MODEL ANSWERS PAPER 1

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Exam ID 321 Qualifications: Level 3 Certificate in Bookkeeping (QCF) Accreditation number 500/8479/3 Level 3 Certificate in Manual Bookkeeping (QCF) Accreditation number 500/9260/1 Level 3

1 Exam ID 321 Qualifications: Level 3 Certificate in Bookkeeping (QCF) Accreditation number 500/8479/3 Level 3 Certificate in Manual Bookkeeping (QCF) Accreditation number 500/9260/1 Level 3 Certificate in Applied Bookkeeping (QCF) Accreditation number 500/9276/5 Examination: June 2011 Units: Record transactions and make accounting adjustments M601/0732 Unit 309 Prepare financial statements for a not for profit organisation D601/0757 Unit 308 MODEL ANSWERS PAPER 1 Suite 30, 40 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU Tel: , Fax: , mail@iab.org.uk

2 SECTION A QUESTION ONE Midlands Timber Supplies Sales Ledger Control Account and Purchase Ledger Control Account Answer Tasks A, B and C General Ledger (Extract) DR Sales Ledger Control CR 2011 Details 2011 Details 1 May Balance b/f ½ 122, May Cash book - receipts ½ 118, May Sales day book ½ 120, May 31 May Cash book discounts ½ Sales returns day book ½ 1,250 2, May Journal bad debt ½ 1, May Balance c/d 1 119, , , May Balance b/d ½ 119,140 4½ Marks DR Purchase Ledger Control CR 2011 Details 2011 Details 31 May Purchase ret ns day book ½ 3,720 1 May Balance b/f ½ 156, May Cash book payments ½ 148, May Purchase day book ½ 143, May Cash book - discounts ½ 1, May Balance c/d 1 147, , , May Balance b/d ½ 147,030 4 Marks Midlands Timber Supplies Schedules Reconciling the Balance on the Sales Ledger Control Account and the Balance on the Purchase Ledger Control Account as at 31 May 2011 with the Total of Trade Debtors per the Sales Ledger and Total of Trade Creditors per the Purchase Ledger as at that date Answer Task D Schedule Reconciling Sales Ledger Control Account Balance to Total Trade Debtors per Subsidiary Sales Ledger as at 31 May 2011 Balance per Sales Ledger Control as at 31 May 2011 ½ 119,140 (DR) Total Debtors per subsidiary Sales Ledger as at 31 May ½ ,330 (DR) Difference Marks 1

3 Page 1 Schedule Reconciling Purchase Ledger Control Account Balance to Total Trade Creditors per Subsidiary Purchase Ledger as at 31 May 2011 Balance per Purchase Ledger Control as at 31 May 2011½ Total Creditors per subsidiary Purchase Ledger as at 31 ½ May ,030 (CR) 147,030 (CR) Difference ½ NIL 1½ Marks Schedule Amending Total Debtor Balances as at 31 May 2011 Answer Task E Schedule Amending Trade Debtor Balances per the Sales Ledger as at 31 May 2011 Trade debtors per Sales Ledger as at 31 May 2011 ½ 118,330 (DR) Amendments (i) Trade debtor balance not included on list extracted ½ from subsidiary sales ledger 1,200 (DR) (ii) Credit note not posted to debtor personal account ½ (480) (CR) (iii) Transposition error in posting cheque received to ½ debtor personal account 90 (DR) Amended Sales Ledger balances ½ 119,140 (DR) Balance per Sales Ledger Control Account ½ 119,140 (DR) Page 2 3 Marks Total Marks Question 1 = 15 Marks 2

4 QUESTION TWO The Payroll Bureau General Ledger Accounts Answer - Tasks A, B, F, H and J DR Vehicles (Cost) CR Date Details Date Details 31/5/10 Balance b/f 60,000 31/5/11 Fixed assets disposal ½ 10,000 1/8/10 Bank ½ 12,000 DR Computers (Cost) CR Date Details Date Details 31/5/10 Balance b/f 25,000 DR Vehicles (Provision for Depreciation) CR Date Details Date Details 31/5/11 Fixed assets disposal ½ 4,880 31/5/10 Balance b/f 18,720 31/5/11 Depreciation expense ½ 9,632 DR Computers (Provision for Depreciation) CR Date Details Date Details 31/5/10 Balance b/f 15,000 31/5/11 Depreciation expense ½ 7,500 DR Depreciation Expense CR Date Details Date Details 31/5/11 Vehicles depreciation 1/2 9,632 31/5/11 Computers depreciation 1/2 7,500 DR Fixed Assets Disposal CR Date Details Date Details 31/5/11 Vehicles cost ½ 10,000 31/5/11 Bank ½ 3,000 31/5/11 Vehicles depreciation ½ 4,880 31/5/11 Profit and loss 1½ 2,120 10,000 10,000 Page 3 6½ Marks 3

