MARKING SCHEME- Final exam 09

Question No 01
Anuradhapura PLC
Statement of Profit or Loss & Other Comprehensive Income
for the year ended 31.03.2021

Sales  6 520
Cost of sales  (640)
Gross profit  5 880

Other Income -
5 880
Selling and Distribution Expenses 2 385
Administration Expenses 2 005.5
Finance Expenses 200
Other Expenses 325 (4 915.5)
Profit Before Tax 964.5
Income Tax ( 517)
Profit for the year 447.5

Other Comprehensive Income

Revaluation surplus on land 1 500
Revaluation surplus on Building 2 250 3 750
Total Comprehensive Income  4 197.5

Statement of Changes in Equity

Description Stated Capital Retained Revaluation General
Earnings Reserve Reserve
B/B/F 3 000 3 244
Dividends paid (124)
Share issue  800
TCI 447.5 3 750
B/C/D 3 800 3 567.5 3 750 -

Workings:
Expense Table
Description Sales & Distribution Administration Finance Other
Disposal expense (20)
Machine Depreciation 407.5
Disposal loss 65
Stock written off 120
Building Depreciation 200
ROUA Depreciation 715
Lease Interest  190
Revaluation gain (250)
MV depreciation  1 020
Audit fee (170-150)  20
Bad debts 230
Employee bonus 820
Tax  (382)
Trial balance values 420 940 135 285
2 385 2 000.5 325 200
 Anuradhapura PLC 
Statement of Financial Position
as at 31.03.2020 (Rs. ‘000)
Non-Current Assets
Property Plant and Equipment  12 927.5
Right of use asset  2 145

Current Assets
Closing Stock  2 180
Trade receivable  780
Cash and Cash Equivalents 340 3 300
18 372.5
Equity and Liabilities
Equity
Ordinary Shares 3 800
Revaluation Reserve 3 750
General Reserve -
Retained Earnings 3 567.5 11 117.5
-
Non-Current Liabilities
Lease Liability  1 039
Loan 3 000 4 039

Current Liabilities
Tax payable  135
Lease Liability  451
Prov.for Bonus  820
Loan  1 000
Other Payable  180
Trade payable 630
3 216
18 372.5

Note: 01 Revenue Rs. 000

Sales 4 820
Service income(500+1200) 1 700 
6 520

Note: 02 Profit before tax is computed after charging expenses including following
Rs. 000
Stock written off 120
ROUA Depreciation 715
Lease Interest 190
Provision for Bonus 820 

Note: 03 Income Tax

382 + 135 = 517

Tax payable = 517 – 382

= 135
Note: 04 Property Plant and Equipment
Description Land Building Machinery Motor
Vehicle
B/B/F 3 000 2 800 4 100 5 100
Additions
Disposal (100)
Revaluation 1 500 2 500
Depreciation on Revaluation (1 800)
B/C/D 4 500 3 500 4 000 1 000

Accumulated Depreciation
B/B/F 1 800 1 100 1 500
Depreciation for the period 200 407.5 1 020
Disposals (55)
Depreciation on Revaluation (1 800)
B/C/D (200) (1 452.5) (2 520)
N/B/V 4 500 3 300 2 547.5 2 580

Note: 05 Right to use Lease Property

2 860 = 715
4
NBV = 2 860 - 715
= 2 145

Note: 06 Trade Receivable = (810+200-230) = 780

Note: 07 Other payable (460 +20 - 300) = 180

(Audit fee) (service advance)
720 (Total Marks 40)
Question No: 02
(A)
i) Re-order Level = Maximum Consumption x Maximum lead time
= 30 x 8
= 240 Kg

ii) Maximum Stock Level = EOQ + ROL – (Minimum Consumption x Minimum lead time)
= 1 500 + 240 – ( 12 x 4 )
= 1 692Kg 

EOQ = 2 x DCo
Ch

= 2 x 6 000 x 750
20
= 1 500 Kg 

(iii) Annual ordering cost = 4 x 750

= Rs.3 000 

No of Orders = Annual demand

EOQ
= 6 000
1 500
= 4 Orders 
(iv) EOQ = 2 x D x Co
Ch

= 2 x 16 000 x 12 000
6
= 8 000 Kg 

(v) Minimum Stock level = ROL – (Average consumption x Avg. lead time)
1 680 - (55 x 17)
1 600 - 935
745 Kg 

vi) Avg. stock level = Min. stock level + EOQ

2
= 745 + 8 000
2
= 4 745 Kg 

vii) Direct material - X 150 (200x0.75) 

