SAMPLE - OCR
SAMPLE - OCR
SAMPLE - OCR
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<strong>OCR</strong> Level 3 Principal Learning in Business,<br />
Administration and Finance<br />
Unit F283: Finance and accounting in business<br />
Sample Paper<br />
Candidates answer on the question paper.<br />
Candidate<br />
Name<br />
Centre<br />
Number<br />
Candidate<br />
Number<br />
<strong>SAMPLE</strong><br />
UNIT F283<br />
Time: 2 hours<br />
INSTRUCTIONS TO CANDIDATES<br />
� Write your name clearly in capital letters, your Centre number and Candidate Number in the boxes<br />
above.<br />
� Use black ink. Pencil may be used for graphs and diagrams only.<br />
� Read each question carefully and make sure that you know what you have to do before starting your<br />
answer.<br />
� Answer all the questions.<br />
� Do not write in the bar codes.<br />
� Write your answer to each question in the space provided.<br />
INFORMATION FOR CANDIDATES<br />
� The number of marks is given in brackets [ ] at the end of each question or part question.<br />
� The total number of marks for this paper is 60.<br />
� This document consists of x pages.<br />
� A table of ratio formulae is included for your reference.<br />
This document consists of 12 printed pages.<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in<br />
business (sample)
Section A<br />
Adventura Ltd was formed two years ago when a group of three friends decided to turn a hobby<br />
into a business. Offering a range of outdoor adventure pursuits to schools, group parties,<br />
families and individuals the owners are kept busy teaching mountaineering, canoeing, abseiling,<br />
potholing etc. Over the two years the business has grown and the owners are all fully involved<br />
with the practical aspects of the outdoor pursuits, leaving little time for the management of the<br />
business. As a result they have recently appointed Sabrina Khan as Book-keeper and Matt Tripp<br />
as Credit Controller to oversee the financial side of the business. Whilst Matt is kept busy<br />
chasing late payments from customers, Sabrina is setting up a financial accounting system to<br />
replace the stack of cardboard boxes full of receipts and invoices that have built up over the last<br />
two years.<br />
Although she is very busy with her task, Sabrina is pondering over a discussion she had<br />
yesterday with one of the owners. Adventura Ltd has been approached by Westwood Green<br />
plc, a large corporation that operates across the United Kingdom. Westwood Green is looking<br />
for an organisation such as Adventura Ltd to develop residential team-building and management<br />
training courses and run them for its entire workforce over a 12 month period. This would<br />
require substantial capital input as the current premises are not large enough to cater for<br />
residential activity. Westwood Green Plc has indicated a willingness to invest in the business if<br />
Adventura Ltd can provide evidence of its financial health.<br />
1. Other than book-keeper and credit controller identify two other business finance and<br />
accounting roles.<br />
1: …...................................................................................................................................<br />
2: ................................................................................................................................... [2]<br />
2. Describe each of the following purposes of the accounting system that Sabrina has set<br />
up at Adventura Ltd:<br />
o informing business judgements and decisions:<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
o fulfilling legal requirements:<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
........................................................................................................................................ [4]<br />
3. Describe two financial documents that Adventura Ltd would need to show to Westwood<br />
Green plc to help it to decide whether or not to invest in the business.<br />
1:..........................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
............................................................................................................................................<br />
2:..........................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
......................................................................................................................................... [4]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
4. Other than an investment by Westwood Green plc, identify two suitable ways in which<br />
Adventura Ltd could raise new capital for the proposed expansion.<br />
1: …………………………………………………………………………………………………..<br />
2: .................................................................................................................................... [2]<br />
[Total for section A: 12]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
Section B<br />
In Sabrina’s previous job she worked for a large organisation that operated a financial software<br />
package which had been tailor-made for the business. Knowing that Adventura Ltd does not<br />
really require bespoke software, she is instead comparing a number of ‘off-the-shelf’ packages<br />