5 Page 4 IAB L3 Cert (QCF)/June 2011 Exam MA (P1) The Payroll Bureau Fixed Asset Register (Extract) Answer - Tasks A, B and C Item Description Vehicles Date of Acquisition Capitalised Cost Annual Depreciation Accumulated Depreciation Net Book Value Disposal Proceeds Disposal Date Renault Kangoo Van (PB 07 SAL) 1/6/07 10,000 Depreciation Year ended 31/5/08 2,000 2,000 8,000 Depreciation Year ended 31/5/09 1,600 3,600 6,400 Depreciation Year ended 31/5/10 1,280 4,880 5,120 Disposed of year ended 31/5/ ½ 3,000 ½ 31/5/11 Jaguar X-Type Car (PB 08 SAL) 1/8/08 24,000 Depreciation Year ended 31/5/09 4,800 4,800 19,200 Depreciation Year ended 31/5/10 3,840 8,640 15,360 Depreciation Year ended 31/5/1l 1 3,072 ½ 11,712 ½ 12,288 Jaguar X-Type Car (PB 09 SAL) 1/7/09 26,000 Depreciation Year ended 31/5/10 5,200 5,200 20,800 Depreciation Year ended 31/5/11 1 4,160 ½ 9,360 ½ 16,640 Citroen Berlingo Van (PB 10 SAL) ½ 1/8/10 ½ 12,000 Depreciation Year ended 31/5/11 1 2,400 ½ 2,400 ½ 9,600 8 Marks

6 The Payroll Bureau Journal Answer - Tasks D, E, G and I Journal 2011 Details DR Journal Task D CR 31 May Depreciation Expense 1/4 1 9,632 Vehicles (Provision for Depreciation) 1/4 1 9,632 Depreciation on vehicles for the year ended 31 May /4 Journal Task E 31 May Depreciation Expense 1/4 1 7,500 Computers (Provision for Depreciation) 1/4 1 7,500 Depreciation on computers for the year ended 31 May /4 Journal Task G 31 May Fixed Assets Disposal 1/4 1 10,000 Vehicles (Cost) 1/4 1 10,000 Vehicles (Provision for Depreciation) 1/4 1 4,880 Fixed Assets Disposal 1/4 1 4,880 Transfer of cost and accumulated depreciation of vehicle disposed of to the Fixed Assets Disposal Account 1/4 Journal Task I 31 May Profit and Loss 1/4 1 2,120 Fixed Assets Disposal 1/4 1 2,120 Transfer of loss on disposal of vehicle to Profit and Loss Account at year end 1/4 Page 5 13½ Marks

7 The Payroll Bureau Note Answer - Task K Note Subject: Discrepancy Between the Contents of the Fixed Asset Register and Physical Count of Vehicles as at 31 May 2011 The physical count of Vehicles as at the year end 31 May 2011 does not include the Citroen Berlingo Van (PB 10 SAL) which appears in the Fixed Asset Register. The discrepancy between the items per the list resulting from the physical count and the contents of the Fixed Asset Register needs further investigation. 2 2 Marks Total Marks Question 2 = 30 Marks Page 6

8 QUESTION THREE Ideal Furniture General Ledger (Extract) Ledger Accounts Answer - Tasks B, D, F, I, K and L General Ledger (Extract) DR Provision for Doubtful Debts CR Date Details Date Details 31/5/11 Profit and loss /5/11 Balance b/f 2,250 31/5/11 Balance c/d 1 1,970 2,250 2,250 31/5/11 Balance b/d ½ 1,970 DR Sales Ledger Control CR Date Details Date Details 31/5/11 Balance b/f 199,200 31/5/11 Bad debts 1 2,200 31/5/11 Balance c/d 1 197, , ,200 31/5/11 Balance b/d ½ 197,000 DR Rates CR Date Details Date Details 31/5/11 Balance b/f 35,200 31/5/11 Prepayments 1 8,800 31/5/11 Profit and loss 1 26,400 35,200 35,200 DR Power Heat and Light CR Date Details Date Details 31/5/11 Balance b/f 3,280 31/5/11 Profit and loss 1 4,120 31/5/11 Accruals ,120 4,120 DR Operating Expenses CR Date Details Date Details 31/5/11 Balance b/f 12,480 31/5/11 Prepayments /5/11 Accruals 2 1,840 31/5/11 Profit and loss 1 13,420 14,320 14,320 Page 7

