Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
The following details are available from the books of Tops Darts Society:
(iii)
The person handling Dart sales, “all in cash,” disappeared with the money received from this source. It is unknown how much was stolen, but all darts were sold at a profit of 33⅓% on cost price.
(iv)
Three people paid life membership fees of N4,000 each. One-tenth of this amount is to be credited to the income and expenditure account each year, while the remaining is treated as prepaid.
(v)
Depreciation on equipment is to be calculated at 20%.
You are required to:
(a) Draw up a Darts Income Statement for the year 2011 to calculate the gross profit on Darts sold. The cash stolen should be credited to this account, with a debit shown in the Income and Expenditure Account.
(b) Prepare an Income and Expenditure Account for the year ended 31 December 2011, and a Statement of Financial Position as at that date.
Find Related Questions by Tags, levels, etc.
Mr. Pamona owns a corner shop in Lagos. On 30 December 2012, vandals looted his shop, stole all his inventories and cash of ₦75,000. Mr. Pamona was fully insured against theft and he has asked you to prepare his accounts to enable him estimate his insurance claim. Your investigation revealed the following:
i. Net assets on 1 January 2012:
ii. Bank statements for nine months from 1 January 2012 show the following:
Receipts:
Payments:
iii. The following were paid in cash from the till:
iv. Mr. Pamona’s gross profit margin on sales has averaged 20% in recent years.
v. The furniture and fittings are now estimated to be worth only ₦200,000.
vi. A cheque for ₦52,000 in respect of the telephone bill for the quarter ended 30 September 2012 was not shown in the bank statements until 3 October 2012.
vii. Rates for the period 1 April to 1 October, 2012, amounting to ₦75,000 were still outstanding.
viii. Trade receivables and payables were ₦270,000 and ₦1,900,000 respectively on 30 September 2012.
You are required to prepare Mr. Pamona’s:
a. Statement of Profit or Loss for the nine-month period ended 30 September 2012. (10 Marks)
b. Statement of Financial Position as at that date. (5 Marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
“Today, the ethical value of a lot of professionals is nothing to write home about. They sometimes unlawfully convert their client’s money to personal use without placing premium on the consequences of such a criminal action on their part.”
Required:
i. Explain briefly one penalty that may be imposed by the court on a person convicted of the offence of theft, fraud, or deception.
(2 Marks)
ii. State the TWO consequences of conviction for an offence.
(2 Marks)
Find Related Questions by Tags, levels, etc.
To constitute the offence of stealing, the conversion or taking of another person’s property must be done with the intention to:
A. Deprive the owner permanently of it
B. Shield the property
C. Bail the property
D. Destroy the property
E. Move the property
Find Related Questions by Tags, levels, etc.
The following encompasses Nigerian basic laws on theft, fraud, and deception, EXCEPT
A. Criminal Code
B. Penal Code
C. Corrupt Practices and Other Related Offences Act
D. Economic and Financial Crimes Commission Act
E. Bankruptcy Act
Find Related Questions by Tags, levels, etc.
As the Senior Audit Manager in MNO & Co, a firm of Chartered Accountants, you have
just had a meeting with a Senior Partner at the firm, in which he informed you that you
have to carry out an investigation requested by the Management of ECO Ltd.
i) One of ECO Ltd’s subsidiaries, PQR Ltd, has been making losses for the past year. ECO Ltd’s management is concerned about the accuracy of PQR’s most recent quarter’s management accounts. The summarised statements of profit or loss for the last three quarters are as follows:
| Quarter to 31-Mar 2018
GH¢’000 |
Quarter to 31-Dec 2017
GH¢’000 |
Quarter to 30-Sep 2017
GH¢’000 |
|
|---|---|---|---|
| Revenue | 429 | 334 | 343 |
| Opening inventory | 180 | 163 | 203 |
| Materials | 318 | 251 | 200 |
| Direct wages | 62 | 54 | 74 |
| 560 | 468 | 477 | |
| Less closing inventory | (162) | (180) | (163) |
| Cost of goods sold | 398 | 288 | 314 |
| Gross profit | 31 | 46 | 29 |
| Less overheads | (63) | (75) | (82) |
| Net loss | (32) | (29) | (53) |
| Gross profit (%) | 7.2% | 13.8% | 8.5% |
| Materials (% of revenue) | 78.3% | 70.1% | 70.0% |
| Labour (% of revenue) | 14.5% | 16.2% | 21.6% |
ii) ECO Ltd’s management board believes that the high material consumption as a percentage of revenue for the quarter to 31 March 2018 is due to one or more of the following factors:
iii) PQR Ltd has a small number of large customers and manufactures its products to each customer’s specification. The selling price of the product is determined by:
iv) The estimated costs are not compared with actual costs. Although it is possible to analyse purchase invoices for materials between customers’ orders, this analysis has not been done.
v) A physical inventory count is carried out at the end of each quarter. Items of inventory are entered on inventory sheets and valued manually. The company does not maintain perpetual inventory records and a full physical count is to be carried out at the financial year end, 30 June 2018.
vi) The direct labour cost included in the inventory valuation is small and should be assumed to be constant at the end of each quarter.
vii) Historically, the cost of materials consumed has been about 70% of revenue. The management accounts to 31 March 2018 are to be assumed to be correct.
Required:
a) Identify and describe the matters that you should consider and the procedures you should carry out in order to plan an investigation of PQR Ltd.’s losses. (10 marks)
b) Explain the matters you should consider to determine whether closing inventory at 31 March 2018 is undervalued. (3 marks)
c) Describe the tests you should plan to perform to quantify the amount of any undervaluation. (3 marks)
d) Identify and explain the possible reasons for the apparent high materials consumption in the quarter ended 31 March 2018. (2 marks)
e) Describe the tests you should plan to perform to determine whether materials consumption, as shown in the management accounts, is correct. (2 marks)
(Total: 20 marks)
Find Related Questions by Tags, levels, etc.
Elevate your professional expertise across key business domains with our comprehensive training programs
Follow us on our social media and get daily updates.
This feature is only available in selected plans.
Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.
If you’re not subscribed to a plan, click on the button below to choose a plan