instead. Being Matt’s supervisor, Sabrina has organised a regular weekly meeting with him to<br />
discuss issues of importance and concern. She values Matt’s input and is including him in the<br />
consideration of the financial software packages. Today the two colleagues are also discussing<br />
the Chancellor’s annual budget speech that is due in the next few weeks. Both are aware of the<br />
impact that a change in taxation rates could have on their individual areas of responsibility within<br />
Adventura Ltd.<br />
Sabrina is also concerned with preparations for next month’s visit by the firm’s auditors Bryce,<br />
Hooper & Hall (BHH). This will be the first real test of her new financial accounting system.<br />
5. Explain how a change in the rate of corporation tax might affect the financial position of<br />
Adventura Ltd.<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
........................................................................................................................................... [2]<br />
6. Explain how an increase in the rate of income tax might affect the cashflow of Adventura<br />
Ltd.<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
............................................................................................................................................<br />
........................................................................................................................................... [3]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
7. Explain two ways in which a new financial software package could make the work of<br />
Sabrina and Matt more effective.<br />
1:..........................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
............................................................................................................................................<br />
2:..........................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
......................................................................................................................................... [4]<br />
8. Discuss why Sabrina might be concerned about next month’s visit by the firm’s auditors<br />
Bryce, Hooper and Hall (BHH).<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
......................................................................................................................................... ... [6]<br />
[Total for section B: 15]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
Section C<br />
The new financial software package, ‘Integrator’ has been installed and Sabrina has been<br />
running it in parallel with the manual accounting system for one month to check that it is<br />
operating correctly. You are employed on a temporary contract to assist her with this work. You<br />
are responsible for the manual book-keeping processes whilst Sabrina concentrated on the data<br />
input on the computer. It is now the time to produce a set of interim accounts on both systems<br />
to check that the results are the same.<br />
9. Sabrina has asked you to complete the un-shaded boxes in the following hand written<br />
trial balance that provides all the information you will need to complete the interim<br />
accounts using the manual system. [2]<br />
Trial Balance as at 30 June 2009<br />
£ Dr £ Cr<br />
Turnover (credit sales) 90395<br />
Stock at 01 July 2008 4327<br />
Credit purchases 11369<br />
Cash purchases 1684<br />
Operating expenses 36926<br />
Interest payable 580<br />
Tax on profit 14300<br />
Dividends payable 1060<br />
Buildings<br />
Equipment 57823<br />
Debtors due within one year 3690<br />
Cash at bank and cash in hand 54418<br />
Creditors falling due within one year 946<br />
Short term loans 15000<br />
Creditors falling due after more than one year 46956<br />
Share capital 150000<br />
Reserves 6700<br />
Closing stock was valued at £5251.<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
10. Use information from the trial balance in question 9 to complete the un-shaded boxes in<br />
the following profit and loss account for the manual accounting system ............................ [6]<br />
Profit and Loss Account for the year ended 30 June 2009<br />
£ £<br />
Turnover (credit sales) 90395<br />
Opening stock 4327<br />
Purchases (credit and cash)<br />
Closing stock<br />
Cost of goods sold<br />
Gross profit (loss)<br />
Operating expenses 36926<br />
Profit (loss) before interest and taxation<br />
Net interest receivable (payable)<br />
Profit (loss) on ordinary activities before taxation<br />
Tax on profit on ordinary activities<br />
Profit (loss) on ordinary activities after taxation<br />
Dividends payable<br />
Retained profit<br />
11. Use information from the trial balance in question 9 and the profit and loss account in<br />
question 10 to complete the un-shaded boxes in the following balance sheet for the<br />
manual accounting system. ................................................................................................ [9]<br />
Balance Sheet as at 30 June 2009<br />
£ £<br />
Fixed Assets<br />
Buildings<br />
Equipment 57823<br />
Total Fixed Assts<br />
Current Assets<br />
Stock 5251<br />
Debtors due within one year 3690<br />
Cash at bank and cash in hand 54418<br />
Total Current Assets<br />
Current Liabilities<br />
