Exam ID 322

Qualifications:

Level 3 Certificate in Book-keeping 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:

Prepare financial statements for a partnership – Y601/0742 unit 310

Prepare financial statements for a sole trader – A601/0734 unit 311

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IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

Page

1

SECTION A

QUESTION ONE

Alex and Sara Trading in Partnership

Trading and Profit and Loss Account – Answer Task A

Alex and Sara

Trading and Profit and Loss Account for the Year Ended 31 May 2011

£ £ £

Sales 1/4 1,064,180

Less Cost of Goods Sold

Opening stock 1/4 86,320

Add Purchases 1/4 837,160

923,480

Less Closing stock 1/4 89,650

Cost of Sales 1/4 833,830

Gross profit 1 230,350

Less Expenses

Wages and salaries 1/4 117,540

Heat and light (£6,620 + £1,245) 1/2 7,865

Rates (£31,800 - £10,000) 1/2 21,800

Vehicle expenses 1/4 6,820

Advertising 1/4 4,800

Bank charges 1/4 400

Other expenses 1/4 5,200

Depreciation 1/2 17,625

182,050

Net profit 1 48,300

6 Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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2

Alex and Sara Trading in Partnership

Profit and Loss Appropriation Account – Answer Task B

Alex and Sara

Profit and Loss Appropriation Account for the Year Ended 31 May 2011

£ £

Net profit 1/2 48,300

Add Interest on drawings: Alex 1/2 600

Sara 1/2 400

1,000

49,300

Less Interest on capital: Alex 1/2 8,000

Sara 1/2 6,000

14,000

35,300

Less Share of profits: Alex 2 21,180

Sara 2 14,120

35,300

-

6½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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3

Alex and Sara Trading in Partnership

Current Accounts – Answer Task C

DR Current Accounts CR

Date Details Alex £

Sara £

Date Details Alex £

Sara £

31/5/10 Balance b/f ¼ 2,120 31/5/10 Balance b/f ¼ 3,440

31/5/11 Interest on drawings

¼ 600 ¼ 400 31/5/11 Interest on capital

¼ 8,000 ¼ 6,000

31/5/11 Drawings ¼ 24,000 ¼ 18,000 31/5/11 Share of profit ¼ 21,180 ¼ 14,120

31/5/11 Balance c/d ½ 2,460 ½ 5,160

29,180 23,560 29,180 23,560

31/5/11 Balance b/d ¼ 2,460 ¼ 5,160

4 Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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4

Alex and Sara Trading in Partnership

Balance Sheet - Answer Task D

Alex and Sara Balance Sheet as at 31 May 2011

£ £ £

Fixed Assets Cost Less Dep’n to

Date

NBV

Premises 225,000 - ¼ 225,000

Equipment 60,000 ½ 36,000 ¼ 24,000

Vehicles 40,000 ½ 23,125 ¼ 16,875

325,000 59,125 ½ 265,875

Current Assets

Stock ¼ 89,650

Trade debtors ¼ 68,350

Prepaid expenses ¼ 10,000

Bank ¼ 10,320

Cash ¼ 200

178,520

Less Current Liabilities

Trade creditors ¼ 85,530

Accrued expenses ¼ 1,245

86,775

Working capital ½ 91,745

1 357,620

Financed By:

Capital – Alex ¼ 200,000

Add Current account ¼ 2,460

202,460

Capital – Sara ¼ 150,000

Add Current account ¼ 5,160

155,160

1 357,620

7½ Marks

Total This Question = 24 Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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5

QUESTION TWO

Sena, Tariq and Vikram Trading in Partnership

Capital Accounts – Answer Task A

DR Capital Accounts CR

Date Details Sena £

Tariq £

Vikram £

Date Details Sena £

Tariq £

Vikram £

1/6/10 Goodwill adjm’t - - 2 15,000 31/5/10 Balance b/f 1 90,000 1 50,000 -

1/6/10 Balance c/d 1 100,000 1 55,000 1 55,000 1/6/10 Bank - - 1 70,000

1/6/10 Goodwill adjm’t 2 10,000 2 5,000 -

100,000 55,000 70,000 100,000 55,000 70,000

1/6/10 Balance b/d ½ 100,000 ½ 55,000 ½ 55,000

13½ Marks

Workings – Goodwill Adjustment

Partners Goodwill Creation

Goodwill Deletion

Net Adjustment

£ £ £

Sena 35,000 (CR) 25,000 (DR) 10,000 (CR)

