Question Tag: Sales Revenue

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  • 12 Marks

MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements

Calculates cash receipts expected over three months, considering credit sales terms and bad debts.

The following information was extracted from the books of LAHA Limited:

Product P (units) Product Q (units)
November 1,500
December 2,000
January 1,000
February 2,000
March 3,000

Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.

Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)

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  • 1 Marks

FA – Nov 2014 – L1 – SA – Q16 – Financial Statements Preparation

Calculating sales revenue using the gross margin percentage and inventory figures.

Winning Nigeria Limited has compiled the following information for the year ended 31 December, 2013:

  • Opening inventory: N700,000
  • Purchases: N1,200,000
  • Closing inventory: N400,000
  • The gross margin is 40%.

Based on these figures, what is the sales revenue for the year?

A. N1,500,000
B. N1,800,000
C. N2,000,000
D. N2,500,000
E. N2,700,000

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  • 15 Marks

MA – Nov 2017 – L2 – Q2b – Cash budgets and master budgets

Calculate purchases figures and prepare a cash budget for a three-month period based on given financial information and sales projections.

b) Abigail Acheampong is in the process of preparing budgets for the period October to December 2017. The following information has been provided to assist in the budgeting process:

  • Sales are 20% cash and 80% credit. Credit sales are collected over a three month period, 15% in the month of sale, 70% in the month following sale and 15% in the second month following sale. Bad debts of 5% are anticipated on all credit sales.
  • Total sales revenue in August amounts to GH¢30,000 and September’s total sales revenue amounts to GH¢36,000.
  • Cost of sales is expected to amount to 60% of sales revenue each month.
  • The business maintains its closing inventory levels at 75% of the following month’s cost of sales. Inventory at the beginning of October is expected to amount to GH¢18,000.
  • 50% of inventory purchased is paid in the month of purchase. The remaining 50% is paid for in the month following purchase. As at 30 September 2017, amount owed for purchases are GH¢11,700.
  • A grant of GH¢20,000 is expected to be received in mid-October.
  • A second hand van which cost GH¢8,000 three years ago is expected to be sold in December 2017 for GH¢3,000. At this time the expected net book value of the van is GH¢1,800.
  • Equipment costing GH¢4,500 will be purchased and paid for in November 2017. The equipment will be depreciated on a straight line basis over three years.
  • Operating expenses are paid as incurred. These have been estimated as follows: GH¢ October 12,800 November 18,900 December 14,600 The above figures include depreciation on existing assets of GH¢2,000 per month.
  • The cash balance on 1 October is expected to amount to GH¢8,000

Required: i) Calculate the purchases figure for each month from October 2017 to December 2017.

(3 marks)

ii) Prepare a cash budget on a monthly basis and in total for the period October 2017 to December 2017. (12 marks)

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  • 20 Marks

BMIS – May 2019 – L1 – Q4 – Finance, R&D and marketing strategies

Explain the role of relationship marketing, customer care, and customer service in increasing sales revenue.

Brand Marketing Concepts Ltd (BMC) has for five years employed traditional methods of advertising and promotional messages to directly increase sales. The Accounts Officer in his year-end financial report has observed that sales revenue for two of the four products marketed by BMC have seen neither increase nor decrease for the past two years.

Required:
a) What roles can relationship marketing, customer care, and customer service play in increasing sales revenue for the two products marketed by BMC? (15 marks)

b) State FIVE (5) basic principles to be applied to develop customer relationship. (5 marks)

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  • 10 Marks

FA – Mar 2024 – L1 – Q2a – Bad and doubtful debt

Prepare the trade receivables, bad debt expense, and allowance for doubtful debts accounts for Lukay's sales transactions over three years.

Lukay is a wholesaler who is into the distribution of soft drinks. Lukay has been in operation for some time now, and the following transactions in relation to sales occurred in the first 3 years:

Year 1
Lukay made credit sales of GH¢60,000 and received GH¢45,000 from his credit customers. At the end of the year, she decided to write off Abrantie’s debt of GH¢2,400, made a specific allowance for Keke’s debt totaling GH¢1,050, and created a general allowance of 5% of the remaining trade receivables balance.

Year 2
During the second year of trading, Lukay made credit sales of GH¢90,000 and received cash of GH¢84,000, including GH¢1,200 from Abrantie. He decided to write off Keke’s debt and create a specific allowance against 50% of Yakubu’s total debt of GH¢1,800. He decided that his general allowance should now be 8% of the remaining trade receivables balance.

Year 3
Lukay made credit sales of GH¢150,000 and received cash of GH¢120,000. Additionally, he also received a cheque from Yakubu for GH¢1,800. At the year-end, he decided to create a specific allowance against Atia’s debt of GH¢15,000 and maintained his general allowance at 8%.

Required:

For each of the above years, show the trade receivables account, bad debt expense account, and allowance for doubtful debts account, and the statement of financial position extract as at each year-end. (10 marks)

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  • 12 Marks

MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements

Calculates cash receipts expected over three months, considering credit sales terms and bad debts.

