LCCI International Qualifications

Book-keeping Level 1

Model Answers
Series 4 2011 (1017)

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hired out or otherwise disposed of by way of trade in any form of binding or cover. electronic. 1017/4/11/MA Page 1 of 12 . photocopying. The contents of this booklet are divided into 3 elements: (1) (2) Questions Model Answers – reproduced from the printed examination paper – summary of the main points that the Chief Examiner expected to see in the answers to each question in the examination paper. stored in a retrieval system or transmitted in any form or by any means. mechanical. teachers and candidates as they prepare for LCCI International Qualifications. additional guidance relating to individual questions or to examination technique (3) Helpful Hints Teachers and candidates should find this booklet an invaluable teaching tool and an aid to success. other than that in which it is published. without the prior consent of the Publisher. The book may not be lent. no part of this publication may be reproduced. resold. EDI accepts that candidates may offer other answers that could be equally valid. EDI provides Model Answers to help candidates gain a general understanding of the standard required.Book. plus a fully worked example or sample answer (where applicable) – where appropriate. © Education Development International plc 2011 All rights reserved. recording or otherwise without prior written permission of the Publisher. The general standard of model answers is one that would achieve a Distinction grade.Keeping Level 1 Series 4 2011 How to use this booklet Model Answers have been developed by EDI to offer additional information and guidance to Centres.

852 26.QUESTION 1 The following Trial Balance was extracted from Lucy’s books at 28 February 2011: Dr £ Capital at 1 March 2010 Equipment Vehicles Stock at 1 March 2010 Provisions for depreciation: equipment vehicles Sales Purchases Returns General expenses Vehicle expenses Wages Drawings Discounts Bank Cash Debtors and Creditors 9.592 5.880 233 4.647 129. £ 5.20% per annum on cost vehicles – 20% per annum reducing balance A bad debt of £286 to be written off.600 94.000 11.782 129.647 4.450 4.600 746 250 16.780 650 520 175 (6) REQUIRED Prepare the: (a) (b) Trading and Profit & Loss Account for the year ended 28 February 2011 Balance Sheet at 28 February 2011.607 Additional information at 28 February 2011: (1) (2) (3) (4) (5) Stock Included in General expenses is the cost of decorating Lucy’s house Wages accrued Vehicle expenses prepaid Depreciation is calculated as follows: equipment .849 217 18.607 628 Cr £ 14.200 4.000 5. (12 marks) (13 marks) (Total 25 marks) 1017/4/11/MA Page 2 of 12 .214 3.827 32.

780 31.312 4.214+520) Depreciation: equipment (9.MODEL ANSWER TO QUESTION 1 Syllabus Topic 19: Profit and Loss Accounts Syllabus Topic 20: Balance Sheet (a) Lucy – Trading and Profit & Loss Account for the year ended 28 February 2011 £ £ Sales 94.600+650) Capital 28 February 2011 Net Book Value £ 3.000 1+1Of 5.000 5.952 1Of 1 1 1 1 1 1 1 53.701 Current liabilities Bank 4.400x20%) Discount allowed Bad debts 17.000 6.780 Debtors 16.062 1Of 1 (13 marks) (Total 25 marks) 1017/4/11/MA Page 3 of 12 .942 20.827 Sales returns ( 217) 94.432 1Of (12 marks) Net profit (b) Lucy – Balance Sheet at 28 February 2011 Aggregate Cost Depreciation £ £ Fixed assets Equipment 9.280 746 286 62.592 overdraft Creditors 5.120 1+1Of 8.062 14.610 1 Less : Cost of Sales Opening stock 5.880 9.852-175) Wages (26.250 20.000 Vehicles 11.647 Accrual 520 10.719 233 62.880 20.677 26.997 4.496 Prepayment 175 Cash 250 22.120 1 1 1 1 1 1 1 11.000x20%) vehicles (6.880 Current assets Stock 5.849 Purchase returns (628) 37.891 Gross profit Add: Discount received Less: General expenses (18.000 11.734 1.647-650) Vehicle expenses (4.450 1 Purchases 32.759 Net current assets Net assets Capital 1 March 2010 Add Net profit Less Drawings (3.432 24.671 Closing stock 5.520 1 9.800 1.

