Professional Documents
Culture Documents
ACCACAT Paper T3 Maintaining Financial Records Topicwise Past Papers
ACCACAT Paper T3 Maintaining Financial Records Topicwise Past Papers
Past papers
June ‘04
Maintaining Financial Records [INT] To
December ‘08
CAT
T3
Bank
Reconciliation
Statement
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
(i) Cheque number 958602 was incorrectly recorded in Wilson’s cash book as $760. The cheque was
correctly debited on the bank statement on 2 May as $670.
(iii) A customer’s cheque for $320 was returned by Wilson’s bank in May as the customer had insufficient
Topic-Wise | Past exam Papers
funds in his account. Wilson has not recorded the return of the cheque in his records.
(iv)The bank has incorrectly credited Wilson’s account with interest of $220. This is interest on a deposit
account held by Wilson personally. The bank had not corrected the error by 31 May.
(v) A lodgement of $850 entered in Wilson’s cash book on 31 May was credited on the bank statement on
3 June.
(vi) Five cheques have not yet been presented at the bank. These are:
Cheque No. $
956784 625 see note (vii)
956892 326
958452 469
958541 122
958668 1 187
–––––
1,629
–––––
(vii) Cheque number 956784 was lost in the post and was cancelled. Wilson has not recorded the
cancellation of the cheque.
Required:
(a) Show Wilson’s general ledger bank account including the necessary correcting entries.
(NB You MUST present your answer in a format which clearly indicates whether each entry is a debit or a credit)
(6 marks)
(b) Prepare a reconciliation of the bank statement balance to the corrected general ledger balance. (7 marks)
(c) Indicate how the bank balance will be reported in Wilson’s final accounts. (2 marks)
[Sec: B, Q: 2 T3 June 2005]
2
Sarah prepares a bank reconciliation statement for her business bank account at the end of each month.
At 31 May 2007 her ledger balance was $2,759 (credit) and her bank statement showed that she had
funds of $131 at the bank. She has the following information:
(i) The bank debited Sarah’s account with charges of $129 during May. Sarah has not recorded the
charges.
(ii) Sarah arranged for $2,500 to be transferred from her personal bank account into the business
bank account. The bank made the transfer on 30 May, but Sarah has not made any entry for it in
her records.
(iii) On 22 May Sarah withdrew $100 cash which she did not record.
(iv) Cheque number 543987 which Sarah issued to a supplier appears on the bank statement as $650.
Sarah incorrectly recorded the cheque as $560.
(v) On 31 May, Sarah lodged $457. This amount appears on the bank statement dated 3 June.
(vi) Sarah was advised by the bank that she earned $52 interest for the period in May that her account
was in credit. Sarah recorded this in May, but the bank did not credit her account until June.
CAT-T3
(vii)
Bank Reconciliation Statements
Three of the cheques issued in May, with a total value of $942, were not debited on the bank
3
statement until after 31 May.
(viii) A cheque for $276, issued to a supplier was cancelled, but Sarah has not recorded the
cancellation of the cheque.
Required:
(a) Show the bank account in Sarah’s general ledger, including any adjusting entries required due to the
information in (i) to (viii) above.
Note: You MUST present your answer in a format which clearly indicates whether each entry is a debit or a credit.
(7 marks)
(b) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in
Sarah’s general ledger. (5 marks)
Topic-Wise | Past exam Papers
(c) Indicate how the bank balance will be reported in Sarah’s final accounts, and the value to be reported.
(3 marks)
[Sec: B, Q: 4 T3 June 2007]
3
You have been asked to complete the bank reconciliation at 30 November 2008 for Jeremy Stiles. The
debit balance on the bank account in his general ledger is $2,717. The bank statement for his business
bank account shows that he has $44 at the bank.
You have noted the following:
(i) Due to an addition error, Jeremy overstated the total of cash banked by $900.
(ii) Jeremy recorded the value of a cheque paid to a supplier as $540. The cheque was debited on
the bank statement at the correct value of $450.
(iii) Jeremy did not record interest earned of $120, or bank charges of $265. Both of these items are
shown on the bank statement for November.
(iv) During November, a lodgement of $4,000 to Jeremy’s personal account was credited to his
business account by the bank.
(v) A customer’s cheque for $464 was returned as the customer did not have sufficient funds for
payment. Jeremy has not made any entries in his books for the return of the cheque.
