Exam ID 321 Qualification: 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: 500/9262/5) Examination: June 2012 Units: Record transactions and make accounting adjustments M601/0732 Prepare financial statements for a not for profit organisation D601/0757 MODEL ANSWERS PAPER 1 Suite 5, 20 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU Tel: 0844 330 3527, Fax: 0844 330 3514, Email: mail@iab.org.uk SECTION A
QUESTION ONE Paragon Fabrics Purchase Ledger Control Account Answer Tasks A, B and C General Ledger (Extract) DR Purchase Ledger Control CR 2012 Details 2012 Details 31 May Purchase ret ns day book 1 4,200 1 May Balance b/f 1 124,560 31 May Cash book payments 1 81,050 31 May Purchase day book 1 79.440 31 May Cash book discounts 1 1,250 31 May Balance c/d 2 117,500 Paragon Fabrics 1 204,000 1 204,000 31 May Balance b/d ½ 117,500 9½ Marks Reconciliation of Balance per Purchase Ledger Control Account with the Total of Trade Creditors per the Purchase Ledger as at 31 May 2012 Answer Task D Schedule Reconciling Purchase Ledger Control Account Balance to Total Trade Creditors per Purchase Ledger as at 31 May 2012 Balance per Purchase Ledger Control as at 31 May 2012 ½ 117,500 (CR) Total trade creditors per Purchase Ledger as at 31May 2012 ½ 117,500 (CR) Difference 1 Nil 2 Marks Page 1
Paragon Fabrics Schedule Amending Trade Debtor Balances per the Sales Ledger as at 31 May 2012 Answer Task E Schedule Amending Trade Debtor Balances per the Sales Ledger as at 31 May 2012 Trade debtors per Sales Ledger as at 31 May 2012 ½ 106,660 (DR) Amendments (i) Customer personal account balance not entered on the list of balances taken from the Sales Ledger as at 31 May 2012. ½ 3,200 (DR) (ii) Cheque received from a customer not posted to the customer personal account in the Sales Ledger ½ (4,600) (CR) (iii) Invoice issued to a customer not posted to the customer personal account in the Sales Ledger ½ 8,440 (DR) Amended Sales Ledger balances 1 113,700 (DR) Balance per Sales Ledger Control Account ½ 113,700 (DR) 3½ Marks Total Marks Question 1 = 15 Marks Page 2 QUESTION TWO
Elite Travel General Ledger Accounts Answer - Tasks A, B, C, F,H and J DR Limousines (Cost) CR Date Details Date Details 31/5/11 Balance b/f 1 156,000 31/5/12 Fixed assets disposal 1 40,000 1/9/11 Bank ½ 80,000 DR Limousines (Provision for Depreciation) CR Date Details Date Details 31/5/12 Fixed assets disposal 1 23,616 31/5/11 Balance b/f 1 65,376 31/5/12 Depreciation expense 1 30,848 DR Depreciation Expense CR Date Details Date Details 31/5/12 Limousines dep n 1 30,848 DR Fixed Assets Disposal CR Date Details Date Details 31/5/12 Limousines cost ½ 40,000 29/2/12 Bank 1 17,250 31/5/12 Profit and loss 1 866 31/5/12 Limousines dep n ½ 23,616 40,866 40,866 9½ Marks Page 3
Page 4 IAB L3 Cert (QCF)/June 2012 Exam MA (P1) Elite Travel Fixed Asset Register (Extract) Answer - Tasks B, C and D Item Description Limousines Date of Acquisition Capitalised Cost Annual Depreciation Accumulated Depreciation Net Book Value Disposal Proceeds Disposal Date Lincoln 120 (ET/0001) 1/6/07 40,000 Depreciation Year ended 31/5/08 8,000 8,000 32,000 Depreciation Year ended 31/5/09 6,400 14,400 25,600 Depreciation Year ended 31/5/10 5,120 19,520 20,480 Depreciation Year ended 31/5/11 4,096 23,616 16,384 Disposed of ½ 17,250 ½ 29/2/2012 Chrysler 130 (ET/0002) 1/9/09 56,000 Depreciation Year ended 31/5/10 11,200 11,200 44,800 Depreciation Year ended 31/5/11 8,960 20,160 35,840 Depreciation Year ended 31/5/12 1 7,168 ½ 27,328 ½ 28,672 - - - Hummer H3 (ET/0003) 1/2/10 60,000 Depreciation Year ended 31/5/10 12,000 12,000 48,000 Depreciation Year ended 31/5/11 9,600 21,600 38,400 Depreciation Year ended 31/5/12 1 7,680 ½ 29,280 ½ 30,720 Lincoln Evolution (ET/0004) ½ ½ 1/9/11 ½ 80,000 Depreciation Year ended 31/5/12 1 16,000 ½ 16,000 ½ 64,000 8½ Marks
