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ACCOUNTING
HIGHER LEVEL
BOOK 2
BOOK 1
185
I. Sole Trader - Final Accounts
The following rnal balance was extracttd from the books of M. O'Brie-n on 31/1212002.
9% Investments [ /6/2002 Ff ,4Buildings (cos1 (980,000) F /iDelivery vans (cost€ 150,000) 5% Fixed Mongage (including increase of €200,000 5% f �
mortgage received on l /4/2002) I Patents (incorporating 3 months investment income) F;lDebtors and Creditors B $Purchases and Sales T Stocks l /l /2002 1 Commission I::� S £([) Provision for Bad Debts cAG SSalaries and General Expenses Admi"Discount (net; op, 'h( ()h'l�Rent Op 1rco1n£_Mortgage lnterest paid for first 3 months�Insurance (incorporating suspense) Adrr,1n ·V.A.TC'.L BSPRSI CL e,£ Bank CL, [,<;. Drawings f'.' � (!;5'Capital F ¼, £, S
The following information and instructions are to be taken into account:
€ 200.000933,00080,500
55,50077,600
668,00067,70024,000
I 94, I 00
4,0008,700
37,500
2,350.600
r
500.000
86,500982,000
3.800
4,60015,000
5,5002,300
70,900
680.000�350,600
(i) Stock at 3 l/12/2002 at cost was €74,500. This figure includes damaged stock which cost €6,600 but whichnow has a net realisable value of €1 ,900.
(ii) Provide for depreciation on vans at the annual rate of 15% of cost from the date of purchase to the date ofsale. NOTE: On 3 I /3/2002 a delivery van which had cost €42,000 on 3 I /5/1999 was traded against a new van which cost €48,000. An allowance of €20,000 was made on the old van. The cheque for the net amount ofthis transaction was entered in the bank account but was incorrectly treated as a purchase of trading stock.These were the only entries made in the books in respect of this transaction.
(iii) Patents, which incorporate 3 months investment income, are to be written off over a 5 year periodcommencing in 2002.
(iv) The suspense figure arises as a result of the posting of an incorrect figure for mortgage interest to the mortgage interest account and discount received €700 entered only in the creditors account. The correctinterest was entered in the bank account.
(v) Provision to be made for mortgage interest due. (vi) A new warehouse was purchased during the year for €240,000 plus VAT 12.5%. The amount paid to the
vendor was entered in the Buildings account. No entry was made in the VAT account. (vii) Provide for depreciation on buildings at the rate of 2% of cost per annum. It was decided to re-value the
buildings at €I, 100,000 o� 3 l /12/2OO2. (viii) Provision for bad debts to be adjusted to 4% of debtors.
You are required to prepare a:
(a) Trading and profit and loss account for the year ended 31 /I 2/2002.(b) Balance sheet as at 31/12/2002.
(75)(45)
(120 marks)
2
s·oLE -rR.AOCR
-2...oos
(1) c Los\·� -stock rl+ S0O
DQ./"'r\� PortlOr'\ (Lt- 7-0 0 J bbOO � \90G
6Cf300
SOLO l.- 2.000 X Ci 5 JC.. 3j12 .;; I 575
RES, lO'iSOO u X � is , b '20 C,
NEW 4-'3000 )<. "15 ;,,;:. q},2 5400
D<2..pre.c. i o-. ti o ri Or""\ Vo.,,'$
�
cost
Cl.Ct. �.
..:: 42000
.:;
1 O �on\-hS
4-2000 J< • \ 5
cl, t .. d.
42000 lr-350
2.l.;-150
LOSS
2..0.000
4- 1 5 G
\ so. 000 - 4-2000 + 48000
�_JQQ.. + 2.317- 5 -- i rSSO
668000 - 28000 �·
I 56000.
64-0 00 0
3
\ ' I )
�v)
5'5500 -,.. ( 2.00 coo x · 0 9 /4
- 55500 + 4-500·-
60 000
- (12ooo)
{4000 ]X.
