MAN1061 FINANCIAL ACCOUNTING 1
Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit
BSC HONURS in Accounting & Finance
MAN1061; 15 credits
FINANCIAL ACCOUNTING 1
Level FHEQ4 Examination
(Closed Book)
Time allowed: 2 hours
Semester 1;
Section A: Answer question 1 |
Question 1
X
The following trial balance is for Kay Kidson, a sole trader, at 30 November 2016:
|
DR £ |
CR £ |
Purchases and sales |
198,345 |
245,356 |
Land & Buildings |
250,000 |
- |
Equipment at cost |
45,500 |
- |
Equipment, provision for depreciation |
- |
12,145 |
Motor vehicles at cost |
32,560 |
- |
Motor vehicles provision for depreciation |
- |
13,426 |
Bank |
12,450 |
- |
Sundry expenses |
367 |
- |
Utilities |
3,500 |
- |
Rent and rates |
12,467 |
- |
Carriage out |
1,345 |
- |
Trade receivables/payables |
45,045 |
45,689 |
Inventory |
23,456 |
- |
Wages and salaries |
75,000 |
- |
Returns |
5,478 |
3,475 |
Allowance for irrecoverable receivables |
- |
1,800 |
Interest paid and received |
654 |
450 |
Discounts |
2,500 |
4,560 |
Capital |
- |
300,000 |
Long term loan |
- |
95,000 |
Carriage in |
1,650 |
- |
Drawings |
11,584 - |
- - |
721,901 |
721,901 |
Additional information as at 30 November 2016:
1. Equipment is to be depreciated at 20% per annum on their original cost.
2. Motor vehicles are to be depreciated at 25% per annum using the reducing balance method.
3. Purchases include goods costing £5,000 that were withdrawn by Kay for her own use during the year.
4. Closing inventory has been counted and valued at £32,500
5. £6,250 wages for November 2016 has not been accrued.
6. Rent and rates expenses include £2,500 paid in advance for December 2016. 7. Bad debts of £6,750 have yet to be written off.
8. The allowance for irrecoverable debts is to be 7.5% of trade receivables.
Required:
(a) Prepare the Income Statement for the year ended 30 November 2016 and the
Statement of Financial Position as at 30 November 2016. (Round to the nearest whole number) (40 marks)
Income Statement for the year ended 30 November 2016
£ £ £
;
Statement of Financial Position as at 30 November 2016
£ £ £
Workings:
(b) What is an Audit and why do accounts need to be Audited? Briefly describe the
five main stages of an audit.
(TOTAL: 50 marks)
Please turn over for Section B
Section B: Answer only TWO questions |
Question 2
(a) An extract from the Statement of Financial Position of Washington Ltd as at 31st December 2015 showed the following:
Motor vehicles
Cost
255,000
Depn
95,500
WDV
159,500
Vehicles are depreciated using the reducing balance method at a rate of 25%
The company's depreciation policy states that depreciation is to be charged pro rata to time in the year of acquisition but no charge should be made in the year of disposal.
During the year ended 31st December 2016 the following motor vehicle transactions took place:
Acquisitions: |
|
30-Apr-16 |
Purchased a lorry for £25,000 |
31-May-16 |
Purchased a motor car for £18,000 |
31-Oct-16 |
Purchased a new van for £17,000 |
Disposals: |
|
30-Apr-16 |
Motor Car sold for £3,000 - it cost £14,000 on 1st Feb 2013 |
30-Jun-16 |
Tractor sold for £2,500 - it cost 12,000 on 30th June 2014 |
31-Oct-16 |
Lorry sold for £23,000 - it cost £25,000 on 30th November 2014 |
Required:
Complete the following cost, accumulated depreciation and disposal accounts for 2016 showing your workings (show all your calculations to the nearest whole number): (20 marks)
Question 1 (30 marks) Question 2 (20 marks)
(a)
(b)
( c)
Exam 2012
I/S andSFP
Acquisition and Disposal of vehicles (RB 31.56%) (16)
Explain the purpose of depn (4)
Resit 2012
I/S andSFP
Acquisition and Disposal of vehicles (SL over 4 years) (16)
Why straight line depn not always most appropriate. Discuss (4)
Exam 2013
I/S andSFP
Depn expense and acquisition numerous assets (20%RB) (6)
Disposals of vehicles (RB 21.5 (10)
Why straight line depn not alwa most appropriate. Discuss (4)
Question 1 (30 marks) Question 2 (20 marks)
(a)
(b)
( c)
Exam 2012
I/S andSFP
Acquisition and Disposal of vehicles (RB 31.56%) (16)
Explain the purpose of depn (4)
Resit 2012
I/S andSFP
Acquisition and Disposal of vehicles (SL over 4 years) (16)