Y 300 (150x2) 
Direct Labour - 2400 (800x3) 
2 850 
(Total Marks 20)
(B)
Production Overhead Analysis Sheet
Cost Item Basis Amount Production Department Service
F1 F2 S1
Indirect Material Direct  1554.5 651.5 800 103
Indirect Labour Direct  1415 730 615 70
Material Handling DM usage (4:9)  520 160 360 -
Cleaning Floor area(5:10:4)  228 60 120 48
Employee welfare No of employee(11:8:1)  420 231 168 21
Machine maintenance Machine hours (45:20)  487.5 337.5 150 -
Electricity,water Floor area (5:10:4)  190 50 100 40
 4815 2220 2313 282
Re-apportion
Store (20:27)  120 162 (282)
4815 2340 2475 0

Overhead Absorption Rate (F1) = 2 340 000

4 500
= 520 per Machine hour 

Overhead Absorption Rate (F2) = 2475 000

7500
= 330 per Labour hour 
Production Cost Per Unit A B
Direct Material 1250 1050
Direct Labour - F1 700  400 
F2 900 1050

Production Overheads
A B
P1 (520x1) 520 (520x1.5) 780
P2 (330 x 3) 990  (330x3.5) 1155 
4 360  4435 

(Total Marks 20)

Question No: 03 (A)
(A) R and S Partnership
Profit correction and Appropriation account
for the year ended 31.03.2021
Drafted profit 3 420 
(+) Purchases 850 850 
4 270
(-) Rent  492
Depreciation 480 
Electricity 14
Interest - S 4
- A 46 (1036)
Net profit 3 234 

Salary
(-) R 720 
(-) S 960 (480)
200)
Interest on Capital 
(-)R 140.4
(-) S 212.4 (352.8)

Interest on Current 
(-) R 4
(-) S 7 (11)
1190.2
Profit Shares 
(-) R 892.65 
(-) S 297.55
(1190.2)
0
 Current Account (Rs. ‘000)
R S A R S A
B/B/F 40 B/B/F 80 140 -
Drawings 200 150 - Salary  720 960 - 
Interest on Capital 140.4 212.4 - 
Interest on current 4 7
Interest 4
Capital -A 40
B/C/D 1437.05 1170.95 Profit Shares 892.65 297.55 - 
1337.05 1620.95 40 1337.05 1620.95 40

Capital Account (Rs. ‘000)

R S A R S A
Goodwill 1 350 450 B/B/F 1800 1500 1 100
Loan –A 920 Goodwill 720 720 360
Current -A 40
Cash 500
B/C/D 1170 1770
2520 2220 960 2520 2220 960

Loan Account – A (Rs. ‘000)

Capital 920 

SOFP (Rs. ‘000)

Non Current Assets

PPE(6500-480)  6020

Current Assets
Inventory  110
Interest Receivable 1110
Cash  180 1400
Total Assets 7420

Equity
Capital – R 1170
S 1770 2940

Current – R 1437.05
S 1170.95 2608

NCL
Loan – A 920
Loan – S 400 1320

CL
Rent payable  492
Accrued electricity  14
Interest payable 46 552
7420

(Total Marks 30)

B)

General Journal
1) (Rs. ‘000)
Description Dr. Cr.
1 Debtors control Dr 845
Sales Dr 9
Creditors control 854
(Correction of Sales) 

2. Cash control Dr. 2.5

Creditors control 50
Purchases 50
Discount Received 2.5
(Correction of Discount Received) 

3 cash control Dr. 6

Petty cash 6
(Correction of other expense) 

4 Purchase in advance Dr. 45

Suspense 45
(Correction of Purchase in advance) 

5 Suspense Dr. 37
…………………. 37
(Correction of Purchase return) 

2) Suspense account Rs. ‘000

Difference in the T.B 8
…………. 37 Purchase in advance 45

45 45

(Total Marks 10)

Question No: 04
Nilruwan PLC 
Cash Flow Statement for the year ended 31.03.2021
Operating activities
Profit Before Tax 2 000
Adjustments
(+) depreciation  670
Interest  460
Revaluation loss  450
Disposal loss  130
1710

(-) Interest income  (42) 1 668

Profit Before Working Capital 3 668

Adjustments
Working Capital Adjustments
Increase in stocks  (192)
Increase in T/R  (152)
Decrease in T/P  (1 598) (1 942)

Cash flow from operating Activities 1 726

(-) Interest paid  (449)
(-) Tax paid  (355) (804)
NCF from operating activities 922

Investing activities
PPE acquired  (2 500)
Sale of machine  420
Interest income  42
Investment made  (175)

NCF from Investing activities (2 213)

