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  • 15 Marks

MA – Nov 2024 – L2 – Q2a – Budgetary Control

Preparation of a budgeted profit and loss account for Ankawa LTD for the year ending 31 December 2025.

Ankawa LTD makes and sells a single product ‘Dee’. The following information is available for use in the budgeting process for the year 2025.

i) Sales targets have been proposed for four quarters in 2025 and the first quarter in 2026:

Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 (2026)
Sales (GH¢) 240,000 160,000 144,000 224,000 192,000

Selling price per unit of Dee is expected to be GH¢20.

ii) Inventory levels

  • At 31 December 2024: Finished units of Dee: 3,000 units

  • Raw materials: 7,000kg

  • Closing inventory of finished product Dee at the end of each quarter is budgeted as a percentage of sales units of the following quarter:

    • Quarters 1 and 2: 25%
    • Quarters 3 and 4: 35%

  • Closing inventory of raw materials is budgeted to fall by 600kg at the end of each quarter.

iii) Product Dee unit data:

  • Material: 8kg at GH¢1.60 per kg
  • Direct labour: 1.2 hours at GH¢3.50 per hour

iv) Other budgeted quarterly expenditure for 2025:

Quarter Fixed Overhead (GH¢) Capital Expenditure (GH¢)
Quarter 1 10,000 10,000
Quarter 2 18,000 –
Quarter 3 27,000 –
Quarter 4 30,000 –

v) Depreciation

  • Property is depreciated on a straight-line basis at 5% per annum based on total cost.
  • Value of property as at 31 December 2024: GH¢100,000.

vi) Inventory of product Dee is valued on a marginal cost basis for internal budget purposes.

Required:

Prepare the budgeted profit and loss account for the year ended 31 December 2025.

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  • 5 Marks

ICMA – Nov 2024 – L1 – Q2c – Government Budgeting Challenges

Identifies and explains the challenges or limitations in government budgeting.

Challenges in Government Budgeting
Budgeting in the public sector relates to a process of translating government plans and policies into financial terms by systemically relating cost to attaining the objectives of government plans and policies. As important as this process is, there are some challenges and limitations associated with government budgeting.

Required:
State FOUR challenges (limitations) of government budgeting.

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  • 5 Marks

ATAX – Nov 2016 – L3 – Q4a – Tax Planning and Management

Lists essential considerations for tax planning using a standard checklist.

Tax Planning is anticipatory and requires an understanding of tax laws. A Tax Consultant should be versed in these two areas to render excellent advisory services to clients, government, and other institutions.

Requirements:

a) State any FIVE matters that should be considered in Tax Planning, using a standard Tax Planning Checklist. (5 Marks)

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  • 20 Marks

PSAF – May 2017 – L2 – SB – Q2 – Financial Reporting and Accountability in the Public Sector

Explain Zero-Based Budgeting stages, benefits, drawbacks, and users in the public sector.

The Zero-based budgeting system is a budgeting system that requires every item of expenditure to be justified as if the particular activity or programme is taking off for the first time.

Required:

a. State the stages involved in the Zero-based budgeting system. (5 Marks)

b. Explain THREE benefits associated with the Zero-based budgeting system. (6 Marks)

c. Explain THREE drawbacks of the Zero-based budgeting system. (6 Marks)

d. State THREE key users of the Zero-based budgeting system. (3 Marks)

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  • 1 Marks

BMF – Nov 2020 – L1 – SA – Q10 – Basics of Business Finance and Financial Markets

Calculate the amount to set aside annually to accumulate a sum for a car replacement in 5 years.

How much should Mr. Eaglet set aside at the end of each year to replace his motor car in 5 years’ time if the cost of a new car remains at ₦5 million and the rate of interest stays at 7% per annum?
A. N669,349.23
B. N779,349.23
C. N869,349.23
D. N979,349.23
E. N989,349.23

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  • 15 Marks

MGE – May 2018 – L2 – Q7 – Corporate Governance

Advises on the essential contents of a standard business plan for a new mushroom farm.

Mr. & Mrs. Phillips, your family friends, have just retired from the public service and are planning to set up a mushroom farm. They hope to use their gratuity and a loan sourced from their bank as initial capital for the business. Their bank manager requested them to present a business plan for this purpose. They approach you for advice on how to prepare a business plan, as they cannot afford to hire a consultant.

