Pearson LCCI

Wednesday 8 September 2021

Time: 3 hours Paper Reference ASE20104

Certificate in Accounting (VRQ)

Level 3

Resource Booklet
Do not return this Booklet with the question paper.

Instructions
• AllPlease
workings and answers must be given in the question paper.
• not benote that any workings and answers written in the Resource Booklet will
marked.

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Resource for Question 1 – Parts (a) and (b).
Clinton provided the following information in addition to the extended trial balance
extract at 31 May 2021 on page 3 of the question paper.
• Closing inventory was valued at cost, $32 600. This included damaged inventory
valued at cost, $1 910, which can only be sold for $2 200 after repairs costing $395
• Cheques received from credit customers, $11 600, had not been recorded in the
books of account.
• An irrecoverable debt, $2 260, was to be written off.
• The allowance for doubtful debts was to be maintained at 5% of trade receivables.
• Bank loan interest for the three months to 31 May 2021 was owing.
• Goods costing, $670, taken by Clinton for his own use, had been credited to both the
drawings account and the purchases account.

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Resource for Question 2 – Parts (c), (d) and (e).
Ah, Bon and Chi were in partnership sharing profits and losses in the ratio 2:2:1.

At 30 June 2021

Capital Account Current Account

Partner
$ $

Ah 80 000 11 000

Bon 80 000 6 500

Chi 80 000 2 100 Dr

On 1 July 2021 Chi retired from the partnership. Goodwill was valued at $80 000
Ah and Bon decided to continue in partnership sharing profits and losses equally.
Assets were revalued as indicated.

Increase Decrease
$ $

Inventory 3 200

Land and buildings 110 000

Motor vehicle 29 500

Plant and equipment 21 900

The amount due to Chi was to be settled on 1 December 2021 either by admitting a new
partner or obtaining a bank loan.

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Resource for Question 3.
On 1 April 2020 E plc purchased 75% of the share capital of F Ltd for $165 000
The directors provided the following information at 31 March 2021.

E plc F Ltd
$ $

9% debenture (2030) 45 000 –

Bank 15 310 2 400

Cash 2 000 1 500

Inventory 41 900 13 530

Property, plant and equipment – carrying value 435 000 195 100

Retained earnings 199 400 105 500

Share capital (ordinary shares of $1 each) 430 000 80 000

Tax payable 21 200 15 700

Trade and other payables 28 250 46 130

Trade and other receivables 64 640 34 800

• At 1 April 2020 the fair value of the property of F Ltd was $25 000 more than the
carrying value. This revaluation had not been recorded in the books of F Ltd.
• Profit for the year ending 31 March 2021 for F Ltd was $29 500

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There is no resource for Question 4.

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Resource for Question 5 – Part (b).
Yeo provided the following budgeted information.

2021

September October November December

Sales (units) 2 750 2 900 2 420 2 300

• All sales and purchases will be on a credit basis.

• The selling price will be $45 per unit.
• The purchase price will be $20 per unit.
• Purchases will be made one month before sale.
• Suppliers will be paid in the month following purchase after a 5% cash discount.
• General expenses will be $18 200 per month.
• Wages will be $81 000 per year.
• Depreciation charge will be $31 680 per year.

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