(b) Calculate the amount of input tax that will be recovered by Vostok Ltd in respect of the new premises in the

year ending 31 March 2009 and explain, using illustrative calculations, how any additional recoverable input

tax will be calculated in future years. (5 marks)

(ii) Division C is considering a decision to lower its selling price to customers external to the group to $95

per kilogram. If implemented, this decision is expected to increase sales to external customers to

70,000 kilograms.

Required:

For BOTH the current selling price of CC of $105 per kilogram and the proposed selling price of $95

per kilogram, prepare a detailed analysis of revenue, costs and net profits of BAG.

Note: in addition, comment on other considerations that should be taken into account before this selling

price change is implemented. (6 marks)

24 Sigma’s bank statement shows an overdrawn balance of $38,600 at 30 June 2005. A check against the company’s cash book revealed the following differences:

1 Bank charges of $200 have not been entered in the cash book.

2 Lodgements recorded on 30 June 2005 but credited by the bank on 2 July $14,700.

3 Cheque payments entered in cash book but not presented for payment at 30 June 2005 $27,800.

4 A cheque payment to a supplier of $4,200 charged to the account in June 2005 recorded in the cash book as a receipt.

Based on this information, what was the cash book balance BEFORE any adjustments?

A $43,100 overdrawn

B $16,900 overdrawn

C $60,300 overdrawn

D $34,100 overdrawn

(b) Explain the advantages from a tax point of view of operating the new business as a partnership rather than

as a company whilst it is making losses. You should calculate the tax adjusted trading loss for the year

ending 31 March 2008 for both situations and indicate the years in which the loss relief will be obtained.

You are not required to prepare any other supporting calculations. (10 marks)

(b) Comment on the need for ethical guidance for accountants on money laundering. (4 marks)

(ii) Briefly discuss FOUR non-financial factors which might influence the above decision. (4 marks)

(b) Comment (with relevant calculations) on the performance of the business of Quicklink Ltd and Celer

Transport during the year ended 31 May 2005 and, insofar as the information permits, its projected

performance for the year ending 31 May 2006. Your answer should specifically consider:

(i) Revenue generation per vehicle

(ii) Vehicle utilisation and delivery mix

(iii) Service quality. (14 marks)

(b) Explain how Perfect Shopper might re-structure its upstream supply chain to address the problems identified

in the scenario. (10 marks)

Note: requirement (a) includes 4 professional marks.

A central feature of the performance measurement system at TSC is the widespread use of league tables that display

each depot’s performance relative to one another.

Required:

(b) Evaluate the potential benefits and problems associated with the use of ‘league tables’ as a means of

measuring performance. (6 marks)