You are required to:
Advise Mr. and Mrs. Phillips on the contents of a standard business plan. (Total 15 Marks)

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  • 10 Marks

QTB – May 2017 – L1 – SB – Q6a – Statistics

Calculate the monthly cost of replacing diodes based on failure probability and determine if a student can buy a gown based on expected money.

i. The laptops that are purchased by a company have 742 diodes with a life span of five months. These diodes fail on a regular basis according to the following probability distribution:

Life (months) 1 2 3 4 5
Probability of failure 0.10 0.30 0.35 0.20 0.05

If the cost of replacing a diode is ₦100, calculate the monthly cost of replacing the diodes as they fail. (4 Marks)

ii. Tadet, a student in the Accountancy Department of a Polytechnic, has the following chances of receiving money from her relatives:

  • 45% chance of receiving ₦5,000 from her sister,
  • 33% chance of receiving ₦8,000 from her brother,
  • 16% chance of receiving ₦11,000 from her aunt,
  • 6% chance of receiving ₦15,000 from her uncle.

Determine if Tadet will be able to buy a gown worth ₦8,000 from the money she is expecting from her relatives. (6 Marks)

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  • 1 Marks

QTB – MAY 2016 – L1 – SA – Q5 – Mathematics

Calculate savings amount after a series of monthly increments

A man plans to start saving in June. He plans to set aside N3,500 in June and to increase this amount by N275 in each of the subsequent months. In April of the following year, he would have set aside

A. N 6,025

B. N 6,205

C. N 6,250

D. N 6,502

E. N 6,520

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

ABC Limited is engaged in the production of AiBiCi product and the following data were extracted from the Budget Committee’s Report:

i. Sales is expected to be 20,000 units each in months 1 and 2, this will increase by 10% each in months 3 and 4, and 5% each in months 5 and 6.

ii. Unit selling price is currently estimated at N250, and due to increased awareness, the price will move up to N300 in the fourth month.

iii. To produce one unit of AiBiCi, the following materials are required:

  • 2kgs of A @ N20/kg
  • 5kgs of B @ N5/kg
  • 2kgs of C @ N10/kg

iv. The company keeps 10% of estimated sales as closing inventory for the month. Assume no opening inventory for month 1.

You are required to compile, in tabular form, the following functional budgets for the next 6 months:

a. Sales in quantity and value. (6 Marks)

b. Production in quantity. (6 Marks)

c. Material purchase in quantity and the total cost. (8 Marks)

(Total 20 Marks)

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  • 20 Marks

BMF – May 2017 – L1 – SB – Q5 – Basics of Business Finance and Financial Markets

Preparation of a cash budget for XYZ Automobiles Nigeria Limited for the three months ending March 31, 2017.

The following projections relate to XYZ Automobiles Nigeria Limited.

Month Sales (N) Purchases (N) Wages (N) Overheads (N)
November 2016 400,000 204,000 76,000 38,000
December 2016 420,000 200,000 76,000 42,000
January 2017 460,000 196,000 80,000 46,000
February 2017 500,000 200,000 84,000 48,000
March 2017 600,000 216,000 90,000 50,000

Additional information:

  1. Cash balance on January 1, 2017, is expected to be N80,000.
  2. A plant will be installed in November 2016 at a cost of N1,000,000 and the monthly installment of N50,000 is payable from January 2017.
  3. A sum of N30,000 will be paid as dividends in the month of March 2017.
  4. Company income tax of N45,000 will be due for payment in March 2017.
  5. Advance payment of N800,000 in respect of a sale of a truck will be received in March 2017.
  6. In line with the company’s policy, 50% of sales are on a cash basis. 50% of credit sales are collected in the month immediately following the month of sales while the balance is paid a month after the payment of the first installment.
  7. All purchases are on credit and the creditors are paid fully two months after the month of purchase.
  8. Wages and overheads are paid as and when due.

Required:

Prepare a cash budget for each of the THREE months ending March 31, 2017.