Financing Activities
Bank Loan obtained  1 000
Dividend Paid  (110)
Share Issue  1 200
Loan repayment  (1 105)

NCF from Financing activities 985

Net change in cash and cash equivalent  (306)
(+) Opening Cash & Cash Equivalents 154
Closing Cash & Cash Equivalents  (152)

Interest Payable Tax Payable

Cash 449 B/B/F 52
B/C/D 63 I/S 460 Cash 355 B/B/F 40
512 512 B/C/D 75 I/S 390
430 430
 R/E
B/B/F 2 240
Dividends 110 550 Correct closing R/E = 3790 – 50(depreciation)
B/C/D 3 740 PAT 1 610
3 850 3 850

Profit before tax = Profit for the year + Income tax Correct closing PPE = 7 880 -50(depreciation)
2 000 = 1 610 + 390

PPE(NBV)
B/B/F 6 200 Disposal 550
Cash 2 500 Revaluation loss 450 45504
R/Gain 800 Depreciation 670 (7880-50)
B/C/D 7 830

9 500 9 500 (Total 30 Marks)

B) (i) NP Ratio = Net profit x 100

Sales
= 1 610 x 100
8 000
= 20.125% 

ii) Current Ratio = CA

CL
= 2 860
1 430
= 2:1 

iii) Quick Ratio = LA

CL
= 1 716
1 430
= 1.2:1 

(iv) Debts Ratio = Debt x 100

Debt +Equity
= 1 895
3000+3740+800+1 895 x 100
= 20% 

(v) Interest Cover Ratio = Profit Before Tax + Interest

Interest
= 2000 + 460
460
= 5.3 times 

(vi) Earning per share = 1 610 = 6.44 per share 

250

(vii) Dividend per share = 110 = 0.44 per share 

250
(viii) Debtors turnover = Credit sales
Avg. debtors
= 8000
1 600
= 5 times 

(Total 10 Marks)

Question No: 05

No. Fixed Inventories Debtor Cash Petty = Capital Profit Creditors Other
assets Cash Liabilities
B/B/F 240 280 250 125 15 650  260 -
1/4  +120 -5 +115
2/4  +180 -105 +75
4/4  -150 +147 -3
5/4  -25 +25
8/4  -108 +180 +72
9/4  +76 -4 +80
-1 -1
10/4  -234 +26 -260
12/4  +24 -40 -16
16/4  -28 -28
20/4  +48 +48
24/4  -180 -200
-50 -30
-6 -6
26/4  +32 -42 +10
28/04  -14 -14
29/4  -15 -15
30/4  +150 -150
30/04  +360 +360
Add info
depreciation -3.5 -3.5
Total 506.5 348 240 -24 35 667 110.5 155 173


Bank Reconciliation Statement (Rs. ‘000)

Balance as per adjusted cash control  (24)

(+) Un presented cheques
Cheques – 540128  50
Cheques – 540129  6
Cheques – 540131  150 206
182
(-) Un realized cheques -Rent 360 (360)
Balance as per Bank Statement (178)
 SOFP (Rs. ‘000)

Non Current Assets

Fixed assets  506.5

Current Assets
Inventory  348
Trade Receivable 240
Petty Cash  35 623
Total Assets 1129.5

Equity
Capital 682
(+) Net profit 110.5
(-) Drawings (15) 777.5

CL
Trade payable  155
Bank OD  24
Other Liabilities 173 352
1129.5

(Total Marks 40)

Question No: 06

(B) i TFC SP = 200

Mobile phone - 1 215 000 (45x27 000) AVC = 50
Advertising - 10 000 C.P.U = 150
Travelling - 5 000
(-)Cash Donation - (105 000)
1 125 000 
======
ii. BEP Qty = TFC
CPU
7 500 = 1 125 000
150 

iii. Expected Qty = TFC + Expected profit

CPU
 10 500 = 1 125 000 + 450 000
150

vi. BEP Qty = TFC

CPU
 4 500 = 1 125 000
250

(Total Marks 10)

C)
Year
0 1 2 3 4 5
Cash Inflow
Residual value 1 000
Working Capital recovery 400
Income  700 1 600 3 500 4 000 2 800
Cash Outflow
Cost of Machine (4 000)
Installation (500)
Annual Lease rent (500) (500) (500) (500) (500)
Cleaning (200)
Working Capital (400)
Operating expenses (250) (300) (800) (1 000) (600)
Net Cash flow (4 900) (50) 800 2 200 2 500 2 900
DF 1 0.9 0.82 0.75 0.68 0.62
PV (4 900) (45) 656 1 650 1 700 1 798
NPV + 859

This investment is Financially Feasible

(Total 10 Marks)