Accounting 9706 · AS & A Level · Business acquisition and merger

Business acquisition and merger — practice question

Read Source A3 in the insert supplied.
(a)[2]

Suggest two reasons why the merger allowed the savings in administrative expenses to be made.

(b)[8]

Prepare the forecast income statement for the partnership covering the year ending 30 June 2023.

(c)[10]

Prepare the partners’ forecast capital accounts covering the year ending 30 June 2023.

(d)[2]

State two advantages of keeping fixed capital accounts and current accounts in a partnership.

(e)[3]

Advise Doreen whether merging her business with Alan’s business is a good strategy or not. Justify your answer.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Selling products directly removes the need for invoicing

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