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1PAPER BASED REVISION PROGRAMME

Marking Guide - Revision Paper – 37
Advanced Level - 2021
Accounting English Medium
Aravinda Jayamaha
BBA (Colombo)
BSc Accounting and Finance/ACCA Finalist (UK)
Former Accounting Teacher of Royal College – Colombo 07

(01) (a)
Bank Reconciliation Statement
Balance as per cash control 01.01.21 8,000
(+) Un presented cheque (Dec. – (1842) 2,000 2,000
10,000
(-) Unrealized deposit (Dec.) 8349 1,000 (1,000)
Balance as per bank statement Jan, 2020 9,000

Adjusted Cash Control

B.c.f. 31,600 Bank charges 900
Direct deposit 2,000
Error (deposited cheque) 14,400 B.c.d. 47,100
48,000 48,000
B.c.f. 47,100

Bank Reconciliation Statement

Balance as per adjusted cash control account 47,100
(+) Unpresented cheque (1846) 1,600 1,600
48,700
(-) Unrealized deposit (1849) (13,000) (13,000)
Balance as per bank statement Jan. 2021 35,700

(a) Unrecorded transaction

Bank charges 900
Direct deposit 2,000

(b) Timing differences

(a) Unpresented cheque (1846) 1,600
(b) Unrealized deposit (1849) 13,000

(c) Deposited cheque (1848) Rs. 16,000 was recorded as Rs. 1,600 in receipt cash journal

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(01) (b) (i) Trade debtor reconciliation statement
Debtors ledger balance ................................... 42,000
(+) Sales ......................................................... 8,000
Sales return ............................................... 2,000 10,000
52,000
(-) Cash ........................................................... 6,000
Credit balance................................................... 3,000 9,000
Debtors control before correction) ................... 43,000

(ii) Revised trade debtors control account

B.c.f. 43,000 Sale 8,000
Sales return 2,000
Discount allowed 500
B.c.f. 32,500
43,000 43,000
B.c.f. 32,500

(iii) Revised trade debtors list

Debtors ledger balance ........................................ 42,000
(+) Credit balance ............................................... (3,000) (3,000)
39,000
(-) Cash ................................................................ 6,000
Discount allowed .................................................. 500 (6,500)
Revised debtors list .............................................. 32,500

(iv) General Journal

Date Description Dr Cr
(1) Sales (P/L) 8,000
Trade debtors control 8,000
(Overcasted sales Rs.8,000)
(2) Sales return 2,000
Debtors control 2,000
(Sales return undercasted 2,000)
(3) Discount received 500
Discount allowed 500
Trade debtors control 500
Trade creditors control 500
(Discount allowed was recorded as discount
received correction)

(v) Sale (8,000)

Sales return (2,000) If above errors were not correcting profit increased
Discount allowed (500) by Rs. 11,000
Discount received (500)
Revised profit 11,000

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 (i) General Journal
Date Description Dr Cr
(1) Cash 700
Share issue 700
(Recording cash received for share issue)
(2) Share issue 700
Stated capital 500
Cash 200
(Issue of 50000 shares at Rs. 10 each)

(ii) Changers in Equity Statement (Rs.000)

Stated Revaluation General Retain
Total
capital reserve reserve profit
B.c.f x x x x x
Share issue 500 500
Capitalization of reserve 500 (500)
dividends (80) (80)
General reserve 100 (100) -
Total comprehensive income 100 500 600

(iii) Reserves will convert in to stated capital

(03) (a) Daham Sports Club

Income & Expenditure account for the year ended 31.03.2021
Income
Life subscription ..............................................................  40
Subscription (60 « 5000) .................................................  300
Donation used .................................................................  200
Building fund used ..........................................................  360 900

Expenses
Discount allowed .............................................................  20
Depreciation ....................................................................  20
Operational expense ........................................................ 195 (235)
Surplus ............................................................................ 665

Discount 40 « 5000 « 0.1 = 20

(ii) Equity as at 01/04/2020 - 280

Surplus 665
Life fund 320
Sport fund 50
Building fund 240
1,555

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(03) (b) Kavindu Ama Partnership
Trading, Profit & Loss for the year ended 31.03.2021 (Rs.000)
Sale ..................................................................................... 5,000
(-) Cost of sale (2200 + 50 -60) ......................................... (2,190)
Gross profit ........................................................................ 2,810

Expenses
License fee ........................................................................ 20
Operational expense (900-600) ........................................ 300
Loan interest ..................................................................... 75 395
2,415
Appropriations
Salary - Kavindu .............................................................. 600
Ama .................................................................... 600 (1,200)

Capital interest - Kavindu ................................................ 200

Amal ..................................................... 100 (300)

Profit share – Kavindu ....................................................... 549

Amal ........................................................... 366 (915)

Partners Capital Account (Rs.000)

Kavindu Amal Ama Kavindu Amal Ama
Goodwill 150 90 60 B.c.f. 2,000 1,000 -
Cash 1,200
B.c.d. 2,030 1,030 1,140 Goodwill 180 120
2,180 1,120 1,200 2,180 1,120 1,200
B.c.f. 2,030 1,030 1,140

Partners Current Account (Rs.000)

Kavindu Amal Kavindu Amal
Drawing 140 20 B.c.f. 300 250
Operational expense 300 300 License fee  20
Salary 600  600
Capital interest 200  100
B.c.d. 1,209 1016 Profit share 549  366
1,649 1,336 1,649 1,336
B.c.f. 1,209 1016

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(04) (i) Property, Plant, Equipment (Rs.000)
Motor
Land Building Total
vehicle
Opening 01.04.2020 ................................ 2,000 5,000 3,000 10,000
Revaluation ............................................. 800 1,000 1,800
Disposal .................................................. (3,000) (3,000)
Adj. Accumulated depreciation .............. (2,000) (2,000)
2,800 4,000 6,800
Opening .................................................. - 2,000 1,000 3,000
Depreciation ........................................... 400 450 850
Disposal .................................................. (1,450) (1,450)
Adj. Accumulated depreciation (2,000) (2,000)
400 - 400
Carrying value ........................................ 2,800 3,600 - 6,400

(04) (b) (ii) P & L Extraction

Distribution Administration Other
Depreciation
Building ............................. 400
Motor vehicle .................... 450
Disposal loss ..................... 250

(iii) General Journal

Dr Cr
Disposal account 3,000
Motor vehicle 3,000
(Recording cost of the disposed asset)
Provision for depreciation 1,450
Disposal account 1,450
(Recording accumulated depreciation until
disposal date)
Sales 1,300
Disposal account 1,300
(Recording sales proceed)
P&L 250
Disposal account 250
(Recording disposal loss)
Depreciation expense 450
Provision for depreciation 450
(Recording depreciation for the year)

(i) Changers in Equity Statement (Rs.000)

Stated Revaluation General Retain
Total
capital reserve reserve profit
B.c.f. 2,000 800 200 100 3,100
(1) Share issue 1,000 1,000
(2) Capitalization of reserve 200 (200) -
(3) Total comprehensive income (150) 750 600
(4) Transfer general reserve 200 (200) -
3,200 450 400 650 4,700

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 (ii) General Journal (Rs.000)
Dr Cr
(i) Cash 1,300
Share issue 1,300
(Recording application money received)
(ii) Share issue 300
Cash 300
(Rejection of excess application ........)
(iii) Share issue 1,000
Stated capital 1,000
(Recording issue of shares)

(iii) Capitalization of reserve

Reserves will decreased
Stated capital will increase
Finally no impact on equity

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