Elite Travel Journal Answer - Tasks E, G and I Journal 2012 Details DR Journal Task E CR 31 May Depreciation Expense 1/4 1 30,848 Limousines (Provision for Depreciation) 1/4 1 30,848 Depreciation on limousines for the year ended 31 May 2012 1/4 Journal Task G 31 May Fixed Assets Disposal 1/4 1 40,000 Limousines (Cost) 1/4 1 40,000 Limousines (Provision for Depreciation) 1/4 Fixed Assets Disposal 1/4 Transfer of the cost and accumulated depreciation of limousine disposed of to the Fixed Assets Disposal account at the year end 31 May 2012 1/2 1 23,616 1 23,616 Journal Task I 31 May Fixed Assets Disposal 1/4 1 866 Profit and Loss 1/4 1 866 Transfer of profit on disposal of limousine to the Profit and Loss Account at the year end 31 May 2012 1/4 11 Marks Page 5
Elite Travel Note Answer - Task K Note Subject: Discrepancy between the contents of the Fixed Asset Register and physical count of limousines as at 31 May 2012 The physical count of limousines as at the year end 31 May 2012 does not include the Chrysler 130(ET/0002) 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 so as to ascertain the reason for the discrepancy. 1 1 Mark Total Marks Question 2 = 30 Marks Page 6
QUESTION THREE Riverdale Pet Supplies 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 31/5/12 Balance c/d 1 1,030 31/5/11 Balance b/f 750 31/5/12 Profit and loss 2 280 1,030 1,030 31/5/12 Balance b/d ½ 1,030 DR Sales Ledger Control CR Date Details Date Details 31/5/12 Balance b/f 104,200 31/5/12 Bad debts 2 1,200 31/5/12 Balance c/d 1 103,000 104,200 104,200 31/5/12 Balance b/d ½ 103,000 DR Rates CR Date Details Date Details 31/5/12 Balance b/f 24,800 31/5/12 Prepaid expenses 1 12,000 31/5/12 Profit and loss 2 12,800 24,800 24,800 DR Heat and Light CR Date Details Date Details 31/5/12 Balance b/f 3,660 31/5/12 Profit and loss 2 4,368 31/5/12 Accrued expenses 1 708 4,368 4,368 DR Rent Receivable CR Date Details Date Details 31/5/12 Profit and loss 2 9,600 31/5/12 Balance b/f 8,800 31/5/12 Accrued income 2 800 9,600 9,600 Page 7
Riverdale Pet Supplies General Ledger (Extract) Continued DR Stock CR Date Details Date Details 1/6/11 Balance b/f 156,620 31/5/12 Trading 1 156,620 31/5/12 Trading 1 162,000 31/5/12 Balance c/d 1 162,000 318,620 318,620 31/5/12 Balance b/d 1 162,000 DR Bad Debts CR Date Details Date Details 31/5/12 Sales ledger control 1 1,200 31/5/12 Profit and loss 1 1,200 DR Prepaid Expenses and Accrued Income CR Date Details Date Details 31/5/12 Rates 1 12,000 31/5/12 Balance c/d 1 12,800 31/5/12 Rent receivable 1 800 12,800 12,800 31/5/12 Balance b/d ½ 12,800 DR Accrued Expenses CR Date Details Date Details 31/5/12 Balance c/d 1 708 31/5/12 Heat and light 1 708 708 708 31/5/12 Balance b/d ½ 708 29 Marks Page 8
Riverdale Pet Supplies Schedule Amending Closing Stock Valuation Answer -Task G Schedule Amending Closing Stock Valuation as at 31 May 2012 Details Original closing stock valuation 163,500 Amendment: Value of stock item (Doggy Treats) reduced from selling price to cost price 2 (1,500) Amended Closing Stock Valuation at 31 May 2012 2 162,000 4 Marks Page 9