Tariq 15,000 (CR) 10,,000 (DR) 5,000 (CR)

Vikram - 15,000 (DR) 15,000 (DR)

50,000 (CR) 50,000 (DR) -

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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6

Sena, Tariq and Vikram Trading in Partnership

Profit and Loss Appropriation Account – Answer Task B

Sena, Tariq and Vikram

Profit and Loss Appropriation Account for the Year Ended 31 May 2011

£ £

Net profit ½ 80,000

Less Interest on capital: Sena 1 3,000

Tariq 1 1,650

Vikram 1 1,650

6,300

73,700

Less Salaries: Sena 1 12,000

Tariq 1 12,000

Vikram 1 8,000

32,000

41,700

Less Share of profit: Sena 2 20,850

Tariq 2 8,340

Vikram 2 12,510

41,700

-

12½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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7

Sena, Tariq and Vikram Trading in Partnership

Current Accounts - Answer Task C

DR Current Accounts CR

Date Details Sena £

Tariq £

Vikram £

Date Details Sena £

Tariq £

Vikram £

31/5/10 Balance b/f - ½ 500 - 31/5/10 Balance b/f ½ 1,500 - -

31/5/11 Drawings ½36,000 ½20,000 ½ 20,000 31/5/11 Interest on capital ½ 3,000 ½ 1,650 ½ 1,650

31/5/11 Balance c/d ½ 1,350 ½ 1,490 ½ 2,160 31/5/11 Salaries ½ 12,000 ½ 12,000 ½ 8,000

31/5/11 Share of profit ½ 20,850 ½ 8,340 ½12,510

37,350 21,990 22,160 37,350 21,990 22,160

31/5/11 Balance b/d ½ 1,350 ½ 1,490 ½ 2,160

10 Marks

Total This Question = 36 Marks

Total This Unit = 60 Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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8

SECTION B

QUESTION ONE

Sico Plastics

Trial Balance – Answer Task A

Sico Plastics Trial Balance as at 31 May 2011

DR £

CR £

Bank 1/4 2,420

Bank loan 1/4 40,000

Capital 1/4 155,000

Carriage inwards 1/4 4,440

Discounts allowed 1/4 2,500

Discounts received 1/4 3,050

Drawings 1/4 36,000

Fixtures (Cost) 1/4 12,000

Fixtures (Provision for depreciation 31 May 2010) 1/4 2,400

Insurances 1/4 1,200

Loan interest paid 1/4 900

Operating expenses 1/4 22,740

Premises (Cost) 1/4 120,000

Purchases 1/4 617,400

Rates 1/4 6,800

Sales 1/4 803,410

Stock (31 May 2010) 1/4 70,240

Trade creditors 1/4 56,440

Trade debtors 1/4 37,780

Value added tax (VAT) 1/4 4,260

Vehicles (Cost) 1/4 40,000

Vehicles (Provision for depreciation 31 May 2010) 1/4 8,000

Vehicle expenses 1/4 4,610

Wages and salaries 1/4 92,950

Suspense 580 1/2

Totals 1/2 1,072,560 1/2 1,072,560

7½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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9

Sico Plastics

Suspense Account – Answer Tasks B and D

DR Suspense Account CR 2011 Details £ 2011 Details £

31 May 31 May

Difference in books 1/2 Discounts received 1/2

580 420

31 May Purchases 1/2 1,000

1,000 1,000

1½ Marks

Journal – Answer Task C

Journal

2011 Details DR

£

CR

£

31 May Suspense 1/4 ½ 420

Discounts Received 1/4 ½ 420

Correction of error, discounts received not transferred from Cash Book 1/4

31 May Purchases 1/4 ½ 1,000

Suspense 1/4 ½ 1,000

Correction of error balance on Purchases Account understated 1/4

3½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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10