(vi) A lodgement for $7,785 was not credited by the bank until 1 December. Jeremy recorded this
lodgement in November.
(vii) Cheques issued, with a total value of $2,531, have not been debited by the bank. This includes a
cheque for $427 which was cancelled. Jeremy has not made any entries in his books to record
the cancellation of the cheque.
Required:
(i) Show the bank account in Jeremy’s general ledger, including any adjusting entries which are required
by the information in (i) to (vii) above;
Note: you MUST present your answer in a format which clearly indicates whether each entry is a debit entry or a
credit entry. (7 marks)
(ii) Prepare a reconciliation of the balance on the bank statement to the corrected balance on the bank
account in Jeremy’s general ledger. (5 marks)
(b) Jeremy took out a bank loan on 31 October 2008 for $20,000. This is due for repayment in 16 equal
instalments at three-monthly intervals. The first repayment is due on 31 January 2009.
Required:
State how the balance on Jeremy’s bank account and the bank loan should be reported on his statement of
financial position (balance sheet) at 30 November 2008. (3 marks)
[Sec: B, Q: 2 T3 December 2008]
CAT
T3
Control
Accounts
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Control Accounts 2
1
The balance on the payables ledger control account in Tina’s nominal ledger is $48,395. The total of the
listing of the balances in the personal ledger is $46,644.
Required:
(a) Show the payables ledger control account, including any necessary correcting entries. (5marks)
NB You must use a format which clearly shows whether each entry is a debit or a credit entry
(b) Show the reconciliation of the listing of the balances on the personal accounts to the corrected payables
ledger control account balance. (5 marks)
(c) State the payables balance to be reported on Tina’s balance sheet, indicating how the balance will be
reported. (2 marks)
(d) Indicate three reasons why a payables ledger reconciliation is carried out. (3 marks)
[Sec: C, Q: 2 T3 Pilot Paper]
2
At 30 November 2004, the balance on the receivables control account in Elizabeth’s general ledger was
$39,982.
The total of the list of balances on the customers’ personal accounts was $39,614. Elizabeth has
discovered the following errors:
a) An invoice for $288 was entered correctly in the general ledger, but no entry was made in the
personal account.
b) A payment of $1,300 was accepted in full settlement of a balance of $1,309. No entry was made to
record the discount.
c) A credit note issued to a credit customer for $120 was incorrectly treated as an invoice.
d) an addition error on a personal account meant that the balance was understated by $27.
e) A customer had lodged a payment of $325 directly to Elizabeth’s bank account. The balance on the
personal account was adjusted, but no entry was made in the general ledger.
f) An invoice for $644 was posted as $466 in the general ledger.
g) A credit balance of $47 on a customer’s account was treated as a debit balance.
Required:
(a) Show the receivables control account, including the necessary correcting entries and the corrected
balance. (6 marks)
(b) Prepare a reconciliation of the list of balances to the corrected balance on the receivables control
account. (7 marks)
(c) State the correct receivables balance for inclusion in the final accounts and indicate where it should be
reported on the balance sheet. (2 marks)
[Sec: B, Q: 4 T3 December 2004]
CAT-T3
Control Accounts 3
3
You are carrying out a reconciliation between the balance on the trade receivables control account (which
is $64,969) and the total of the list of the balances on the customers’ personal accounts (which is
$65,132).
You have found the following reasons for the difference:
(i) A sales invoice for $320 was entered in the sales day book as $230;
(ii) The total of the sales returns daybook was understated by $900;
(iii) A credit note for $460 was treated as an invoice when the entries were being made in the personal
ledger;
Topic-Wise | Past exam Papers
(iv) A customer paid $1,700 in full settlement of a balance of $1,715. The discount was correctly recorded
in the personal ledger, but was not entered in the control account;
(v) The total value of cheques received from customers was $67,908 but $67,980 was posted to the
control account;
(vii) A credit balance of $53 on a customer’s account was treated as a debit balance.
Required:
(a) Show the trade receivables control account, including any necessary correcting entries and the corrected
closing balance. (5 marks)
(b) Prepare a reconciliation of the total of the list of balances on the customers’ personal accounts to the
corrected balance on the trade receivables control account. (5 marks)
(c) State the amount to be reported in the final accounts for trade receivables, and indicate how this balance
will be reported. (2 marks)
(d) State three reasons why a reconciliation between the balance on the control account and the total of the
list of balances is carried out. (3 marks)
[Sec: B, Q: 2 T3 June 2006]
4
You are assisting in the preparation of the year end accounts of Rogers and Co. The balance on the trade
payables control account in the general ledger is $45,505. The total value of the list of balances on the
suppliers’ personal accounts is $46,886.