and show the effect of correcting each of the above items (1) to (6) on both the gross profit and the net profit.400 and net profit of £7. £150. Item (1) has been adjusted as an example. as below. £2. cost £520. £13. taken by Ken for his personal use Ken introduced capital during the year. (1) to (6) above.QUESTION 2 Ken’s Trading and Profit & Loss Account for the year ended 31 December 2010 showed a gross profit of £32. £45.820 (11 marks) (Total 25 marks) 1017/4/11/MA Page 4 of 12 . had been debited to the Purchases Account No record had been made of stock. had been debited to her personal account and credited to the Discount Allowed Account. Narratives are not required.820. Gross Profit Profit as per accounts Effect on profit (1) (2) (3) (4) (5) (6) Net effect Revised profit £ 32. (2) (3) (4) (5) (6) REQUIRED (a) Prepare the Journal entries to correct each of the items.830 Discount allowed to Ethel. this has been credited to Sales Account The stock sheets at 31 December 2010 totalled £8. Subsequently the following errors were found in the books: (1) Petrol purchased on credit from Jim’s Garage. had not been recorded in the books Stationery.530. the stock figure included in the final accounts was £5.400 Plus £ Minus £ Plus £ Minus £ 150 Net Profit £ 7.000. (14 marks) (b) Prepare a table.

MODEL ANSWER TO QUESTION 2 Syllabus Topic 17: Errors in the Accounts (a) Ken – Journal Dr £ 150 Cr £ 150 45 45 520 520 2.265 2.700 26 26 1 1 1 1 1 1 1 1 1 1 1+1Of 1+1Of (14 marks) (1) Vehicle Expenses Jim’s Garage Stationery Purchases Drawings Purchases Sales Capital Stock Trading Discount Allowed (2 x £13) Ethel (2 x £13) (2) (3) (4) (5) (6) (b) Ken – Correction of Gross and Net Profit for the year ended 31 December 2010 Gross Profit Profit as per accounts Effect on profit (1) (2) (3) (4) (5) (6) Net effect Revised profits £ 32.700 26 3.044 8.000 2.000 1.400 Plus £ 45 520 2.864 2Of (11 marks) 2.700 2.176 1.265 33.700 Minus £ Plus £ 520 2.000 2.820 1 1 2 2 2 1 (Total 25 marks) 1017/4/11/MA Page 5 of 12 .000 Minus £ 150 Net Profit £ 7.000 2.220 2.665 3.

55 1 5 7 12 17 23 28 Balance brought down Restored imprest to £100 Stationery Petrol Postage Coffee Milk and tea Rail fares Stationery Restored imprest to £150 Rail fares Milk Postage Cash sales Milk and sugar Petrol Stationery April 1 8 13 15 20 21 25 REQUIRED (a) Prepare the Petty Cash Book for March and April and carry the balance forward at the end of each month.42 32.23 8. (2 marks) (2 marks) (Total 25 marks) (21 marks) 1017/4/11/MA Page 6 of 12 .46 38.15 7. The imprest was restored to £100.29 ? 45.68 12.QUESTION 3 Jayne keeps her Petty Cash Book on the imprest system. The last voucher used in February was number 342.00 25. The following transactions took place during March and April: 2011 March £ 8.34 ? 6.00 5.00 6.00 on 1 March 2011.55 15.64 13.20 2. Remove and use the sheet(s) on page (6) to present your answer (b) Prepare for March and April 2011 the: (i) (ii) General Expenses Account Postage and Stationery Account. Jayne uses three analysis columns: Travelling expenses General expenses Postage and Stationery expenses.46 25.