,
5.
G-.J. «\ ; r--
60 Q00 - I 2 OC (J
'250 0
4
/ [nsoJ/
�o-o_c-,o-0 -,(-.-0$-x -3,--.2-] /
1�00 l 1
v
"1,,.,_ V(!�� � U\l-
)
1- o o I
OOIO fX
0 2>0 (y 7-00
; " c...o""' e.
0. lj- )(.. 7--/n_ =- l \o.5'ot>] S hov...lJ
- 4. 5 C!>O
6. oaO o"-"- � Cc... b 'S
i...f.00 fiJ1-oo 0
5
. (v)
300. 000 x , 05 I 5000
7 500 ·200 ooo
930 000 I��
(vii)
X - 0 5 /4 Cff l'2
A}( 12-5/
3QOOO 0
'1 SO OD(!
£,�;\di f")_.95
� \�J�. 37-5U V
,- \, I ,,. i_ r co , t-o
f
>,
1-.e�,, rJ ., J,
0 3q o o o Bo.i 5 so 0
� �
c.A . .fLS
2-/. 0 t qso. ooO ::: �A).,vi:f\ �f,wice.,
C/ so. 000
(I; ,soooo
7'
c-�-, i-C-◊-. Ci-�
Ba.c\ O�b�
@) 3"800
3,800
'3 iCL;.
3i04-·-
ace � .A)<
8 6t.OOC B� 41-000
Rl¢.Ja\ u.<.\.l i Cl") g_QSUVQ. .Aj (
I
PrL IC/DOC
iSOcco([; 4-'�
(;(,OOC 0 -
Accounting - Higher Level 2003
QUESTION l
(a)
Trading, Profit and Loss Account the year ended 31/12/2002
Sales Less Cost of sales
Stock l/1/2002 Add Purchases
Less Stock 3 l /12/2002 Gross profit
Less Expenses
Administration Salaries and general expenses Patents written off Insurance
Depreciation - buildings
Selling and Distribution Loss on sale of delivery van Commission Depreciation- delivery vans
Add Operating income
WI
Wl
W3 W4 W5
W7
W6
Reduction in provision for bad debt.-s W 8 Rent Discount W 9
Operating profit Investment income
Mortgage interest W 10
Net profit for year
€
194,100 8 12,000 0
€
67,700 8 640.0000 707,700 (69,800) 0
9,650 0 19,000@ 234,750
4,1500 24,000@ 23,1750 51,325
€
982,000 8
(637,900) 344,100
(286,075) 58,025
6969 15,000 8 5,3000
79,021 10.500 8 89,521
(22,500) 0
�-
6
QU
ESTION 1-(continued)
(b)
Balance Sheet as at 31 December 2002
Cost Accumulated
Intangible Fixed Assets Patents (€60,000 - €12,000)
Tangible Fixed Assets Buildings Delivery vans
Financial Assets Investments
Current assets Stock VAT Investment income due Debtors Less provision
€
W 11 1,100,000@ 156,000@
�.!)00
W 12
Creditors: ameunts falling due within one year Creditors Mortgage interest due PRSI
Depreciation Net €
74,8258 �
86,S0o@ 18,7509 2,3008
€
1,100,000 81,175
I 1181 I 115
69,800@ 24,5000
6,0008
74,496 174,796
Total €
48,0008
1,181,175
200,000 @ 1,429,175
Bank 70,9008 (178,450) (3,654) 1,125.521
Financed by Creditors: amounts falling due after more than one year
9% Fixed mortgage
Capita) and reserves Capital l /1 /2002 Add Net profit
Less Drawings
Revaluation reserve Capital employed
W 13
3
680,0000 67,0210
747,021 37,S00@
709,521 216,0008
500,0008
925.521 1,425,5.21_
7
SECTION l (120 marks) Answer Question l OR any TWO other questions
1. Sole Trader - Final Accounts
The following Trial Balance was extracted from the Books ofOrla Dolan on 31/12/2007:
Buildings (Cost €580,000) Delivery Vans (Cost €85,000) 8% Investments (1/4/2007) 6% Fixed Mortgage (including increase of€50,000
received on 1/4/2007) Patents Debtors and Creditors Purchases and Sales Stock 1/1/2007 Commission Salaries and General Expenses Provision for Bad Debts Discount (net) Rent Mortgage interest paid for the first three months Insurance ( incorporating Suspense) VAT
Bank PRSI Drawings Capital
€ € 485,000 73,000
130,000
52,400 40,000
512,400 65,600
4,200 85,000
1,900 9,000 1,250 6,150
36,200
1.502.100
150,000
113,000 729,000
1,200
4,100 15,900 3,900
485,000 1,502,l0Q
The following information and instructions are to be taken into account:
(i) Stock at 31/12/2007 at cost was €75,000. No record has been made in the books for goods in transit on31/12/2007. The invoice for these goods had been received showing the recommended retail selling price of €6,000 which is cost plus 25%.
