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FoundationCertificateSynoptic Answers to practice assessment 1

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Task 1(a)

Monday, week 4 to-do list (in order of completion)Task 1 Variance analysis09.00 -10.00Task 2 Meeting10.00 -11.00Task 3 Process sales invoices and credit notes11.00 -12.00Task 4 Lunch12.00 -13.00Task 5 Process sales invoices and credit notes13.00 -14.00Task 6 Process purchase invoices and credit notes14.00 -15.00Task 7 Process purchase invoices and credit notes15.00 -16.00

(b) Week 3

(c) What will the balance carried down be for both the cash and bank? (2 marks)

Balances Amount £Cash 2,950 Bank 4,531

Workings: Cash £2,410 + £624 – £84 = £2,950Bank £6,451 – £840 – £1,080 = £4,531

(d) Both balances are Debits

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Task 2(a) Task Job role

(b) (a), (e) and (f)

(c) Task AccountantPrepare budgets Management AccountantPrepare financial accounts Financial AccountantCost a new product Management Accountant

(d) (a) Confidentiality

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Advertise for new member of theteam in purchase ledger

Enter the receipts into the cashbook

Enter the hours worked fromclocking in cards to timesheets

Prepare contracts of employment

Chase customers who have notpaid their invoices

Credit Control Assistant

Cashier

Human Resources Manager

Payroll Assistant

Task 3 (a)

Situation Payment methodMaking a payment by post to pay for an advert you placed in the local newspaper Paying the rent monthly. The amount does not vary Paying a mobile telephone bill. The amount varies each month Paying staff wages direct into employees bank accounts

DEBIT CREDITReceipt from HMRC Receipt for bank interest Debit card payment for vehicle insurance BACS transfer for payment of wages

(b)Account name Amount £ Debit Credit Discount received 2,250 4VAT 450 4Purchase ledger control 2,700 4

(c)

Account name Amount £ Debit Credit

Wholesale Supplies 132 4

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Cheque

Standing orderDirect debitFaster payment

4

4

4

4

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Task 4(a)

Bank reconciliation statement £Balance as per bank statement 9,777Add TW Harris 360 Total to add 360Less Smithson 744 Total to subtract 744Balance as per cash book 9,393

(b) £9,393

(c)Account name Amount £ Debit Credit Sales 3,695 4 Rent received 3,695 4

(d) Correct version (with errors in bold)

Hi Mr Hemming,Your current monthly rent is £3,695 to rent the factory at Highfields Industrial Estate. I amwriting to give you 3 months’ notice that from 1st December 20-X the rent will increase to£4,000 per month. If you have any queries please do not hesitate to contact me.Kind regards

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Task 5 (a) (b) and (d)

(b)Direct materials used 133,803

Cost of goods sold 229,372

Manufacturing cost 216,803

Cost of goods manufactured 222,844

Direct cost 193,803

Workings:

Opening inventory of raw materials 68,740

Purchase of raw materials +108,740

Closing inventory of raw materials –43,677

DIRECT MATERIALS =133,803

Direct labour +60,000

DIRECT COST =193,803

Manufacturing overheads +23,000

MANUFACTURING COST =216,803

Opening inventory of work-in-progress +36,740

Closing inventory of work-in-progress –30,699

COST OF GOODS MANUFACTURED =222,844

Opening inventory of finished goods +47,230

Closing inventory of finished goods –40,702

COST OF GOODS SOLD =229,372

Task 6(a)

Transactions Amount £ Debit CreditVAT from the discounts received day book 320 4VAT from irrecoverable debt 94 4 VAT from the discounts allowed day book 570 4 VAT payment to HM Revenue and Customs 4,570 4 VAT from the purchases day book 2,960 4 VAT from the sales returns day book 160 4 VAT from the sales day book 5,790 4VAT on cash sales 3,360 4

(b) £5,686

Workings: Opening balance of £4,570 + £320 + £5,790 + £3,360 – £94 – £570 – £4,570 – £2,960 – £160 =£5,686

(c) £5,518Workings: £840 x 0.20 = VAT of £168.£5,686 – £168 = £5,518

(d) Owing to HMRC

(e)This report will cover an explanation of VAT.Output tax is tax charged on goods sold to customers and purchase returns from creditsuppliers. Input tax is tax on goods purchased for example stationery and on any goods returned fromcredit customers. The balance brought down on a VAT control account will show whether we owe HMRC orwhether HMRC owe us. A debit balance represents an asset and means that HMRC owe us. Acredit balance represents a liability and means that we owe HMRC.

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Task 7 (a)

Account name Amount £ Debit Credit

Wages expense 11,922 4 Wages control 11,922 4

(b)Account name Amount £ Debit Credit

Wages control 3,858 4

HM Revenue & Customs 3,858 4

(c)

Account name Amount £ Debit Credit

Wages control 340 4

Trade union fund 340 4

(d)

Account name Amount £ Debit Credit

Wages control 7,724 4

Bank 7,724 4

(e)Account name Debit £ Credit £Sales ledger control 33,018

(f)Account name Debit £ Credit £Sales ledger control 33,108

(g)Account name Debit £ Credit £Suspense 90