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  • 15 Marks

MA – Nov 2024 – L2 – Q2a – Budgetary Control

Preparation of a budgeted profit and loss account for Ankawa LTD for the year ending 31 December 2025.

Ankawa LTD makes and sells a single product ‘Dee’. The following information is available for use in the budgeting process for the year 2025.

i) Sales targets have been proposed for four quarters in 2025 and the first quarter in 2026:

Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 (2026)
Sales (GH¢) 240,000 160,000 144,000 224,000 192,000

Selling price per unit of Dee is expected to be GH¢20.

ii) Inventory levels

  • At 31 December 2024: Finished units of Dee: 3,000 units

  • Raw materials: 7,000kg

  • Closing inventory of finished product Dee at the end of each quarter is budgeted as a percentage of sales units of the following quarter:

    • Quarters 1 and 2: 25%
    • Quarters 3 and 4: 35%

  • Closing inventory of raw materials is budgeted to fall by 600kg at the end of each quarter.

iii) Product Dee unit data:

  • Material: 8kg at GH¢1.60 per kg
  • Direct labour: 1.2 hours at GH¢3.50 per hour

iv) Other budgeted quarterly expenditure for 2025:

Quarter Fixed Overhead (GH¢) Capital Expenditure (GH¢)
Quarter 1 10,000 10,000
Quarter 2 18,000 –
Quarter 3 27,000 –
Quarter 4 30,000 –

v) Depreciation

  • Property is depreciated on a straight-line basis at 5% per annum based on total cost.
  • Value of property as at 31 December 2024: GH¢100,000.

vi) Inventory of product Dee is valued on a marginal cost basis for internal budget purposes.

Required:

Prepare the budgeted profit and loss account for the year ended 31 December 2025.

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  • 5 Marks

ICMA – Nov 2024 – L1 – Q2c – Government Budgeting Challenges

Identifies and explains the challenges or limitations in government budgeting.

Challenges in Government Budgeting
Budgeting in the public sector relates to a process of translating government plans and policies into financial terms by systemically relating cost to attaining the objectives of government plans and policies. As important as this process is, there are some challenges and limitations associated with government budgeting.

Required:
State FOUR challenges (limitations) of government budgeting.

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  • 5 Marks

ATAX – Nov 2016 – L3 – Q4a – Tax Planning and Management

Lists essential considerations for tax planning using a standard checklist.

Tax Planning is anticipatory and requires an understanding of tax laws. A Tax Consultant should be versed in these two areas to render excellent advisory services to clients, government, and other institutions.

Requirements:

a) State any FIVE matters that should be considered in Tax Planning, using a standard Tax Planning Checklist. (5 Marks)

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  • 20 Marks

PSAF – May 2017 – L2 – SB – Q2 – Financial Reporting and Accountability in the Public Sector

Explain Zero-Based Budgeting stages, benefits, drawbacks, and users in the public sector.

The Zero-based budgeting system is a budgeting system that requires every item of expenditure to be justified as if the particular activity or programme is taking off for the first time.

Required:

a. State the stages involved in the Zero-based budgeting system. (5 Marks)

b. Explain THREE benefits associated with the Zero-based budgeting system. (6 Marks)

c. Explain THREE drawbacks of the Zero-based budgeting system. (6 Marks)

d. State THREE key users of the Zero-based budgeting system. (3 Marks)

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  • 1 Marks

BMF – Nov 2020 – L1 – SA – Q10 – Basics of Business Finance and Financial Markets

Calculate the amount to set aside annually to accumulate a sum for a car replacement in 5 years.

How much should Mr. Eaglet set aside at the end of each year to replace his motor car in 5 years’ time if the cost of a new car remains at ₦5 million and the rate of interest stays at 7% per annum?
A. N669,349.23
B. N779,349.23
C. N869,349.23
D. N979,349.23
E. N989,349.23

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  • 15 Marks

MGE – May 2018 – L2 – Q7 – Corporate Governance

Advises on the essential contents of a standard business plan for a new mushroom farm.

Mr. & Mrs. Phillips, your family friends, have just retired from the public service and are planning to set up a mushroom farm. They hope to use their gratuity and a loan sourced from their bank as initial capital for the business. Their bank manager requested them to present a business plan for this purpose. They approach you for advice on how to prepare a business plan, as they cannot afford to hire a consultant.