(ii) Provide for depreciation on vans at the annual rate of 15% of cost from date of purchase to date of sale.NOTE: On 31/3/2007 a delivery van which cost €30,000 on 30/9/2004 was traded against a new van which cost€36,000. An allowance of€10,000 was made on the old van. The cheque for the net amount of this transaction was entered in the bank account but was incorrectly treated as a purchase of trading stock. These were the only entries made in the books in respect of this transaction.
(iii) The suspense figure arises as a result of the posting of an incorrect figure for Mortgage Interest in the mortgage interest account and discount received €200 entered only in the creditors account. The correct interest wasentered in the bank account.
@ Goods with a retail selling price of €10,000 were returned to a supplier. The sel1ing price was cost plus 25%.The supplier issued a credit note showing a restocking charge of I 0% of cost price. No entry has been made in respect of the restocking charge.
@J Provision to be made for mortgage interest due. 20% of the mortgage interest for the year refers to the privatesection of the building.
(vi) Patents, which incorporate 3 months investment income received, are to be written off over a five year period,commencing in 2007.
(vii) Provide for depreciation on buildings at the rate of 2% of cost per annum. It was decided to revalue theBuildings at €800,000 on 31/12/2007.
@:i1J Goods withdrawn by the owner for private use during the year with a retail value of €2,000 which is cost plus25% were omitted from the books. @J A cheque for €600 had been received on 31 /I 2/2007 in respect of a debt of €1 ,000 previously written off as bad. The debtor has agreed to pay the remainder within I month. No entry was made in the books to record this transaction.
You are required to prepare a:
( a) (b)
Trading and Profit a· .. Loss Account for the year ended 31/12/2007. Balance Sheet as at;) ·12/2007 .
Page 2 of 12
(80) (40)
(120 marks)
8
+
0 r\c'- Do\CU")
1n H··-Q.
R.RP
Su.,,'\· bQ.d, corre.c.Hy 6v..� v..;t\h.0\,1..,\-
r�c.::crc,\.. cf o.. �<::'.S tcc.k;� Chcv..9.Q.
[,go@
,0000 ,._ , uu
\ '2.. s
pr { <: '<.. po...--.o.\ \ �Q S UJ?
o-/.> ·f C \..\. o,.,,J 'S
goo l gooo J
by
(sooo {
V
-+
'S000
\O'/,
,o�,. of
/
Cosr
8000
gOO
9
(v)
(1x)
0
2.0 '/.
to 0..
Good.-c>
D.d t-hQ.
