Integrated Accounting System Sage 50 Accounts Republic of Ireland. Exam Paper 2014/15

Integrated Accounting System Sage 50 Accounts Republic of Ireland Exam Paper 2014/15 1

2 nd Year Examination: Exam Paper 2014/15 Paper: IAS Sage 50 Accounts (Republic of Ireland) INSTRUCTIONS TO CANDIDATES PLEASE READ CAREFULLY For candidates answering in accordance with the law and practice of the Republic of Ireland. Candidates should answer the paper in accordance with the appropriate provisions up to and including the Finance Act 2014. The provisions of the Finance Act 2015 should be ignored. All names and addresses mentioned are entirely fictitious. This examination paper is copyright and may not be reproduced. Candidates should allocate their time carefully. On completion of the examination: 1. Ensure that you have correctly completed the examination cover sheet and any other documentation provided by the invigilator. 2. Ensure that all printouts (Payroll, Accounts and Excel) are in the order requested in each section and are correctly submitted to the invigilator. 3. Ensure that PDF reports have been correctly saved and submitted to the invigilator. 4. Ensure that there is a folder, created in the location indicated by the invigilator, showing your exam number * as the folder name. Confirm that you have saved a backup of your Sage Micropay, Sage 50 Accounts and Excel data into this folder. It is the student s responsibility to ensure that all work is saved and submitted as required above. Accounting Technicians Ireland cannot be held responsible for any marks lost as a result of the above not being completed correctly. * NB: Ensure that you use your exam number; You should not use your student registration number or college registration number.

START OF EXAM PAPER Company Information: Business Name: Soft Teddy Bears Ltd. Address: 45 Phoenix Street, Dublin 2. Telephone: 01-4503933 Fax: 01-4503934 E-mail: Website: VAT Reg. No.: Employer Reg. No.: Directors: Business: Type of Business Entity: info@teddybears.ie www.teddybears.ie 5333777W 5333777W Mr. James Munroe Ms. Julie Munroe Supply and Retail of Teddy Bears and other toys. Private Limited Company Business Profile: Soft Teddy Bears Ltd. was incorporated as a Private Limited Company in 1996. James and Julie Munroe are the directors and shareholders of the company. The majority of Soft Teddy Bears Ltd. s sales are on credit, with some cash sales. The company is registered for VAT. VAT is charged on sales at the standard rate of 23%. The company accounts for VAT on a Sales Invoice basis. The accounting year of Soft Teddy Bears Ltd. is June to May. Assume that today is the 2 nd of September 2014 and you have recently been employed as the company s accounting technician. As part of your duties you will be responsible for the administration of the payroll system and the preparation of the monthly management accounts. There are currently five employees paid on a monthly basis and all employees receive payment on a back month basis. A draft set of accounts up to 31 st August 2014 were produced by your predecessor using Sage 50 Accounts. You are aware that there are some additional entries still to be posted and there are a few changes suggested by the directors before finalising the management accounts. - 3 -

