(iii)
Title
(iv)
Date
SOLUTION SEVEN
Pie-chart
(a)(i)
300
x100 30%
1000
Technician
350
x100 35%
1000
Licentiate
250
x100 25%
1000
Professional
100 100
x
10%
1000 1
Specialised areas
132
(ii)
10%
30%
25%
35%
Key
Licentiate
Technician
Professional
Specialised areas
(b)
It is easy to construct
(ii)
(iii)
(iv)
(v)
(vi)
133