You have noted the following:
(i) An invoice from a supplier for $739 has been entirely omitted from the accounting records;
(ii) A credit note received from a supplier for $266 was entered in the daybook as an invoice;
(iii) No entries have been made in respect of an agreement to offset a credit balance of $864 in the
payables ledger against a debit balance in the receivables ledger;
(iv) Payments to a supplier totalling $1,800 have been recorded in the general ledger, but no entries have
been made in the supplier’s personal account;
(v) A payment of $17,500 was made to settle a balance of $17,585. The balance on the supplier’s
personal account was fully written off, but only the payment of $17,500 was entered in the general ledger;
CAT-T3
(vi) A payment of $340 to a supplier was recorded in the cheques issued daybook as $430;
Control Accounts 4
(vii) A credit balance of $167 on a supplier’s account was listed as a debit balance.
Required:
(a) Prepare the payables control account including the necessary adjusting entries and the corrected
balance. (6 marks)
(NB You must present your answer in a format which clearly indicates whether each entry is a debit entry or a credit
entry.)
(b) Prepare the reconciliation of the list of balances to the corrected balance on the payables control
account. (7 marks)
Topic-Wise | Past exam Papers
(c) State the correct payables balance for inclusion in the final accounts and where it should be reported.
(2 marks)
[Sec: B, Q: 2 T3 December 2006]
5
Toni Pedlow is carrying out a reconciliation between the balance on the trade payables control account in
her general ledger, which is $128,593 and the total of the list of balances on the suppliers’ personal
accounts, which is $128,929.
She has discovered that:
(i) an invoice from a supplier for $263 has been entirely omitted from her accounting records;
(ii) an invoice from a supplier for $67 was entered in her daybook as a credit note;
(iii) a payment of $430 to a supplier has not been recorded in the supplier’s personal account;
(iv) no entries have been made in respect of an agreement to offset a credit balance of $570 in the
payables ledger against a debit balance in the receivables ledger;
(v) a supplier’s account with a credit balance of $71 was omitted from the list of balances;
(vi) a balance of $24,823 was settled by a payment of $24,800. The settlement of the balance was
correctly recorded on the supplier’s personal account, but the discount was not entered in the
general ledger;
(vii) a cheque for $460 paid to a supplier was recorded in Toni’s cash book as $640.
Required:
(a) Prepare the payables control account in Toni’s general ledger, including the necessary adjusting entries
and the corrected balance.
Note: you must present your answer in a format which clearly indicates whether each entry is a debit entry or a credit
entry. (6 marks)
(b) Prepare the reconciliation of the list of balances to the corrected balance on the payables control account
in Toni’s general ledger. (7 marks)
(c) State how the payables balance should be reported in Toni’s final accounts. (2 marks)
[Sec: B, Q: 3 T3 December 2007]
CAT
T3
Provision for
Depreciation
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Jim’s policy is to provide for a full year’s depreciation in the year of acquisition, but no provision is made
in the year of disposal. Depreciation is provided at the following rates:
Land nil
Buildings written off over 25 years, on the straight line basis
Topic-Wise | Past exam Papers
During the year to 30 September 2003, Jim added an extension to the buildings at a cost of $6,800. He
also acquired a new machine, by paying the dealer $9,000 by cheque and trading in an old machine for
$5,500.
The machine traded in had been acquired in January 2000 at a cost of $11,000.
Jim has asked why depreciation is not charged on the land, but is charged on other fixed assets.
Required:
(b) Calculate the profit or loss on the machine which was traded in. (3 marks)
(c) Draft brief notes which explain why depreciation should be charged on the non-current assets other than
freehold land. (4 marks)
[Sec: C, Q: 1 T3 Pilot Paper]
2
Simon depreciates his machinery at a rate of 20% per annum on a reducing balance basis. He provides a
full year’s depreciation in the year an asset is acquired, and no provision is made in the year of disposal.
At 1 November 2003, the cost of Simon’s machinery was $140,900, and the net book value was $94,570.
During the year to 31 October 2004, a machine which had cost $35,000 and had been depreciated for
four years was traded in for a new machine. The new machine cost $50,000, and the trade in value was
$14,000. At 31 October 2004 the balance of the cost of the new machine was still outstanding.