Section A Payroll: You are required to: 1. Log in to Sage Micropay (The user name is USER1, the payroll name is ATI, both passwords are PASS) and restore the setup Sage Micropay dataset from the location indicated by the invigilator. Update the payroll period to August 2014 and record all payroll information provided below, setting up any new pay elements that may be required. You are to assume that any employees NOT mentioned below, but on the payroll of the company, earned their usual salary value. All employees are entitled to 1.67 days holidays per month worked and on average an employee will work 260 days in a year. (1 Mark) 2. Set yourself up as a new employee identified by your exam number only. Insert your exam number in the first name field and complete the surname field with the word student. You commenced employment on Monday 25 th August 2014 and P2C details have been received from Revenue, as attached (refer to Appendix A), PRSI Class A applies. You will be paid at a rate of 12.75 per hour and you worked 26 hours in August (assume that you are paid by cheque). Update the payroll package accordingly and adjust your insurable weeks for August to 1 PRSI week. 3. In August 2014, James Munroe travelled 560 business kilometres in August, bringing his total business kilometres in 2014 to 6,435. He is to be reimbursed for this expense based on current civil service rates (refer to table below) assuming engine capacity is over 1,501cc. Calculate the appropriate value for reimbursement and update the payroll accordingly. Official Motor Travel in a calendar year Engine Capacity: Up to 1,200 cc Engine Capacity: 1,201 cc - 1,500 cc Engine Capacity: 1,501 cc and over Up to 6,437km 39.12 cent 46.25 cent 59.07 cent 6,438km and over 21.22 cent 23.62 cent 28.46 cent James has also been awarded a 15% pay increase effective from August 1 st. Calculate and pay the appropriate salary amount for August. 4. Julie Munroe is to be paid commission for sales made in August, calculated at 5% of her total sales activity in August. Sales for the period, in her name, totalled 5,300. She has also decided to contribute 1,200 per annum, to be deducted monthly, to the VHI scheme administered by the company. This deduction should be applied from 1 st August onwards and you should update the payroll package accordingly. 5. Craig Hennessy has decided to contribute 5% of his basic gross salary to a pension scheme every month, and the Company will additionally contribute 75 per month on his behalf, effective from 1 st of August 2014. Update the payroll package for these changes. 6. In August 2014 the company purchased a car for Ger Jameson costing 36,000, which had an Original Market Value of 43,000. He has agreed to contribute 2,100 per annum towards the running costs of the car. He travels 42,500 business km per annum. Calculate the value of the BIK (using the table below) and update the timesheet information for August accordingly. Kilometres RATE of BIK Up to 24,135 30% 24,136 to 32,180 24% 32,181 to 40,225 18% 40,226 to 48,270 12% 48,271 & Over 6% 7. Print the Gross to Net report, the Control Summary report, and a payslip for the new employee only. When you have completed processing the payroll for August 2014 ensure that you backup the Sage Micropay dataset into a folder, created in the location indicated by the invigilator, which should be titled with your exam number. (4 Marks) - 4 - Section A Total: (20 Marks)

Section B - Integrated Accounts and Double Entry: You are required to: 1. Restore the Sage 50 Accounts dataset for Teddy Bears Ltd. from the location indicated by the invigilator. (If required: The logon name is manager and there is no password). (1 Mark) 2. Adjust the company name so it reads: Soft Teddy Bears Ltd., followed by your exam number. (1 Mark) 3. Using existing nominal accounts, you are required to post the salary journal for August 2014 using the information you produced in Section A. (5 Marks) 4. The company has recently engaged a new accountant. Create the following Supplier Account in Sage 50 Accounts according to the following information: A/C Ref: AWE01 Awesome Accounts, 58 Grosvenor Buildings, Monkstown, Co Dublin. Contact Name: Jack Newsome Tel: 01-2802465 VAT Reg No: 6755954H 5. Post the details of the following invoice, received from Awesome Accounts, to Sage 50 Accounts: Invoice No: 14231 Invoice Date: 15/08/2014 To: Soft Teddy Bears Ltd 45 Phoenix Street, Dublin 2, Ireland Awesome Accounts 58 Grosvenor Buildings Monkstown, Co Dublin VAT Reg No: 6755954H For the preparation of the 2013 year end accounts and all associated activity. 1,600.00 Net: 1,600.00 VAT: 368.00 Total Due: 1,968.00 6. The following credit note was created in Microsoft Word and sent to Hasto Play Ltd. Post the details of this document to Sage 50 Accounts, and allocate it to the relevant invoice: Cute Teddy Bears Ltd 45 Phoenix Street, Dublin 2. Credit Note Ref: CR1001 Credit Note Date: 10 th August 2014 QTY DESCRIPTION NET 1 Discount allowed re Invoice 100931 321.00 Net: 321.00 VAT: 73.83 Gross: 394.83 VAT Reg. No: 5333777W - 5 -