Riverdale Pet Supplies Journal Answer -Tasks A, C, E, H and J Journal 2012 Details DR CR 31 May Journal Task A Bad Debts 1 1,200 Sales Ledger Control 1 1,200 Balance on debtor account written off as bad debt Journal Task C 31 May Profit and Loss 1 280 Provision for Doubtful Debts 1 280 Adjustment to increase the provision for doubtful debts at the year end Journal Task E 31 May Prepaid Expenses and Accrued Income 1 12,000 Rates 1 12,000 Heat and Light 1 708 Accrued Expenses 1 708 Prepaid Expenses and Accrued Income Rent Receivable Adjustments to account for expenses prepaid and rent receivable accrued at the year end 1 800 1 800 Journal Task H 31 May Trading 1 156,620 Stock (opening) 1156,620 Stock (closing) 1 162,000 Trading 1162,000 Transfer of opening and closing stock to the Trading Account at the year end Page 10
Riverdale Pet Supplies Journal (continued) Journal 2012 Details DR CR 31 May Journal Task J Profit and Loss 1 1,200 Bad Debts 1 1,200 Profit and Loss 1 12,800 Rates 1 12,800 Profit and Loss 1 4,368 Heat and Light 1 4,368 Rent Receivable Profit and Loss Transfer of income and expenses to the Profit and Loss Account at the year end 31 May 2012 1 9,600 1 9,600 22 Marks Total Marks Question 3 = 55 Marks Total Marks This Unit = 100 Marks Page 11
SECTION B QUESTION ONE Lakeside Dinghy Club Members Accumulated Fund as at 1 June 2011 Answer Task A Assets of Club: Cash at bank ½ 6,840 Club dinghies and safety equip t (net book value) ½ 32,000 Clubhouse fixtures and fittings (net book value) ½ 4,500 Club safety boat (net book value) ½ 12,500 Clubhouse rent (prepaid) ½ 1,000 Total Assets 56,840 Liabilities of Club: Members subscriptions (received in advance) ½ 5,120 Clubhouse heat and light (accrued) ½ 320 Total Liabilities 5,440 Members Accumulated Fund ½ 51,400 4 Marks Page 12
Lakeside Dinghy Club Accounts Answer Task B DR Members Subscriptions (Income) CR Details Income & expenditure 2 67,480 Details Balance b/f 1 5,120 Balance c/d 1 5,240 Receipts ½ 67,600 72,720 72,720 Balance b/d ½ 5,240 DR Clubhouse Rent CR Details Balance b/f 1 1,000 Details Income & expenditure 2 12,000 Payments ½ 12,200 Balance c/d 1 1,200 13,200 13,200 Balance b/d ½ 1,200 DR Clubhouse Heat and Light CR Details Details Payments ½ 1,260 Balance b/f 1 320 Balance c/d 1 400 Income & expenditure 2 1,340 1,660 1,660 Balance b/d ½ 400 15 Marks Page 13
Lakeside Dinghy Club Income and Expenditure Account Answer Task C Lakeside Dinghy Club Income and Expenditure Account for the Year Ended 31 May 2012 Income Members subscriptions 1 67,480 Dinghy hire ½ 4,650 Sailing lessons ½ 32,120 104,250 Expenditure Instructor salaries ½ 36,480 Clubhouse heat and light 1 1,340 Clubhouse rent 1 12,000 Safety boat maintenance ½ 5,800 Boatyard maintenance ½ 5,600 Health and safety training ½ 2,400 Operating expenses ½ 16,940 Depreciation (16,000 + 1,000 + 2,500) 1½ 19,500 100,060 Surplus of income over expenditure 2 4,190 10 Marks Page 14
Lakeside Dinghy Club Balance Sheet Answer Task D Lakeside Dinghy Club Balance Sheet as at 31 May 2012 Fixed Assets Club dinghies and safety equipment (net book value) 1 41,200 Clubhouse fixtures and fittings (net book value) 1 3,500 Club safety boat (net book value) 1 10,000 Current Assets Clubhouse rent (prepaid) 1 1,200 Cash at bank 1 5,330 Less Current Liabilities Members subscriptions (received in advance) 1 5,240 Clubhouse heat and light (accrued) 1 400 6,530 5,640 54,700 1 890 ½ 55,590 Represented by: Members opening accumulated fund 1 51,400 Surplus in year 1 4,190 Members closing accumulated fund ½ 55,590 11 Marks Total Marks This Unit = 40 Marks Total Marks This Paper = 140 Marks Page 15