Why straight line depn not always most appropriate. Discuss (4)
Exam 2013
I/S andSFP
Depn expense and acquisition numerous assets (20%RB) (6)
Disposals of vehicles (RB 21.5 (10)
Why straight line depn not alwa most appropriate. Discuss (4)
Question 1 (30 marks) Question 2 (20 marks)
(a)
(b)
( c)
Exam 2012
I/S andSFP
Acquisition and Disposal of vehicles (RB 31.56%) (16)
Explain the purpose of depn (4)
Resit 2012
I/S andSFP
Acquisition and Disposal of vehicles (SL over 4 years) (16)
Why straight line depn not always most appropriate. Discuss (4)
Exam 2013
I/S andSFP
Depn expense and acquisition numerous assets (20%RB) (6)
Disposals of vehicles (RB 21.5 (10)
Why straight line depn not alwa most appropriate. Discuss (4)
Question 3
Workings:
Workings continued:
Workings continued:
(c) Explain the purpose of depreciation. (5 marks)
(TOTAL: 25 marks)
Question 3
(a) R. Miller had a balance on her trade receivables at 31st March 2015 of £175,500,
which included an allowance for irrecoverable debts made up as follows:
General allowance
Specific allowance
- J.Butler
- C.Blount
£
7,500 800 1,630
9,930
During the year ended 31st March 2016 the following occurred:
1. J. Butler was declared bankrupt and a first and final dividend of 20p to the pound was declared.
2. C. Blount went into liquidation and a first dividend of £750 was received.
3. At the year end R. Miller decided to provide for a £500 debt owing by S. Perkins. 4. At the end of the year R. Miller decided to write off a debt of £200 to B. Murrey At the end of the year R. Miller decided to provide for a general allowance of
irrecoverable debts of 5% of trade receivables, which at the 31st March 2016 amounted to £220,200, in addition to any necessary specific allowances.
Any debts to be written off will need to be accounted for.
Required:
Complete the following accounts for the current year (to 31st March 2016) showing your workings. (12marks)
DR Allowance for irrecoverable debts CR
Date
Description
£
Date
12
Description
£
DR
Irrecoverable debts
CR
Date
Description
£
Workings:
(b) You have been asked to prepare the Sales control account for Pretty Ltd for the year ended 31 December 2016.
You obtain the following information for the year:
|
£ |
Sales ledger control account opening balance 1 January 2016 |
35,050 |
Purchase ledger control account opening balance 1 January 2016 |
65,050 |
Sales |
315,000 |
Cash and cheques paid to credit suppliers |
24,500 |
Discounts allowed |
540 |
Cash and cheques received from credit customers |
274,050 |
Discounts received |
2,900 |
Returns outwards |
560 |
Purchases |
325,050 |
Carriage inwards |
2,340 |
Returns inwards |
14,600 |
In addition the following information has been received:
(i) A cheque received from a customer for £670 has been dishonored by the bank.
(ii) Cash of £1,245 was received in respect of a debit balance on a credit suppliers’ ledger account.
(iii) A balance of £500 in the sales ledger control account is to be offset against the same person's balance in the purchase ledger control account.
(iv) A signed "bill of exchange receivable" for £8,650 was received from a customer.
(v) Irrecoverable debts amounting to £1,850 are to be written off and the allowance for irrecoverable debts is calculated to be £3,450.
Required:
Complete the SLCA below for the year ended 31 December 2016 including the closing balances. (10 marks)
Question 1 (30 marks) Question 2 (20 marks)
(a)
(b)
( c)
Exam 2012
I/S and SFP
Acquisition and Disposal of vehicles (RB 31.56%) (16)
Explain the purpose of depn (4)
Resit 2012
I/S and SFP
Acquisition and Disposal of ve (SL over 4 years) (16)
Why straight line depn not alw most appropriate. Discuss (4)
Question 3
(b) What is the purpose of control accounts? (3 marks)
(TOTAL 25 marks)
Question 4
(a) An extract from the ledgers of E. Swann as at 30 April 2016 show the following account balances:
T. Dalma
D. Jones
W. Turner
J. Norington
H. Barbossa
J. Gibbs
During May the
following occurred:
5th May
8th May
11th May
13th May
16th May
17th May
19th May
21st May
26th May
30th May
£ DR
1,350 700 575 |
£ CR 950 775
|
2023-08-17