The following information was extracted from the books of LAHA Limited:

Product P (units) Product Q (units)
November 1,500
December 2,000
January 1,000
February 2,000
March 3,000

Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.

Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)

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  • 1 Marks

FA – Nov 2014 – L1 – SA – Q16 – Financial Statements Preparation

Calculating sales revenue using the gross margin percentage and inventory figures.

Winning Nigeria Limited has compiled the following information for the year ended 31 December, 2013:

  • Opening inventory: N700,000
  • Purchases: N1,200,000
  • Closing inventory: N400,000
  • The gross margin is 40%.

Based on these figures, what is the sales revenue for the year?

A. N1,500,000
B. N1,800,000
C. N2,000,000
D. N2,500,000
E. N2,700,000

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  • 15 Marks

MA – Nov 2017 – L2 – Q2b – Cash budgets and master budgets

Calculate purchases figures and prepare a cash budget for a three-month period based on given financial information and sales projections.

b) Abigail Acheampong is in the process of preparing budgets for the period October to December 2017. The following information has been provided to assist in the budgeting process:

  • Sales are 20% cash and 80% credit. Credit sales are collected over a three month period, 15% in the month of sale, 70% in the month following sale and 15% in the second month following sale. Bad debts of 5% are anticipated on all credit sales.
  • Total sales revenue in August amounts to GH¢30,000 and September’s total sales revenue amounts to GH¢36,000.
  • Cost of sales is expected to amount to 60% of sales revenue each month.
  • The business maintains its closing inventory levels at 75% of the following month’s cost of sales. Inventory at the beginning of October is expected to amount to GH¢18,000.
  • 50% of inventory purchased is paid in the month of purchase. The remaining 50% is paid for in the month following purchase. As at 30 September 2017, amount owed for purchases are GH¢11,700.
  • A grant of GH¢20,000 is expected to be received in mid-October.
  • A second hand van which cost GH¢8,000 three years ago is expected to be sold in December 2017 for GH¢3,000. At this time the expected net book value of the van is GH¢1,800.
  • Equipment costing GH¢4,500 will be purchased and paid for in November 2017. The equipment will be depreciated on a straight line basis over three years.
  • Operating expenses are paid as incurred. These have been estimated as follows: GH¢ October 12,800 November 18,900 December 14,600 The above figures include depreciation on existing assets of GH¢2,000 per month.
  • The cash balance on 1 October is expected to amount to GH¢8,000

Required: i) Calculate the purchases figure for each month from October 2017 to December 2017.

(3 marks)

ii) Prepare a cash budget on a monthly basis and in total for the period October 2017 to December 2017. (12 marks)

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  • 20 Marks

BMIS – May 2019 – L1 – Q4 – Finance, R&D and marketing strategies

Explain the role of relationship marketing, customer care, and customer service in increasing sales revenue.

Brand Marketing Concepts Ltd (BMC) has for five years employed traditional methods of advertising and promotional messages to directly increase sales. The Accounts Officer in his year-end financial report has observed that sales revenue for two of the four products marketed by BMC have seen neither increase nor decrease for the past two years.

Required:
a) What roles can relationship marketing, customer care, and customer service play in increasing sales revenue for the two products marketed by BMC? (15 marks)

b) State FIVE (5) basic principles to be applied to develop customer relationship. (5 marks)

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  • 10 Marks

FA – Mar 2024 – L1 – Q2a – Bad and doubtful debt

Prepare the trade receivables, bad debt expense, and allowance for doubtful debts accounts for Lukay's sales transactions over three years.

Lukay is a wholesaler who is into the distribution of soft drinks. Lukay has been in operation for some time now, and the following transactions in relation to sales occurred in the first 3 years:

Year 1
Lukay made credit sales of GH¢60,000 and received GH¢45,000 from his credit customers. At the end of the year, she decided to write off Abrantie’s debt of GH¢2,400, made a specific allowance for Keke’s debt totaling GH¢1,050, and created a general allowance of 5% of the remaining trade receivables balance.

Year 2
During the second year of trading, Lukay made credit sales of GH¢90,000 and received cash of GH¢84,000, including GH¢1,200 from Abrantie. He decided to write off Keke’s debt and create a specific allowance against 50% of Yakubu’s total debt of GH¢1,800. He decided that his general allowance should now be 8% of the remaining trade receivables balance.

Year 3
Lukay made credit sales of GH¢150,000 and received cash of GH¢120,000. Additionally, he also received a cheque from Yakubu for GH¢1,800. At the year-end, he decided to create a specific allowance against Atia’s debt of GH¢15,000 and maintained his general allowance at 8%.

Required:

For each of the above years, show the trade receivables account, bad debt expense account, and allowance for doubtful debts account, and the statement of financial position extract as at each year-end. (10 marks)

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