Required:
(a) Calculate the profit or loss on the machine traded in. (3 marks)
(b) Calculate the depreciation charge for machinery for the year to 31 October 2004. (2 marks)
(c) Show the following ledger accounts for the year:
(i) Machinery at cost; (4 marks)
(ii) Accumulated depreciation. (3 marks)
(d) Calculate the total charge to be reported in the income statement for the year to 31 October 2004 in
respect of machinery. (1 mark)
(e) State the balances to be reported in the balance sheet as at 31 October 2004 as a result of these
transactions. (2 marks)
[Sec: B, Q: 3 T3 December 2004]
CAT-T3
During the year to 31 May 2006, Carol scrapped a van and part exchanged an old car for a new car.
The car had been bought in September 2003 at a cost of $14,400. The part exchange value of the old car
was $8,400, and the total cost of the new car was $17,610.
Topic-Wise | Past exam Papers
Carol provides a full year’s depreciation in the year of purchase of an asset, and no depreciation is
charged in the year of disposal. She depreciates motor vehicles at a rate of 25% per annum on a
reducing balance basis.
Required:
(a) Calculate:
(i) The profit or loss on disposal of each of the vehicles; (5 marks)
(ii) The depreciation charge for the year to 31 May 2006 for motor vehicles; (3 marks)
(iii) The total amount to be reported in the income statement for the year to 31 May 2006 in respect of
motor vehicles. (2 marks)
(b) Prepare the following ledger accounts for the year to 31 May 2006:
(i) Motor vehicles at cost; (2 marks)
(ii) Disposal of assets. (3 marks)
[Sec: B, Q: 4 T3 June 2006]
4
You are employed in the accounting department of a transport company. One of your tasks is to maintain
the accounting records relating to non-current assets.
During the year to 30 November 2007, a new lorry was purchased. The invoice includes the following
information:
Date of invoice – 1 January 2007
$
Volvo model S557 24,000
Customisation with company logo 1,000
Insurance for year to 31 December 2007 5,000
Fuel supplied 400
–––––––
Total cost 30,400
–––––––
The information you are required to record in the non-current asset register includes:
(i) Internal reference number
(ii) Manufacturer’s serial number
(iii) Depreciation charge for year
(iv) Cost
(v) Supplier
(vi) Description
At 30 November 2006, the total cost of the company’s lorries was $242,000, and the accumulated
depreciation was $166,736. During the year to 30 November 2007 a lorry which cost $22,000 and which
had a net book value of $11,264 was sold.
CAT-T3
(d) For any THREE of the items (i)–(vi), state one reason for recording each item in the non-current asset
register. (3 marks)
[Sec: B, Q: 2 T3 December 2007]
CAT
T3
Provision for
Doubtful Debts
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
At the end of the previous year the allowance for doubtful debts was $4,516.
The trade receivables balances, including the irrecoverable balance of $3,574, have been analysed as
follows:
Topic-Wise | Past exam Papers
Required:
(i) Briefly explain the difference between a bad debt and a doubtful debt. (2 marks)
(ii) Calculate the total charge to the income statement for the year in respect of bad and doubtful
debts and the value to be reported in the balance sheet for trade receivables. (6 marks)
[Sec: C, Q: 8(a) T3 June 2004]
CAT
T3
Trial Balance
&
Rectification of Errors
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Required:
(a) Indicate whether or not Howard’s calculation of net profit was affected by each of the errors, and calculate
his corrected net profit for the year. (8 marks)
(b) Show Howard’s suspense account including the correction of the errors.
(NB You MUST present your answer in a format which clearly indicates a brief narrative for each entry, and whether
each entry is a debit or a credit) (5 marks)
(c) Indicate which of the errors are an example of:
Error of transposition;
Error of omission;
Arithmetical error;
Error of principle. (2 marks)
[Sec: C, Q: 7 T3 June 2004]
2
Jeffrey’s trial balance at 30 September 2004 is shown below.
Dr Cr
$ $
Capital at 1 October 2003 30,217
Inventory at 1 October 2003 12,560
Receivables 12,880
Payables and accruals 6,561
Bank 4,754
Sales 90,560
Returns inward 375
Purchases 72,674
Carriage inwards 974
Wages 4,684
Rent 3,200
Stationery 382
Travel 749
Telephone 853
General expenses 753
Drawings 12,500
———— ————
127,338 127,338
———— ————
The value of Jeffrey’s inventory at 30 September 2004 was $11,875.