0 f
'2.00 0
Mort.9qye
SQ.(+ic"J
DR.AwnvG-�
e D.Qb it
C�d.it 0
D rau.;; "J'.6 A )C
p ;J.,rC h c,✓-).Q/.) A Jc
Ba.d D.e.b r
'2.. 000 � , oo
,25
R.e C(A.JQ,('Q_ c\
Bo.r,'t, olD �<.\ i.A t1H.l by 600
Ba.(,\ D-«.bt R�t-cv12..--ecl
l1�o0eJ by 60 0
�b-\-ci-5 , ·-x:::reevo:?.ci by 40 0 .
go.<,\. D�br Rec0verQ.c\
\ �lV)Q.c.\ t;_y 4-00 ,.
10
251.
'.)c, .. .,eA
( l)
l' ,)
'200g
P\U"cho.A-V) S 12400
c r-Q.,c;l � l: o f'5 I 13 000
C lo'5 i ()Jj St:ock
t.000 X \00
I .. 2.S
So\d 30.000
R1<..Dl: ssooo
'"1-5000
X 0 i 5
>( 0 i 5
+- 4800
t- 4800
� 4800
;( 3j12.
N�\A.I '3600 C, X • l 5 lit. qjr2.,
., ' f\
� -: > t C
"30000 X � \ S
'30000 - Ii '2 .. 50
Loss on Di sposo..\
.,;;
18'1-50
10.00(J
,.;
"BSOOCJ -30.000 + 3b000
acc. � • \ 'l. COO + 1·'3,t,.'2.5 ._ l\ 2. 5 0
·-
,.:;;
-·
-·-
�
11
511-200
llr80O
7/- 9 <iSO 0
11·1.s
'8250
4050
\3425"
I l '2. 5 0 c!, t .cl ·
9 l 00 0
491·200
Accounting Higher Leve) - Marking Scheme
Question 1
Trading and Profit and Loss Account for the year ending 31/12/2007 [l]
€ € €
Sales 729,000 [3] Less Cost of Sales
Stock Add Purchases
Less Stock 31/12/2007 Gross Profit Less Expenses Administration
Patent written off Salaries and General expenses Discount Rent Insurance Depreciation - Buildings
Selling and Distribution Commission Depreciation -Delivery van Loss on sale of van
Add Operating Income Bad debt recovered
Operating Profit Add Investment Income
Less Mortgage Interest Net Profit
�., .... � ·c ._,, (., ,;,_ ,,, •. . ,.._ c, (',\ [
WI
W2
W3
W4
W5
W6 W7
W8
W9
11,000 (5) 85,000 [3]
l,700f6] 9,000 (3] 6,100 [7]
11,600 [4]
4,200 [3] 13,425 [5] 8,750 [5]
2
65,600 ["3] 490,400 [10] 556,000 {79,800l [6]
124,400
26,375
,
(476,200) 252,800
(150,775) 102,025
1,000 [3] 103,025
7,800 [4] 110,825
(6,600) [5] 104,225 [4]
! ·
., <
13
80
·,. f
Question I - continued
Balance Sheet as at 31/12/2007
lntangible Fixed Assets Patents (55,000 - 11,000)
Tangible Fixed Assets Buildings Delivery Vans
Financial Assets 8% Investments
Current Assets Stock Debtors Less provision Investment income due
WJO WI l & 12
Wl3
W8
Cost €
800,000 [J] 91,000 [2]
891.000
40,400 [2] (],200)(2]
Creditors: Amounts faJling due within one year Creditors WI4 Bank W15 VAT PRSI Mortgage interest due
Financed by Creditors: amounts faJling due after more than one year
6% Mortgage
Capital Add Net Profit
Less Drawings
Revaluation Reserve Capital Employed
Wl6
Wl7
3
Acc.Dep €
14,175 [3] �
79,800 [2]
39,200 5,200 [1]
118,600 [2] 15,300 [2J 4,100 [2] 3,900 [2] 6,750 [.2]
Net €
800,000 76,825
876,825
124,200
(148,650}
40
Total €
44,000 (4]
876,825
130,000 [2j 1,050,825
(24,450) 1,026,315
150,000 [2]
485,000 [2} 104,225 [l] 589,225 (39,450) [3] 549,775
326,600 i2J I 026.375
14
SECTlON 1 (120 marks) 2..0\0 Answer Question l OR any TWO other questions
1. Sole Trader - Final Accounts
The following Trial Balance was extracted from the books of Nora O'Connell on 31/12/2009:
Buildings (Cost €620,000) Delivery Vans (Cost €90,000) 4% Investments (01/07/2009) Patents 6% Fixed Mortgage (including increase of€80,000
received on 01/04/2009) Debtors and Creditors Purchases and Sales Stock 01/01/2009 Commission Salaries and General Expenses (incorporating Suspense) Provision for Bad Debts Discount (Net) Rent Mortgage Interest paid for the first three months Advertising VAT Bank PA YE and PRSI Drawings Capital
€ €
515,000 80,000
120,000 60,400
180,000 50,000 120,000
465,200 659,650 63,200 5,550
75,000 1,800
1,600 8,000 1,400 2,400
4,600 13,300 5,400
32,000 495,000
l,412,750 1,472,150
The following information and instructions are to be taken into account:
(i) Stock at 31/12/2009 at cost was €75,400. This figure includes damaged stock which cost€8,200 but which now has a net realisable value of€3,400.
