Question

The statement of financial position of KY Limited at 31 December 2019 shows the following. Non-current assets GH₵ 1,350,000; current assets GH₵ 140,000; ordinary share capital GH₵ 900,000; general reserve GH₵ 150,000; 10% debentures GH₵ 200,000; current liabilities GH₵ 90,000; retained earnings GH₵ 150,000 The profit from operations for the year was GH₵ 65 000 and the finance costs were GH₵ 20 000. What is the return on capital employed for 2019?
A. 3.21%
B. 4.64%
C. 5.7%
D. 5.91%

A cheque for GH₵ 7,330 was received from Rao after allowing him a discount of GH₵ 70. It was endorsed in favour of Sen in full settlement of GH₵ 7,500. The cheque was dishonoured, but no entry for dishonor was passed in the books. If this error located after preparation of final account then which of the following rectification entry is correct?
A. Rao A/c Dr. GH₵ 7,400, Profit & Loss Adj. A/c Dr. GH₵ 100, To Sen A/c GH₵ 7,500

B. Rao A/c Dr. GH₵ 7,400, Profit & Loss Adj. A/c Dr. GH₵ 100, To Suspense A/c GH₵ 7,500

C. Rao A/c Dr. GH₵ 100, Profit & Loss Adj. A/c Dr. GH₵ 7,400, To Sen A/c GH₵ 7,500

D. Rao A/c Dr. GH₵ 100, Profit & Loss Adj. A/c Dr. GH₵ 7,400, To Suspense A/c GH₵ 7,500

A company has sales of GH₵ 1,000. The company sells three types of goods. Sixty percent of sales are of type A which is sold at a mark-up of 20%. Type B goods are sold at a margin of 30%. The cost of type B sold in the year was GH₵ 154 and total gross profit for the year was GH₵ 184. What was the gross profit for type B?
A. GH₵ 10
B. GH₵ 20
C. GH₵ 30
D. GH₵ 66

When the trial balance extracted from the books of Keman Enterprises at the year-end failed to balance, the difference was placed in a Suspense account. Identify the amount that would have been placed in suspense as a result of each of the following errors; GH₵ 218,400 paid to a supplier was posted to the supplier as GH₵ 214,800
A. Dr 3,600
B. Cr 3,600
C. Dr 218,400
D. Dr. 215,000

           

Answer 1

	I	Return on capital employed	Earning before interest and Tax
			Capital Employed
					GHC
			Earning before interest and Tax		65,000
			Capital Employed
			Total assets	1,490,000
			Less:Current Liabilities	(90,000)
					1,400,000
			Return on capital employed		4.64%
				GHC
	II		Rao A/c	7,400	Dr
			Profit & Loss Adj. A/c	100	Dr
			Sen A/c	7,500	Cr
			We have to receive money from Rao and still payable to Sen as cheque dishonoured
	III
			Type B
			Cost	154
			Gross Margin	30%
			Mark Up	43%	(30/70 X 100)
			Gross Margin	66	(154*43%)
			Sales	220
	IV		Answer:3600 debit
			Supplier	214,800	Dr
			Suspense	3,600	Dr
			Bank	218,400	Cr