Jeffrey has discovered the following errors in the postings:
(i) An invoice for carriage inwards was posted to the returns inwards account. The invoice was for $264.
(ii) A credit sale invoice for $560 was posted as $650.
(iii) The telephone bill for the three months to 30 September 2004 which was received after the year end
has not been included. The bill is for $297.
CAT-T3
Required:
Trial Balance | Rectification of Errors 3
(a) Indicate which of the balances in the Trial Balance will be changed by the correction of the errors, and
calculate the corrected balances. (6 marks)
(b) Based on the corrected Trial Balance, calculate:
(i) The Gross Profit and the Net Profit for the year to 30 September 2004; (7 marks)
(ii) The capital balance at 30 September 2004. (2 marks)
[Sec: B, Q: 2 T3 December 2004]
3
When carrying out the reconciliation between the balance on the trade receivables control account in her
general ledger ($28,024 debit) and the list of balances from the receivables ledger ($28,245), Pat
McCartney has noted:
(i) An invoice for $875 issued to a customer was recorded in the daybook as a credit note;
Topic-Wise | Past exam Papers
(ii) The balance on a customer’s account was included in the list of balances as $856, but the correct
balance is $586;
(iii) Although Pat had agreed to offset a balance of $450 due from a customer against a balance due
to a supplier, no entries were made;
(iv) A payment of $1,500 was accepted in full settlement of a balance of $1,507. The discount was
correctly recorded in the general ledger, but no entry was made in the customer’s account;
(v) A customer returned goods valued at $422, but no credit note was issued;
(vi) A debit balance of $28 on a customer’s account was included on the list of balances as a credit
balance.
Required:
(a) For each of the items (i)–(vi) above, identify whether an adjustment is required in the general ledger
account, to the list of balances, or both. (6 marks)
(b) Calculate the corrected balance on the general ledger account. (3 marks)
(c) Prepare the reconciliation of the list of balances to the corrected balance on the general ledger account.
(6 marks)
[Sec: B, Q: 2 T3 June 2008]
CAT
T3
Incomplete
Records
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Incomplete Records 2
1
Cathy Quinn did not keep complete records for the year to 31 October 2008. From her bank statements,
your previous year’s file and your discussion with Cathy you have obtained the following information:
(i) Between 1 November 2007 and 31 October 2008, $158,125 was lodged to her bank account, and
cheques totalling $135,186 were debited.
(ii) Her lodgements included $10,000 transferred from her personal bank account. All other
lodgements were payments received from customers.
(iii) The cheques debited in her bank statement included the following:
Paid to suppliers $101,028
Drawings $16,500
Topic-Wise | Past exam Papers
(vi) In November 2008, cheques to suppliers with a total value of $3,897, which Cathy had written in
October 2008, were debited in her bank statement.
(vii) At 31 October 2007, she owed $11,624 to her suppliers, and was owed $17,684 by her
customers.
(viii) At 31 October 2008, she owed $10,789 to her suppliers. She does not know how much she was
owed by her customers, but she earned a 30% margin on all her sales.
Required:
For the year to 31 October 2008, calculate Cathy’s:
(a) Receipts from customers; (2 marks)
(b) Business expenses; (4 marks)
(c) Purchases; (3 marks)
(d) Sales; (2 marks)
(e) Net profit; and (2 marks)
(f) Trade receivables balance at 31 October 2008. (2 marks)
[Sec: B, Q: 4 T3 December 2008]
CAT
T3
Partnership
Accounts
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Partnership 2
1
John and Darryl are in partnership sharing profits and losses in the ratio 60:40 respectively.
Under the terms of the partnership agreement, the partners are entitled to interest on their capital account
balances at a rate of 5% per annum. The agreement also provides for a salary of $13,000 to be paid to
John and a salary of $5,000 to be paid to Darryl.
At 1 November 2002 the balances on the partners’ capital and current accounts were:
Capital account Current account
$ $
John 60,000 43,250
Darryl 50,000 26,560
Topic-Wise | Past exam Papers
The draft accounts for the year to 31 October 2003 report a net profit of $37,458. Inventory was valued at
cost $45,864. This includes damaged items which cost $5,748. The partners intend to repair these at a
cost of $1,475. They will then be sold for $6,700.