(ii) Patents, which incorporate three months investment income received, are to be written offover a five year period commencing in 2009.
( iii) Provide for depreciation on vans at the annual rate of 12 ½% of cost from the date of purchase tothe date of sale. NOTE: On 31/03/2009 a van, which cost €24,000 on 30/09/2006, was traded inagainst a new van which cost €48,000. An allowance of€12,000 was given on the old van. Thecheque for the net amount of this transaction was incorrectly treated as a purchase of tradingstock. This was the only entry made in the books in respect of this transaction.
(iv) The suspense arises as a result of the incorrect figure for mortgage interest (although thecorrect entry had been made in the bank account) and from €1,000 paid towards PAYE andPRSI entered only in the bank account
(v) Goods with a retail selling price of €8,400 were returned to a supplier. The selling price wascost plus 20%. The supplier issued a credit note showing a restocking charge of I 0% of thecost price. No entry has been made in respect of this restocking charge.
(vi) Provision to be made for mortgage interest due. 10% of the mortgage interest for the yearrefers to the private section of the building.
(vii) Provide for depreciation on buildings at a rate of3% of cost per annum. It was decided torevalue the buildings at €850,000 on 31/12/2009.
(viii) The advertising payment is towards a 24 month campaign which began on 01/10/2009.(ix) A cheque for €400 had been received on 31/12/2009 in respect of a debt of €900 previously
written off as bad. The debtor has agreed to pay the remainder within one month. No entrywas made in the books to record this transaction.
You are required to prepare a:
(a) Trading and Profit and Loss Account for the year ended 31/12/2009.(b) Balance Sheet as at 31/12/2009.
Page 2 of9
(75) (45)
(120 marks)
15
·20lQ
!Vero..
i f'\Vo\v i r,.J
C..a.r·--.po,..;..9n
0
0 CC:'ll'")Ql \
.;
300
2400
2 i.,- .� 0 n\h S
(\ <J v Q.r\ i S ; ('")__}·
16
'2.,.0\ 0 17
50 \u..tion
(,) c \.osit:,y stock .;;; 7-54-00
Qo.,r--,.o.ged. srock ·- 4300 ·-
-frod i 09 7-0 600 i
l' ,) Po..\-Q.()'\-5 + 3 i""""'\\-h5 l:')vl2.l.:)�C"let")t i(")CO('(")e
60400 +· ( \ 20,000 X • 04 X 3/ri.)
--
61600
12;:.'2.0
6\ &00
-,_
-5
� A d � i ("'\ Q.,'X.f
·- \'2."320
4-9 2'30
'24000 x: t 2..½.1 \
6b 000 J< l2½. t.
r50
,g2.5O Ne.u..J I;-SO O O X l 2 '2 I · /4 9 JI 2 .= 4-S O C,
Der�iaJ,o" on vo.ns '3 50 0
Bo.c\-<:c\.o..tQ..