Creditors falling due within one year<br />
Short term loans<br />
Total Current Liabilities<br />
Net Current Assets (Liabilities)<br />
Total Assets less Current Liabilities<br />
Creditors falling due in more than one year<br />
Net Assets<br />
Capital and Reserves<br />
Share capital<br />
Reserves<br />
Profit and Loss Account<br />
Total Capital Employed<br />
[Total for section C: 17]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
Section D<br />
After a month of seriously hard work you, Sabrina and Matt appreciate the opportunity to relax a<br />
little during the weekly team meeting. Sabrina has reported favourably on your work to the three<br />
owners who have agreed to extend your contract by a further two months. Determined to gain<br />
experience during your extended contract, you have asked Sabrina if you can do a financial<br />
analysis in preparation for further talks with Westwood Green plc as a personal research project.<br />
She has agreed with the owners that you may look into the potential expansion plans and report<br />
your findings at the board meeting next week. She has provided you with the last two years<br />
accounts and the news that Westwood Green Plc might be willing to make an investment of £50<br />
000 to support the development which is likely to cost around £100 000 in total.<br />
2007<br />
(end of yr 1)<br />
2008<br />
(end of yr 2)<br />
Turnover (credit sales) 47680 74930<br />
Purchases (credit) 5486 7199<br />
Cost of goods sold 3352 5006<br />
Gross Profit (loss) 44328 69924<br />
Profit (loss) on ordinary activities after taxation 16793 20885<br />
Fixed assets 120000 165360<br />
Opening stock 0 2134<br />
Closing stock 2134 4327<br />
Debtors due within one year 1220 1468<br />
Cash in hand and at bank 27332 49524<br />
Creditors: amounts falling due within one year 686 899<br />
Creditors: amounts falling due after more than one<br />
year<br />
0 50000<br />
Capital and reserves 150000 169780<br />
Total capital employed 150000 169780<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
12. Using the table of formulae (Appendix 1) and the information provided by Sabrina,<br />
calculate the Gross Profit Margin and Stock Turnover Ratio for Adventura Ltd 2007 and<br />
2008.................................................................................................................................... [4]<br />
Gross Profit Margin for 2007<br />
Stock Turnover Ratio for 2007<br />
Gross Profit Margin for 2008<br />
Stock Turnover Ratio for 2008<br />
13. Evaluate the financial health of Adventura Ltd to determine how wise it might be for<br />
Westwood Green plc to invest in the business.<br />
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.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
.............................................................................................................................................<br />
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<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
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.............................................................................................................................................<br />
..................................................................................................................................... ..... [12]<br />
[Total for section D: 16]<br />
............................................................................................................. [Total for paper: 60]<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
Profitability Ratios<br />
Liquidity Ratios<br />
Efficiency Ratios<br />
Capital Structure Ratios<br />
Appendix 1<br />
Table of formulae for ratio analysis<br />
Gross Profit Margin<br />
Net Profit Margin<br />
Return on Capital Employed<br />
(ROCE)<br />
Current Ratio<br />
Acid Test (Quick) Ratio<br />
Stock Turnover<br />
Debtors Collection Period<br />
Creditors Collection Period<br />
Fixed Assets Turnover<br />
Net Current Assets Turnover<br />
Gearing Ratio<br />
Gross Profit<br />
---------------------------------- X 100<br />
Sales<br />
Operating Profit after Tax<br />
---------------------------------- X 100<br />
Sales<br />
Operating Profit after Tax<br />
---------------------------------- X 100<br />
Capital Employed<br />
Current Assets<br />
---------------------------<br />
Current Liabilities<br />
Current Assets less Stock<br />
---------------------------<br />
Current Liabilities<br />
Cost of Goods Sold<br />
---------------------------(No of times)<br />
Average Stock*<br />
Debtors due within one year<br />
------------------------------------ x 365 (days)<br />
Credit sales<br />
Creditors due within one year<br />
------------------------------------ x 365 (days)<br />
Credit purchases<br />
Sales<br />
--------------------------<br />
Fixed Assets<br />
Sales<br />
--------------------------<br />
Net Current Assets<br />
Long Term Liabilities<br />
--------------------------<br />
Capital Employed<br />
* Average stock calculation is (opening stock + closing stock) divided by 2.<br />
<strong>OCR</strong> Level 3 Principal Learning in Business, Administration and Finance, Unit F283 Finance and accounting in business (sample)
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