You are required to:
Advise Mr. and Mrs. Phillips on the contents of a standard business plan. (Total 15 Marks)

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  • 10 Marks

QTB – May 2017 – L1 – SB – Q6a – Statistics

Calculate the monthly cost of replacing diodes based on failure probability and determine if a student can buy a gown based on expected money.

i. The laptops that are purchased by a company have 742 diodes with a life span of five months. These diodes fail on a regular basis according to the following probability distribution:

Life (months) 1 2 3 4 5
Probability of failure 0.10 0.30 0.35 0.20 0.05

If the cost of replacing a diode is ₦100, calculate the monthly cost of replacing the diodes as they fail. (4 Marks)

ii. Tadet, a student in the Accountancy Department of a Polytechnic, has the following chances of receiving money from her relatives:

  • 45% chance of receiving ₦5,000 from her sister,
  • 33% chance of receiving ₦8,000 from her brother,
  • 16% chance of receiving ₦11,000 from her aunt,
  • 6% chance of receiving ₦15,000 from her uncle.

Determine if Tadet will be able to buy a gown worth ₦8,000 from the money she is expecting from her relatives. (6 Marks)

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  • 1 Marks

QTB – MAY 2016 – L1 – SA – Q5 – Mathematics

Calculate savings amount after a series of monthly increments

A man plans to start saving in June. He plans to set aside N3,500 in June and to increase this amount by N275 in each of the subsequent months. In April of the following year, he would have set aside

A. N 6,025

B. N 6,205

C. N 6,250

D. N 6,502

E. N 6,520

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  • 20 Marks

MI – Nov 2015 – L1 – SB – Q2 – Budgeting

Compiles functional budgets for sales, production, and material purchases for six months.

ABC Limited is engaged in the production of AiBiCi product and the following data were extracted from the Budget Committee’s Report:

i. Sales is expected to be 20,000 units each in months 1 and 2, this will increase by 10% each in months 3 and 4, and 5% each in months 5 and 6.

ii. Unit selling price is currently estimated at N250, and due to increased awareness, the price will move up to N300 in the fourth month.

iii. To produce one unit of AiBiCi, the following materials are required:

  • 2kgs of A @ N20/kg
  • 5kgs of B @ N5/kg
  • 2kgs of C @ N10/kg

iv. The company keeps 10% of estimated sales as closing inventory for the month. Assume no opening inventory for month 1.

You are required to compile, in tabular form, the following functional budgets for the next 6 months:

a. Sales in quantity and value. (6 Marks)

b. Production in quantity. (6 Marks)

c. Material purchase in quantity and the total cost. (8 Marks)

(Total 20 Marks)

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  • 20 Marks

BMF – May 2017 – L1 – SB – Q5 – Basics of Business Finance and Financial Markets

Preparation of a cash budget for XYZ Automobiles Nigeria Limited for the three months ending March 31, 2017.

The following projections relate to XYZ Automobiles Nigeria Limited.

Month Sales (N) Purchases (N) Wages (N) Overheads (N)
November 2016 400,000 204,000 76,000 38,000
December 2016 420,000 200,000 76,000 42,000
January 2017 460,000 196,000 80,000 46,000
February 2017 500,000 200,000 84,000 48,000
March 2017 600,000 216,000 90,000 50,000

Additional information:

  1. Cash balance on January 1, 2017, is expected to be N80,000.
  2. A plant will be installed in November 2016 at a cost of N1,000,000 and the monthly installment of N50,000 is payable from January 2017.
  3. A sum of N30,000 will be paid as dividends in the month of March 2017.
  4. Company income tax of N45,000 will be due for payment in March 2017.
  5. Advance payment of N800,000 in respect of a sale of a truck will be received in March 2017.
  6. In line with the company’s policy, 50% of sales are on a cash basis. 50% of credit sales are collected in the month immediately following the month of sales while the balance is paid a month after the payment of the first installment.
  7. All purchases are on credit and the creditors are paid fully two months after the month of purchase.
  8. Wages and overheads are paid as and when due.

Required:

Prepare a cash budget for each of the THREE months ending March 31, 2017.

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