30\qlof> � 3.l\3)09
'2.4000 x.
21.+ooo - 7- soo - 16 soo
.:;;
L.055
\ )..00 0
4-SOO
: --=t S 00 J... t.cl
N.B.V.
18
Vc:,..nS qoooo ...:. 24000 + 4goOO- l, 4-000·-
(v)
(Vi)
O..cc . 0-Qf> \0000 + 13500 -7500 _, I bOOO
P�n:.,hc,..(.)Q/) 4&5200 -'3f.000 - 42.92.0 0
j,sooJ v [ooo] v
\)uAC,h� (�"�) Aj(
+oo j [Jooo]
Mer \-.90.gQ.
O\d • \00_000 X '
NQ;I).) goooo X
C/600 'I.. iO .. /. � C/60 -
•• ,ooo l � 5',-00
S. A Cr. 5 ,Af (.
B� "1-5000 l
I
\000 ° �
100 0
[7000]
I7-00
6/. )( * - 6000
61. )(. qj,1... - 3600
f)ro.w;".95 CJ bOO \
500
9600 y.._ qQ�/. .; �b.4-0 �s Q.. �8100 �
(v, i)
Be& 6'200001 0 1.30000
£1s600
Ace. De.p 1r}c
, o n .. '3 bOO Bol PrL
"2..30. CJOO o
31.)
1osooo
1'3600
I \ 1. 3 600 ° �
Bo.Q.
Bo.rJc o\ D
.., Oeb\-or5
-+ 900
l3300 - l;-0 0
so.ooo + 500
50. so 0
\ nvw\-f"l(;:r·J· \ "l col""') �
4 /. )( \20, ooo ')( 61 \2.
- 2..400
\ 2.00 dv-Q..
32000 q 6 0 fY"'or-tJo...92- tr-i\--Q..€.0�
32'160
12900
19
Accounting - Higher Level - Marking Scheme
Question 1
(a)
Trading and Profit and Loss Account for the Year ended 31/12/2009 [1]
€ € €
Sales Less Cost of Sales Stock 1/1/2009 63,200 Add Purchases WI 429,900
493,100 Less Stock 31/12/2009 W2 (70,600) Gross Profit
Less Expenses:
Administration Salaries and General expenses W3 73,900 [7] Rent 8,000 &�]Patents written off W4 12,320 [5]Depreciation Buildings 18,600 [3] 112,820
Selling and Distribution Commission 5,550 [3] Discount 1,600 fjJAdvertising WS 300 tsJLoss on sale of van W6 4,500 [6]Depreciation on vans W7 13,500 [S] 25,450
Add Operating Income Bad debt recovered Operating Profit Investment Interest W8
Less Mortgage Interest W9
Net Profit for the Year
[3] [6]
[5]
€
659,650 [3J
(422,500) 237,150
{138,270) 98,880
_2QQ(iJ 99,780
2,400 I�J 102,180
(8,640) [�] 93,540 [6']
Penalties: Deduction of2 x 1 mark for the omission of2 expense headings in the Profit & Loss account
4
20
(b)
Balance Sheet as at 31/12/2009
Intangible Fixed Assets Patents
Tangible fixed Assets Buildings Delivery Vans
Financial Assets 4% Investments
Current Assets Stock
WlOWll
Debtors W12 Less Provision for bad debts Investment Interest due Advertising prepaid
Cost Accumulated Depreciation
Net
€ € €
850,000 [l] 114,000 [2] 964,000
50,500 (1,800)
850,000 J6,000 [3] 98,000 � 948000
70,600 [2]
48,700 [3] 1,200 t2J 2,100 [2] 122,600
Creditors: Amounts falling due within one year: Creditors W13 Mortgage interest due PAYE & PRSI Wl4 VAT
120,700 [4] 8,100 [2] 4,400 f3J 4,600 [2]
Bank overdraft WJS 12,900 [3)(150,700)
Financed by Creditors: Amounts falling due after more than one year: [1]
6% Fixed Mortgage
Capital and Reserves Capital Add Revaluation Reserve W16 Add Net Profit
495,000 fl] 353,600 {3]
93.540 941,940
Total
€
49,280 [4]
948,000
120,000 {2] 1,117,280
(28,100) 1,089,180
I 80,000 [2]
Less Drawings Wl7 (32,960) [3J 908.980 I.089,180
5
21
22
PANY
. INAL
AC OUNTS
,, .., 1.,,' 1
' <
'
.,�'
, . ' ~ L '-.