23 1.MODEL ANSWER TO QUESTION 3 Syllabus Topic 10: Petty Cash Book and Imprest System (a) Jayne .55 Sundries Total for the month £ 1 Of 1 Of (2 marks) (Total 25 marks) 1017/4/11/MA Page 7 of 12 .64 54.34 Mar 91.66 100.00 38.77 148.00 54.00 1.23 8.00 6.55 120.46 38.29 57.01 £ 1 Of 1 Of (2 marks) (b)(ii) 2011 Mar 31 Apr 30 *Accept: Postage and Stationery Account £ Petty Cash Book 25.20 2.29 25.00 5.71 Petty Cash Book 28.77 100.83 7.66 100. 1 Balance b/d Bank Stationery Petrol Postage Coffee Milk and tea Rail fare Stationery Balance c/d 343 344 345 346 347 348 349 Total £ 5 7 12 17 23 28 91.00 6.84 45.64 13.46 25.15 7.00 5.55 15.01 13.40 54.55 28.2 9 14.00 54.55 May 1 Balance b/d Voucher numbers 1+1Of 1 (21 marks) (b)(i) 2011 Mar 31 Apr 30 General Expenses Account £ *Petty Cash Book 14.60 83.46 25.23 150.68 12.00 Apr 1 Balance b/d Bank Rail fares Milk Postage Cash Sales Milk and sugar Petrol Stationery Balance c/d 350 351 352 353 354 355 45.20 2.23 8.Petty Cash Book Travelling expenses £ General expenses £ Postage and Stationery £ 1 1 6.00 6.69 Petty Cash Book 8.42 32.60 175.66 175.15 7.29 98.60 25.60 8.68 12.00 No.42 32.55 15.69 7.46 1Of 1 1 1 1 1 1 1 1 8 13 15 20 21 25 91.71 1 1 1 1 1 1 1 Receipts 2011 £ 8.

(b) Trial Balance at 28 February 2011.QUESTION 4 At 31 January 2011 Ann’s books had the following balances: Capital Cash John (a supplier) Jean (a customer) During February 2011. the following transactions took place: February 2 12 18 27 REQUIRED Prepare the: (a) Ledger accounts in the books of Ann for the month of February 2011. (19 marks) (6 marks) (Total 25 marks) Paid John in cash Received from Jean in cash Purchased goods on credit from John Sold goods on credit to Jean Cash sale £ 120 241 121 288 50 £ 682 500 417 599 1017/4/11/MA Page 8 of 12 . Balance the accounts and carry down the balances Day books are not required.

MODEL ANSWER TO QUESTION 4 Syllabus Topic 2: Recording Transaction through Double Entry Syllabus Topic 3: Balancing Accounts Syllabus Topic 11: Trial Balance 2011 Feb 28 Balance c/d Ann .Capital Account £ 2011 Feb 1 Balance b/d 682 682 Mar 1 Balance b/d £ 682 338 682 682 1 2011 Feb 1 12 27 Balance b/d Jean Sales Mar 1 Balance b/d Cash Account £ 2011 500 Feb 2 241 50 338 28 791 671 £ John 120 1 1 1 1 Balance c/d 671 791 1 Of 2011 Feb 2 28 Cash Balance c/d John Account £ 2011 Feb 1 120 18 418 538 Mar 1 Balance b/d Purchases £ 417 121 3 38 538 418 1 1 1 Balance b/d 1 Of 2011 Feb 1 18 Balance b/d Sales Mar 1 Balance b/d Jean Account £ 2011 599 Feb 12 288 3 8 28 887 646 £ Cash Balance c/d 241 646 887 1 Of 1 1 1 2011 Feb 18 John Mar 1 Balance b/d Purchases Account £ 2011 121 338 Feb 28 Balance c/d 121 121 £ 1 121 121 1 2011 Feb 28 Balance c/d Sales Account £ 2011 Feb 18 27 338 338 Mar 1 Jean Cash Balance b/d £ 288 50 338 338 338 1 1 1 Of (19 marks) 1017/4/11/MA Page 9 of 12 .

438 1 1 1 1 1 1 (6 marks) (Total 25 marks) 1017/4/11/MA Page 10 of 12 .438 Cr £ 682 338 1.(b) Ann – Trial Balance at 28 February 2011 Dr £ Capital Cash John Jean Purchases Sales 671 418 646 121 338 1.

For Question 3 (a) Candidate No: Centre Code: Petty Cash Book Receipts Date Details Voucher number Total Analysis Columns £ £ £ £ £ £ £ Please staple the completed sheet into your answer book 1017/4/11 Page 11 of 12 .

For Question 3 (a) Candidate No: Centre Code: Petty Cash Book Receipts Date Details Voucher number Total Analysis Columns £ £ £ £ £ £ £ Please staple the completed sheet into your answer book 1017/4/11/MA Page 12 of 12 © Education Development International plc 2011 .

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