Required:
(a) Calculate the revised net profit for the year to 31 October 2003, after making any necessary adjustments
to the valuation of inventory. (4 marks)
(b) Calculate each partner’s total share of the profit. (6 marks)
(c) Show John’s current account, including the closing balance, at 31 October 2003.
NB You must use a format which clearly shows whether each entry is a debit or a credit entry. (5 marks)
[Sec: C, Q: 3 T3 Pilot Paper]
2
A trainee in your office prepared draft accounts for the year ended 30 April 2004 for Orla Hughes and
Paula Jones who are in partnership. The draft accounts report a gross profit of $157,846 and a net profit
of $51,024. Cash payments of $15,000 to each partner have been included in expenses.
At 1 May 2003 the balances on the partners’ capital and current accounts were:
Orla Paula
Capital account $125,000 (credit) $70,000 (credit)
Current account $34,568 (credit) $23,741 (debit)
The partnership agreement also states that the partners’ capital account balances will remain fixed, and
that the balances on the partners’ current accounts should not be included in the calculation of interest on
capital.
Required:
Calculate:
(a) The correct gross profit and net profit to be reported in the partnership income statement for the year to
30 April 2004; (2 marks)
(b) The amount of profit which will be credited to each partner’s current account for the year to 30 April 2004;
(8 marks)
(c) The balance on each partner’s current account at 30 April 2004; (4 marks)
(d) The total net assets of the partnership at 30 April 2004. (1 mark)
[Sec: C, Q: 6 T3 June 2004]
CAT-T3
Partnership 3
3
Ann and Jane have been trading as a partnership for several years, sharing profits and losses in the ratio
3:5. Their income statement for the year to 31 October 2005 reports a profit of $126,842 before taking
into account the following items:
(i) Ann is paid a salary of $22,000 per annum. Jane’s salary is $8,000 per annum;
(ii) On 1 February 2005, each of the partners paid $35,000 into the partnership bank account. Ann’s
payment is to be treated as capital, while Jane’s is to be treated as a loan, with interest at 4% per annum
to be credited to her current account;
(iii) Partners are charged interest on drawings at a rate of 16% per annum. All drawings are assumed to
Topic-Wise | Past exam Papers
have been made half way through the year. During the year, Ann’s drawings were $28,000 and Jane’s
were $24,000.
Required:
(a)
(i) Calculate the amount of profit available for appropriation for the year to 31 October 2005; (2
marks)
(ii) Calculate the total amount of profit due to each of the partners for the year to 31 October
2005. (7 marks)
(b) Show the partners’ current accounts, including the closing balances for the year ended 31
October 2005. (6 marks)
[Sec: B, Q: 3 T3 December 2005]
4
Eleanor and Steve are in partnership, sharing profits and losses in the ratio 2:3.
At 1 May 2006, the partners’ capital and current account balances were:
Eleanor Steve
Capital $47,500 (credit) $34,800 (credit)
Current $1,680 (debit) $6,750 (credit)
During the year to 30 April 2007:
Eleanor’s drawings were $22,800;
Steve’s drawings were $25,600; and the net profit for the year was $52,956.
Required:
(a) Calculate the profit attributable to each partner for the year to 30 April 2007. (9 marks)
(b) Prepare the partners’ current accounts for the year to 30 April 2007. (6 marks)
[Sec: B, Q: 3 T3 June 2007]
CAT-T3
Partnership 4
5
You are preparing final accounts for Roy and Greg who are in partnership.
Under the terms of the partnership agreement:
(i) Greg receives a salary of $12,000 per annum;
(ii) Partners are paid interest on the opening balance on their capital account at 8% per annum;
(iiI) Interest on drawings is to be charged as follows:
Roy $4,480
Greg $2,744; and
(iv) Profits and losses are shared 4:3 between Roy and Greg.
The partnership income statement for the year to 30 April 2008 shows a net profit of $67,891.