) (\ �
\ \ l I \( 1 • ! , ,
23
Tynan Ltd. ha.a an Autlwriaed C&pital of £850,000 divided into 550,000 Ordinary Shares £1 each and 300,000 6% Preference Shares s.t £1 each. The follcrwing Trial Ba!Mee was extracted from its books on 31/12/1897.
Land and buildings at cost ............................... :; ..... m ..................... ., •••••
Accumulated depreciation• Land and buildings ..... : ........................... . Delivery vans at coat ............................................................................. . Accumulated depreciation • Delivery vans .......................................... . Patents (incorporating 4 months investment :income received} .......... . 9% Investments ..................................................................................... . Stocks 1/1/1997 ................................. ..................................................... . Purchases and Sales ........................................................ ...................... . Director's fees ....................................................................................... .. Salaries and general expenses .............................................................. . Debenture interest paid (1st Jan - Slat Marcil} ................................ ... Debtors and Creditors ........................................................................... . Provision for bad debts .•• � ...................................................................... . Interim dividends for first 3 months .................................................... . Profit and. lOBS balance 1/1/1997 .................................................... -. .... . 8% Debentures
(including £100,000 8% debentures issued at par on 31/3/1997) ... . VAT ......................................................................................................... .
Bank ....................................................................................................... . Iseued capital
400,000 Ordinary shares at £1 each ................................................ . 200,000 6% Preference shares of fl each ........................................ .
£ 700,000
180,000
47,000 100,000 45,000
480,000 50,000
186,000 3,000
69,000
15,000
1,825,000
The following information and instructions are to be taken into account:
£
86,000
80,000
770.000
44,000 2,100
22,000
250,000 14,000 6,900
400,000 200,000
1,825,000
(i) Stock at SJ/12/1997 a.t cost was £40,000 • this figure :includes old stock which cost £8,000 but hasa net realisttble value of 60% of cost.
(ii) Patents, which incol:"porated 4 months investment income, are to be w1•itten off over a 4 yearperiod commencing in 1997.
(iii) The figure for bank in the trial balance has been taken from the firm's bank account. However, abank statement dated 31/12/1997 has arrived showing an overdraft of £1,980. A comparison ofthe bank account and the bank statement bas revealed the following discrepancies:
1. .Investment income £3,750 1ha.d'b1t"� paicI1firect to the firm's bank account.2. A direct debit to ESB of £900 had not been recorded in the firm's books.3. A cheque for £760, issued to a supplier, had been entered in the books (cash book and ledger)
a.s.£57O.
4. A credit transfer of £260 had been pa.id direct to the firm's bank account on behalf of abankrupt debtor. This represents a first and final payment of l0p in the £1.
5. A cheque issued for £2,000 to a director had not yet been preSe'bl,l;\d '::•r payment.(iv) Provide for depreciation on delivery vans at the annual rate of 20% 1., � cost from the date of
purchase to the date of sale.NOTE: On 81/5/1997 a delivery van, which had cost £46,000 on 1/6/1995, was traded against anew van which cost £67,000. An allowance of £20,000 was made on the old van. The cheque for the net amount of thia transaction wae incorrectly treated aa a purchase of trading stock. Thiswas the only entry made in the books in :respect of this transaction.