9 Ideal Furniture General Ledger (Extract) Continued DR Stock CR Date Details Date Details 1/6/10 Balance b/f 158,580 31/5/11 Trading 1 158,580 31/5/11 Trading 1 151,040 31/5/11 Balance c/d 1 151, , ,620 31/5/11 Balance b/d 1 151,040 DR Bad Debts CR Date Details Date Details 31/5/11 Sales ledger control 1 2,200 31/5/11 Profit and loss 1 2,200 DR Prepayments CR Date Details Date Details 31/5/11 Rates 1 8,800 31/5/11 Balance c/d 1 9,700 31/5/11 Operating expenses ,700 9,700 31/5/11 Balance b/d ½ 9,700 DR Accruals CR Date Details Date Details 31/5/11 Balance c/d 1 2,680 31/5/11 Power heat and light /5/11 Operating expenses 1 1,840 2,680 2,680 31/5/11 Balance b/d ½ 2, Marks Page 8

10 Ideal Furniture Schedule Amending Closing Stock Valuation Answer -Task G Schedule Amending Closing Stock Valuation Details Original closing stock valuation 152,240 Amendment: Stock item valued at selling price 2 (1,200) Amended Closing Stock Valuation at 31 May ,040 4 Marks Page 9

11 Ideal Furniture Journal Answer -Tasks A, C, E, H and J Journal 2011 Details DR CR 31 May Journal Task A Bad Debts 1 2,200 Sales Ledger Control 1 2,200 Balance on debtor account written off as bad debt Journal Task C 31 May Provision for Doubtful Debts Profit and Loss Adjustment to decrease the provision for doubtful debts at the year end Journal Task E 31 May Prepayments 1 8,800 Rates 1 8,800 Power Heat and Light Accruals Prepayments Operating Expenses Operating Expenses Accruals Adjustments to account for rates prepaid, power heat and light accrued and operating expenses prepaid and accrued at the year end , ,840 Journal Task H 31 May Trading 1 158,580 Stock (opening) 1158,580 Stock (closing) 1 151,040 Trading 1151,040 Transfer of opening and closing stock to trading at the year end Page 10

12 Ideal Furniture Journal (continued) Journal 2011 Details DR CR 31 May Journal Task J Profit and Loss 1 2,200 Bad Debts 1 2,200 Profit and Loss 1 26,400 Rates 1 26,400 Profit and Loss 1 4,120 Power Heat and Light 1 4,120 Profit and Loss Operating Expenses Transfer of expenses to profit and loss Account at the year end 31 May , , Marks Total Marks Question 3 = 55 Marks Total Marks This Unit = 100 Marks Page 11

13 SECTION B QUESTION ONE Fitness First Members Accumulated Fund as at 31 May 2010 Answer Task A Assets of Club: Clubhouse fixtures and fittings (net book value) 5,500 Sports and fitness equipment (net book value) Clubhouse rent (prepaid) 25,000 1,200 Cash and Bank 5,250 Total Assets 1 36,950 Liabilities of Club: Members subscriptions (received in advance) 1,500 Clubhouse heat and light (accrued) 250 Total Liabilities 1 1,750 Members Accumulated Fund 1 35,200 3 Marks Page 12

14 Fitness First Accounts Answer Task B DR Members Subscriptions (Income) CR Details Income & expenditure 2 16,300 Details Balance b/f 1 1,500 Balance c/d 1 1,600 Receipts ½ 16,400 17,900 17,900 Balance b/d ½ 1,600 DR Clubhouse Rent CR Details Balance b/f 1 1,200 Details Income & expenditure 2 7,600 Payments ½ 7,800 Balance c/d 1 1,400 9,000 9,000 Balance b/d ½ 1,400 DR Clubhouse Heat and Light CR Details Details Payments ½ 780 Balance b/f Balance c/d Income & expenditure ,080 1,080 Balance b/d ½ Marks Page 13

15 Fitness First Income and Expenditure Account Answer Task C Fitness First Income and Expenditure Account for the Year Ended 31 May 2011 Income Members subscriptions 1 16,300 Expenditure Clubhouse rent 1 7,600 Clubhouse heat and light Clubhouse maintenance Operating expenses 1 3,250 Depreciation ( ,500) 1 3,000 15,180 Surplus of income over expenditure 3 1,120 9 Marks Page 14

16 Fitness First Balance Sheet Answer Task D Fitness First Balance Sheet as at 31 May 2011 Fixed Assets Clubhouse fixtures and fittings (net book value) Sports and fitness equipment (net book value Current Assets Clubhouse rent (prepaid) 1 1,400 Cash and bank 1 5,820 Less Current Liabilities Members subscriptions (received in advance) 1 1,600 Clubhouse heat and light (accrued) ,220 1,900 Represented by: Members opening accumulated fund 1 35,200 Surplus in year 1 1, , ,000 31, , ,320 Members closing accumulated fund 2 36, Marks Total Marks This Unit = 40 Marks Total Marks This Paper = 140 Marks Page 15

Time Allowed: 3 hours

Time Allowed: 3 hours ANSWER BOOKLET: Exam ID 321 Qualifications: Level 3 Certificate in Bookkeeping (QCF) Accreditation number: 500/8479/3 IAB ID 300 Level 3 Certificate in Manual Bookkeeping (QCF) Accreditation number 500/9260/1