The opening balances on the partners’ capital and current accounts, and their drawings during the year
Topic-Wise | Past exam Papers
were:
Capital accounts Current accounts Drawings
at 1 May 2007 at 1 May 2007 during year to 30 April 2008
Roy $55,000 Cr $28,563 Cr $32,000
Greg $51,000 Cr $17,506 Dr $19,600
Required:
(a) Calculate each partner’s share of the profit of $67,891. (8 marks)
(b) Prepare the partners’ current accounts for the year to 30 April 2008. (4 marks)
(c) Calculate the net assets of the partnership at 30 April 2008. (3 marks)
[Sec: B, Q: 3 T3 June 2008]
CAT
T3
Master
Questions
http://kaka-pakistani.blogspot.com
[Type the company name]
[Pick the date]
http://kaka-pakistani.blogspot.com
CAT-T3
Master Questions 2
1
A trainee in your office has prepared draft accounts for a client for the year to 31 March 2005, but has not
dealt with the adjustments for accrued expenses, prepaid expenses, bad and doubtful debts and
depreciation.
Following the preparation of the income statement, the trainee prepared the balance sheet shown below.
You have been asked to complete the final accounts.
————
Current assets
Inventory 42,339
Trade receivables 149,411
Bank account 6,280 198,030
———— ————
287,630
————
The trainee has given you the following information about the remaining adjustments:
(i) The last invoice received for electricity covered the three month period to 31 January 2005. The invoice
was for $6,870.
(ii) Rent of $28,500 for the six months to 30 June 2005 was paid in January.
(iii) The trade receivables figure of $149,411 is stated after deducting the existing allowance for doubtful
debts of $7,900 from the total trade receivables balance of $157,311.
(iv)The total trade receivables balance of $157,311 includes a balance of $660 which has been
outstanding for eight months. The client has decided to write off this balance.
(v) The client’s policy is to allow for doubtful debts on the basis of the length of time the debt has been
outstanding.
The aged analysis of trade receivables at 31 March 2005 and the required allowance is shown below:
Age of debt Balance Allowance required
$
0 – 30 days 125,275 nil
31 – 60 days 1 27,200 20% of balances
over 60 days 11 4,836 75% of balances
–––––––
157,311
–––––––
(vi) Depreciation is to be provided at a rate of 20% per annum on the reducing balance basis.
CAT-T3
Required:
Master Questions 3
(a) Calculate the correct balance at 31 March 2005 for each of the following:
(i) Accrued expenses; (2 marks)
(ii) Prepaid expenses; (2 marks)
(iii) Allowance for doubtful debts; and (3 marks)
(iv) Accumulated depreciation. (2 marks)
(b) Prepare the corrected balance sheet as at 31 March 2005. (6 marks)
[Sec: B, Q: 3 T3 June 2005]
2
One of your clients, Steve Fletcher who does not keep full accounting records has asked you to calculate
his profit for the year to 30 April 2005 and his bank balance at that date. Your file on last year’s accounts
shows that his assets and liabilities at 30 April 2004 included the following:
Topic-Wise | Past exam Papers
$
Inventory 15,800
Receivables 23,750
Payables 16,800
Cash at bank 1 17,500
Capital 42,900
In the year to 30 April 2005, Steve received $204,800 from his customers. Before banking the cash he
used $2,900 to pay business expenses and took cash drawings of $17,900. He also banked $3,000 from
the sale of some personal assets.
He wrote cheques totalling $191,650. Of this amount, $3,100 was drawings and $22,800 was for
business expenses. The rest of the cheques were paid to suppliers.
At 30 April 2005 his inventory was valued at $16,200. At that date he was owed $25,400 by his customers
and he owed $17,900 to his suppliers. You estimate that your fee for this work will be $150.
You have already calculated that the depreciation charge on Steve’s non-current assets for the year to 30
April 2005 is $2,450.
Required:
(a) Calculate Steve’s bank balance at 30 April 2005. (3 marks)
(c) Based on the gross profit you have calculated in (b) above, calculate Steve’s net profit for the year to 30
April 2005. (3 marks)
[Sec: B, Q: 4 T3 June 2005]
CAT-T3
Master Questions 4
3
You work for a wholesale firm which distributes a single product. A trainee has prepared draft accounts
for the month of October 2005. The accounts report a net loss of $35,580 and total net assets of
$283,468. You have noted that:
1 the income statement does not report a figure for gross profit;
2 the trainee has not included any value for closing inventory;
3 the trainee has included $57,600 for opening inventory. This was calculated on the first in, first out
(FIFO) basis. There were 480 items, valued at $120 per item.
Topic-Wise | Past exam Papers
Master Questions 5
4
Gareth Carson has been in business as a sole trader since 1 May 2005. He has prepared the draft
income statement shown below and has asked you to check if it is correct.