Sico Plastics

Extended Trial Balance – Answers Tasks E, F and G

Sico Plastics – EXTENDED TRIAL BALANCE AS AT 31 MAY 2011

Trial Balance Adjustments Profit & Loss Balance Sheet

Ledger Account DR £

CR £

DR £

CR £

DR £

CR £

DR £

CR £

Bank 2,420 ¼ 2,420

Bank loan 40,000 ¼ 40,000

Capital 155,000 ¼ 155,000

Carriage inwards 4,440 ¼ 4,440

Discounts allowed 2,500 ¼ 2,500

Discounts received ½ 3,470 ¼ 3,470

Drawings 36,000 ¼ 36,000

Fixtures (Cost) 12,000 ¼ 12,000

Fixtures (Prov’n for dep’n) 2,400 ¼ 2,400 ½ 4,800

Insurances 1,200 ¼ 1,200

Loan interest paid 900 ¼ 900

Operating expenses 22,740 ¼ 2,500 ½ 25,240

Premises (Cost) 120,000 ¼ 120,000

Purchases ½ 618,400 ¼ 618,400

Rates 6,800 ¼ 2,800 ½ 4,000

Sales 803,410 ¼ 803,410

Stock (31 May 2010) 70,240 ¼ 70,240

Trade creditors 56,440 ¼ 56,440

Trade debtors 37,780 ¼ 37,780

Value added tax (VAT) 4,260 ¼ 4,260

Vehicles (Cost) 40,000 ¼ 40,000

Vehicles (Prov’n for dep’n) 8,000 ¼ 6,400 ½ 14,400

Vehicle expenses 4,610 ¼ 4,610

Wages and salaries 92,950 ¼ 92,950

Totals ½ 1072,980 ½ 1,072,980 - - - - - -

Closing stock – Profit & loss ¼67,440 ¼ 67,440

Closing stock – Balance Sheet ¼67,440 ¼ 67,440

Prepayment adjustment ¼ 2,800 ¼ 2,800

Accruals adjustment ¼ 2,500 ¼ 2,500

Depreciation expense ¼ 8,800 ¼ 8,800

Net profit ½ 41,040 ½ 41,040

Totals ½81,540 ½81,540 ½ 874,320 ½ 874,320 ½ 318,440 ½ 318,440

16½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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11

Sico Plastics

Trading and Profit and Loss Account – Answer Task H

Sico Plastics

Trading and Profit and Loss Account for the Year Ended 31 May 2011

£ £ £

Sales 1/4 803,410

Less Cost of Goods Sold

Opening stock 1/4 70,240

Add Purchases 1/4 618,400

Add Carriage inwards 1/4 4,440

693,080

Less Closing stock 1/4 67,440

Cost of Sales ½ 625,640

Gross Profit ½ 177,770

Add Other Income

Discounts received 1/4 3,470

181,240

Less Expenses

Discounts allowed 1/4 2,500

Insurances 1/4 1,200

Loan interest paid 1/4 900

Operating expenses 1/4 25,240

Rates 1/4 4,000

Vehicle expenses 1/4 4,610

Wages and salaries 1/4 92,950

Depreciation 1/4 8,800

140,200

Net profit 1 41,040

5½ Marks

IAB L3 BK (QCF)/ June 2011 Mod Ans (P2)

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12

Sico Plastics

Balance Sheet – Answer Task H

Sico Plastics Balance Sheet as at 31 May 2011

£ £ £

Fixed Assets Cost Less Dep’n to Date

NBV

Premises 120,000 - 1/4 120,000

Fiuxtures 12,000 1/4 4,800 1/4 7,200

Vehicles 40,000 1/4 14,400 1/4 25,600

172,000 19,200 1/4 152,800

Current Assets

Stock 1/4 67,440

Trade debtors 1/4 37,780

Prepayment 1/4 2,800

Bank 1/4 2,420

110,440

Less Current Liabilities

Trade creditors 1/4 56,440

Accrual 1/4 2,500

Value added tax (VAT) 1/4 4,260

63,200

Working capital 1/4 47,240

½ 200,040

Financed By:

Capital 1/4 155,000

Add Net Profit 1/4 41,040

196,040

Less Drawings 1/4 36,000

160,040

Long-Term Liabilities

Bank loan ¼ 40,000

½ 200,040

5½ Marks

Total This Question= 40 Marks

Total This Unit = 40 Marks