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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
MODEL ANSWERS
Suite 30, 40 Churchill Square, Kings Hill, West Malling, Kent, ME19 4YU
Tel: 0844 330 3527, Fax: 0844 330 3514, Email: [email protected]
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