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: 0844 330 3527, Fax: 0844 330 3514, Email: mail@iab.org.uk
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 122,450 31 May Cash book - receipts ½ 118,260 31 May Sales day book ½ 120,060 31 May 31 May Cash book discounts ½ Sales returns day book ½ 1,250 2,780 31 May Journal bad debt ½ 1,080 31 May Balance c/d 1 119,140 242,510 242,510 31 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 156,820 31 May Cash book payments ½ 148,930 31 May Purchase day book ½ 143,880 31 May Cash book - discounts ½ 1,020 31 May Balance c/d 1 147,030 300,700 300,700 31 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 2011 118,330 (DR) Difference 1 810 2 Marks 1
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 2011 147,030 (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
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
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 31/5/11 - - - 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
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 2011 1/4 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 2011 1/4 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
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
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 1 280 31/5/11 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 1 197,000 199,200 199,200 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 1 840 4,120 4,120 DR Operating Expenses CR Date Details Date Details 31/5/11 Balance b/f 12,480 31/5/11 Prepayments 2 900 31/5/11 Accruals 2 1,840 31/5/11 Profit and loss 1 13,420 14,320 14,320 Page 7
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 1 151,040 309,620 309,620 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 1 900 9,700 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 1 840 31/5/11 Operating expenses 1 1,840 2,680 2,680 31/5/11 Balance b/d ½ 2,680 27 Marks Page 8
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 2011 2 151,040 4 Marks Page 9
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 1 280 Profit and Loss 1 280 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 1 840 Accruals 1 840 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 1 900 1 1,840 1 900 1 1,840 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
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 2011 1 13,420 1 13,420 24 Marks Total Marks Question 3 = 55 Marks Total Marks This Unit = 100 Marks Page 11
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
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 1 250 Balance c/d 1 300 Income & expenditure 2 830 1,080 1,080 Balance b/d ½ 300 15 Marks Page 13
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 1 830 Clubhouse maintenance 1 500 Operating expenses 1 3,250 Depreciation (500 + 2,500) 1 3,000 15,180 Surplus of income over expenditure 3 1,120 9 Marks Page 14
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) 1 300 7,220 1,900 Represented by: Members opening accumulated fund 1 35,200 Surplus in year 1 1,120 1 5,000 1 26,000 31,000 1 5,320 2 36,320 Members closing accumulated fund 2 36,320 13 Marks Total Marks This Unit = 40 Marks Total Marks This Paper = 140 Marks Page 15