1 Closing inventory cost $6,378. This includes damaged items which cost $1,564. These could be
repaired for $375 and then sold for $1,820.
2 The figure for rent is the total paid in the year to 30 April 2006. Five equal payments were made for the
three month periods commencing on:
1 May 2005;
1 August 2005;
1 November 2005;
1 February 2006; and
1 May 2006.
3 Carriage and delivery comprises $1,428 for carriage on goods received and $418 for delivering goods
to customers.
4 The charge for wages is made up of $28,000 paid to Gareth and $3,580 paid to a part-time employee.
Required:
Prepare Gareth’s corrected Income Statement for the year to 30 April 2006, clearly showing both gross profit
and net profit.
[Sec: B, Q: 3 T3 June 2006]
CAT-T3
Master Questions 6
5
Jim McAvoy owns a small business. He has provided you with the following information about the
business for the year to 30 November 2006:
(i) During the year $76,846 was paid into the business bank account. This included a gift of $6,000
received from a relative, with the balance being receipts from customers.
(ii) Before banking the cash Jim paid business expenses of $5,700 in cash and took cash drawings of
$7,800.
(iv) As well as payments to suppliers, payments out of the bank account included business expenses of
$3,400 and drawings of $2,000.
(v) Jim does not receive any credit from his suppliers.
Required:
For the year to 30 November 2006, calculate Jim’s:
(i) Total payments made from the bank account; (2 marks)
(ii) Payments received from customers; (2 marks)
(iii) Sales; (2 marks)
(iv) Purchases; (2 marks)
(v) Gross profit; (2 marks)
(vi) Net profit. (2 marks)
(b) Following your calculations in (a), Jim tells you that he normally adds a mark up of 20% to calculate
his selling price, but on some occasions he reduced his selling price in order to make a sale. He would
like to know how much this has cost him.
Required:
Calculate the reduction in Jim’s sales for the year to 30 November 2006 as a result of the occasional
reduction in his selling price. (3 marks)
[Sec: B, Q: 4 T3 December 2006]
CAT-T3
Master Questions 7
6
Ron Green would like to know how his business has performed for the year to 31 May 2007. His trial
balance at that date, as well as the other information he has given you, is shown below:
Debit Credit
$ $
Sales 729,542
Purchases 486,463
Electricity 9,200
Rent 42,000
Wages 120,800
Vehicle expenses 11,858
General expenses 5,843
Topic-Wise | Past exam Papers
(i) The last electricity invoice received was for $2,760. This was for the three months to 31 March 2007.
(ii) Ron has paid his rent up to 31 July 2007. His annual rent is $36,000.
(iii) Ron depreciates his non-current assets on the following bases:
Machinery 20% per annum, straight line
Vehicles 25% per annum, reducing balance
(iv) Ron’s inventory at 31 May 2007 cost $38,670. This includes some damaged items, which had cost
$6,850. Ron has arranged for these to be repaired at a cost of $1,285. He will then be able to sell the
items for $4,200.
Required:
Calculate the amounts to be included in Ron’s final accounts for the year to 31 May 2007 for:
(a) Accruals; (1 mark)
(b) Prepayments; (1 mark)
(c) Depreciation; (2 marks)
(d) Closing inventory; (2 marks)
(e) Cost of sales; (3 marks)
(f) Gross profit; and (2 marks)
(g) Net profit. (4 marks)
[Sec: B, Q: 2 T3 June 2007]
CAT-T3
Master Questions 8
7
Tanya Joyce has extracted the following trial balance at 30 November 2007:
Debit Credit
$ $
Sales 205,117
Purchases 108,539
Wages 33,552
Electricity 9,526
Rent 7,200
General expenses 4,788
Non-current assets at cost 125,980
Accumulated depreciation at 1 December 2006 74,812
Topic-Wise | Past exam Papers
Master Questions 9
8
A junior member of staff has prepared accounts for a client for the month of November 2008. The
accounts report a profit of $38,544 and closing capital of $117,529, based on a closing inventory
valuation of $89,600. The closing inventory valuation was calculated using the periodic weighted average
method. However, the first in, first out (FIFO) method should have been used.
18 November 1,200
21 November 500 132·00
26 November 600
Required:
Calculate the corrected value of:
(i) Closing inventory; (4 marks)
(ii) Profit for the month; and (1 mark)
(iii) Closing capital. (1 mark)
[Sec: B, Q: 3(b) T3 December 2008]