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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

1

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 31 May

Journal – bad debt ½ Balance c/d 1

1,080 119,140

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 31 May

Cash book – payments ½ Cash book - discounts ½

148,930 1,020

31 May Purchase day book ½ 143,880

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

2

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 147,030 (CR) Total Creditors per subsidiary Purchase Ledger as at 31 ½

May 2011 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)

3 Marks Total Marks Question 1 = 15 Marks

Page 2

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

3

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

6½ Marks Page 3

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

The Payroll Bureau Fixed Asset Register (Extract)

Answer - Tasks A, B and C

8 Marks

Pa

ge

4

Item Description Date of Acquisition

Capitalised Cost

£

Annual Depreciation

£

Accumulated Depreciation

£

Net Book Value

£

Disposal Proceeds

£

Disposal Date

Vehicles

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

The Payroll Bureau Journal – Answer - Tasks D, E, G and I

Journal

2011 Details DR £

CR £

Journal Task D 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

13½ Marks Page 5

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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 31/5/11

Profit and loss 1 Balance c/d 1

280 1,970

31/5/11 Balance b/f 2,250

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

Prepayments Operating Expenses Operating Expenses Accruals

1 900 1 1,840

1 840

1 900

1 1,840 Adjustments to account for rates prepaid,

power heat and light accrued and operating expenses prepaid and accrued at the year end

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

Profit and Loss Operating Expenses

1 13,420

1 4,120

1 13,420 Transfer of expenses to profit and loss

Account at the year end 31 May 2011

24 Marks Total Marks Question 3 = 55 Marks Total Marks This Unit = 100 Marks

Page 11

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

Fitness First Accounts – Answer Task B

DR Members Subscriptions (Income) CR

Details Income & expenditure 2

Balance c/d 1

£ 16,300 1,600

Details Balance b/f 1 Receipts ½

£ 1,500 16,400

17,900 17,900

Balance b/d ½ 1,600

DR Clubhouse Rent CR

Details Balance b/f 1 Payments ½

£ 1,200 7,800

Details Income & expenditure 2 Balance c/d 1

£ 7,600 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

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

Operating expenses 1 500

1 3,250

Depreciation (£500 + £2,500) 1 3,000

15,180

Surplus of income over expenditure 3

1,120

9 Marks

Page 14

IAB L3 Cert (QCF)/June 2011 Exam MA (P1)

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

1 5,000 1 26,000

Current Assets Clubhouse rent (prepaid)

1 1,400

31,000

Cash and bank 1 5,820

7,220 Less Current Liabilities Members subscriptions (received in advance)

1 1,600

Clubhouse heat and light (accrued) 1 300 1,900

1 5,320

2 36,320

Represented by: Members opening accumulated fund 1 35,200 Surplus in year 1 1,120

Members closing accumulated fund 2 36,320

13 Marks

Total Marks This Unit = 40 Marks Total Marks This Paper = 140 Marks Page 15