7. On the 28 th of August 2014 the company sent a sterling draft (issued from the current account) for 4,356.21 to The Button Factory costing 5,178.22 for payment of PI/1015. A bank charge of 18.50 is included in this figure and the difference is the currency gain/loss. Enter all of the above through the purchase ledger and allocate the payment against the invoice and related charges. 8. The company entered into a new lease on August 1 st 2014 purchasing new office equipment at a cost of 24,960. Interest of 4,224 in total will be charged over 5 years. Ignoring VAT implications, you are required to: (i) Capitalise the new purchase and record the total lease liability, as agreed at the date of acquisition. (ii) Calculate, set up and post an appropriate recurring journal for the monthly lease repayment starting on August 1 st 2014 and to be processed monthly. You are instructed to use your exam number as the reference on the recurring transaction. (iii) Assuming that Lease interest is charged evenly throughout the Lease period, you are to calculate, set up and post a recurring monthly journal, using a new nominal account for Lease Interest, to charge the expense to the Profit and Loss Account on the same date as (ii) above. You are instructed to use your exam number as the reference on the recurring transaction. 9. The following business expenses were paid personally by the directors. Enter an appropriate adjustment in Sage 50 Accounts to reflect the expense incurred and outstanding liability. Date Details Net VAT Gross 12/08/2014 Stamps 28.80 0.00 28.80 23/08/2014 Printing 7.45 0.00 7.45 10. Post the following two cheque payments: PREMIER BANK PLC 52 Tara Street, Dublin 2 Date 15/08/2014 Pay: VHI Scheme One thousand, two hundred euro only 1,200.00 Cheque number: 50016 J & J Munroe Soft Teddy Bears Ltd (Allocate the following cheque payment to Invoice 7745, writing off any discrepancy to discount): PREMIER BANK PLC 52 Tara Street, Dublin 2 Date 15/08/2014 Pay: Fluff n Stuff & Co One thousand, two hundred euro only 5,650.00 Cheque number: 50017 J & J Munroe Soft Teddy Bears Ltd - 6 -

11. You are instructed to reconcile the bank account: (i) Enter any amounts from the attached bank statement (refer to Appendix B) that may not have been recorded. (4 Marks) (ii) Print the Bank Reconciliation Report available in the Bank Reconciliation Window and then reconcile the account to the bank statement for August 2014. 12. You are instructed to provide for depreciation based on the following fixed assets depreciation policies: Property 10% p.a. straight line Plant and Machinery 10% p.a. straight line Office Equipment 20% p.a. straight line Furniture and Fixtures 10% p.a. straight line Motor Vehicles 20% p.a. reducing balance Leased Assets over the life of the lease The depreciation expense for each relevant category of fixed assets should be posted to the existing separate nominal ledger accounts in the Profit and Loss. It is also the company s policy to charge a full year s depreciation in the year of acquisition with no deprecation in the year of disposal. (6 Marks) 13. As a result of a stocktake on the 31 st August 2014 it is noted that the closing stock value should be 15,200.00. Enter the appropriate adjustments in Sage 50 Accounts to ensure that the opening stocktake value is introduced into the Trading Account for August 2014, and that the correct closing stocktake value is reported in the Balance Sheet as at 31 st August 2014. 14. There was an accrual of 1,875.00 recorded in the opening trial balance which related to accountancy fees incurred in the previous period. As the invoice for that period has now been received (refer to item 5), ensure that you have recorded an appropriate journal/adjustment to reverse this opening accrual accordingly. 14. The Directors are concerned about a recent article in the Sunday Business Post and have decided to establish an allowance against the net balance outstanding in respect of GR888Games Ltd. Using existing nominal accounts, you are required to establish a bad debt provision, for the appropriate amount, dated 31 st August 2014. 15. Print the following reports from Sage 50 Accounts to the location indicated by the invigilator: A detailed audit trail by posting number starting at posting 198 and ending at the last posting number in Sage 50 Accounts, (in portrait format), A print list detailing recurring journals, A suppliers details report (Supplier Address List) for the new Supplier only, Ensure that all dates have been posted correctly, throughout the audit trail, and backup the Sage 50 Accounts dataset for Soft Teddy Bears Ltd. into the folder created in Section A which should be titled with your exam number. (10 Marks) Section B Total: (60 Marks) - 7 -

Section C - Excel: You are required to prepare a month by month budget for the 3 months from 1 st September 2014 to 30 th November 2014 based on the actual figures for June 2014. 1. Export the Profit and Loss Report for June 2014 from the Sage 50 Accounts dataset into an Excel worksheet and save the file as an Excel workbook titled with your Exam number: Unmerge the details on the spreadsheet if necessary, All nominal account descriptions should appear in column A, All values for June 2014 should appear in column B; delete any YTD information, Column B should be named June 2014, Delete any reference to direct expenses, Insert narratives for total sales, total purchases and total overheads, Ensure that there is a blank row inserted after each total line. 2. Column C should be named Variances. Insert percentage values in column C to indicate the adjustments that will be applied in the September November figures, based on the following information: Due to seasonal fluctuations it is anticipated that all Sales and Cost of Sales values will increase by 6% from the June figures, Further to recent adjustments in staffing levels, wage costs will increase by 3% in September 2014 and will then remain unchanged, All other expenses should be increased by 3% from the June 2014 values, with the exception of depreciation, Depreciation should be based on the June 2014 figures, while considering the additional charge for depreciation on the new asset addition as outlined in Section B. (Refer to the company s fixed assets depreciation polices in Section B). You are asked to indicate this additional charge on a new line in the budget spreadsheet, The monthly lease interest (as indicated in Section B) should also be accounted for, on a new line in overheads, in the budget for Quarter 2. In columns D-F you should prepare a month by month budget template for the 3 months from September 2014 to November 2014. Insert formulas to calculate the budget projections for each month using the variance percentages and other information indicated above. You are asked to use the absolute formula throughout the budget calculations, where possible/appropriate. Ensure each column is appropriately named i.e. Sept 14 etc. (5 Marks) 3. In Column G insert appropriate formulas to calculate the maximum budgeted figures in the 3 months ending 30 th November 2014 and name this column Maximum Values in Q2. Insert formulas to show the updated totals for all (i) category totals (ii) gross profit and (iii) net profit, in each month, and in the Q2 maximum column. - 8 -

4. Format the content of the spreadsheet in the following way: All text and figures should be in Arial font and in Italics, Bold and underline all month headings, All monetary values to be comma style with no decimal places, Ensure that a Top and Bottom border is applied to all Gross Profit and Net Profit information, and ensure all figures and text are visible, Using any Word Art, title the page Budget for 3 months ending 30 th November 2014, Insert today s date as a footer on the right section and your exam number on the left side section. Both should be in bold and Uppercase. (4 Marks) 5. In a new worksheet, create a Pie Chart based on the maximum figures calculated for the 3 months ending 30 th November 2014, for all overhead accounts. The Pie Chart should be formatted as indicated below. Using the Select Data option edit the series title to state Maximum Expenses, Insert your exam number as a centred footer. 6. You are asked to print each of the following reports in landscape format, and on one page only: One printout of the budget worksheet showing figures as normal, One printout of the budget worksheet adjusted to show formulas instead of figures, One printout of the Pie Chart. On completion of your activity ensure that you have saved the Excel Workbook into the folder created in Section A which should be titled with your exam number. Section C Total: (20 Marks) TOTAL EXAM MARKS: (100 MARKS) - 9 -

1,578.90 941.50 APPENDIX A

PREMIER BANK PLC Main Street, IFSC Quarter, Co Dublin STATEMENT OF ACCOUNT Cute Toys Limited 45 Phoenix Street Dublin 2 DATE PARTICULARS DEBIT CREDIT 31st August 2014 BALANCE ( ) denotes Debit Aug-14 1 Balance b/f 44,265.63 Lodgement 100021 18,081.00 Lodgement 100022 8,979.00 Rent - DD 3,250.00 68,075.63 3 Cheque 50012 8,113.05 Lease Payment 486.40 59,476.18 5 Cheque 50013 855.00 58,621.18 10 Cheque 50015 939.72 57,681.46 11 Lodgement 100023 5,004.87 62,686.33 16 Cheque 50016 1,200.00 Cheque 50017 5,650.00 55,836.33 20 DD - Monthly Rates 210.00 55,626.33 21 EFT - Teddy Bears Rule Ltd 5,792.07 DD - Eircom 325.95 61,092.45 23 ROS - VAT Payment 10,151.00 ROS - P30 by Direct Debit 6,300.00 44,641.45 28 GBP Draft 5,178.22 39,463.23 30 EFT - Staff Salaries 12,829.87 Lodgement 100024 1,476.00 Lodgement 100026 2,337.40 30,446.76 31 Transfer to Hideaway Bank Savings Account 10,000.00 20,446.76 Aug-14 31 Closing Balance 20,446.76

These pages are supplied to facilitate Workings. Students should note that no marks will be awarded for workings shown on these pages.

These pages are supplied to facilitate Workings. Students should note that no marks will be awarded for workings shown on these pages. END OF EXAM PAPER