(v) Buildings are to be depreciated at the rate of2% of coat per annum (land at cost was £160,000).At the end of 1997 the company re-valued the land and buildings at £850,000.
(vi) Provision be made for both investment :income and debenture interest due.(vii} Provision for bad debts be adjusted to 6% of debtors.
(viii) The directors recommend that:1. The preference dividend due be paid.2. A final dividend on ordinary shares be provided bringing the total dividend up to 8%.
You. are required to prepare a:
(a) Trading, Profit and Loss Account for the year ending 3.Vl2/1997.(b) Balance Sheet as at 31/12/1997.
Page2 of8
{75)
(45) ".'(l.2Jt marks}
24
(0
Stoel"
G. \ l998
40000 ' 8000) 36800
4 �000 + cl 00, 00() X .. 09 )( 4/ri.)
47--000 +- 3000 = 50,000 ·-:- 4
, 1-soo
3'1-SOC,
Bonk o\ D _A\c b'100 -3750 + qoo t-180 - 2.s-0
'r"\V. \r'\CO�.Q.. -· +3t50
s.A.&.5 13 6000 + 900 .: \36900
CrQ.cl,l:-orS ,. 4-L,. 000 ·- l80 r' 4?>7520
O'<--bt-or;, .: 6C, 000 -250 - 2250 : 66500
F,o.,d. D"-bt5 - 6 -
So\d 45000 X . 2. 'I- sb2 37-50 ..:
RJu> l:: \"3 S 000 X II 2. : 2 -i,00 0
N�vV s�oo (J X ·2 x 7J\2 665 0
25
---.:\ s 11 sjc;,-
4sooo X GL._ X 2yeor? 'w l800(J OL
Good. J Eo..<k DecJ 4- S-000 ·- 13000
-· 2rooo l\.JBV
v.2-0,000 a.tlol.,VO./\ lQ..
t-OO(J LOSS
vo..ns
a.ct. dA,,p
\150.000 ·- 45000 + SrOOO
13000
l 9200O
99400
®
4'80. 000 - 37-000 443,00C,
�),{J. r r A.
Bu.;\ cl I r,95 \ ' \-
1-00.00O + ISO.ODO
R.�vc& .. (f 1- /" .r-.-
I I
Qeu>e.rv'<.. + \ s·o. oo o t- Li--7-00C,
').' J. ,1" .,/,
D�('Q,C I G'-,t iO<'l 36.000 t- l I 000 - 47-000
\ :'IV e.Dh·••""')�-J- \ r'-1 c.o ("'""\ Q_
9 /, of l 00.000
- p � l-
B on k
I I
, , ,_,1,[,j C'•
9000 SHOULD
3000
"21..50 c..A. B.S
26
@
®
27
Deb<2r\ \-tLJ'(L I� t;Qr0:)t
•
.,,
,(•
@ 8/,o\d.. l 50, ooo .:; \2000
N�u...., l 0O.OO0 @ g ;, )(. '-f/i2 __ bOOO
l <[{000 (sHouLD)
D\ °" (J,ooo)
D� CrS L i yw.-r- ISOOO
b;. c-Q.- dtbt-orS
bbSOO � --ob
(dQ wJo 15000 - 3000
Ord..lc,o,y Div� P,4
PoJ J.. I 1..000 6' (_ b /. of 200.oo� 1,. 3/,2.)
"2.O.OO0
',.),'/ l_\f ' ·-
c '32.000 ::; C<2. i \ i "'.9 g / •- 12.000 Pd
p�Q Divl�J. � 6 .. /. J.- 200k
� , 2,000� PCM�::. 3000.. DvJL .: c, ooo
Accounting - Higher Level 1998
Question I - Final Accounts or a limited cdrnpany
(a) Trading, Profit and Loss Arrount of Tynan Ltd for the year ended 31/12/1997 \Bl
Sales Less Cost of sales
Stock l/ l/ I 997 Add Purchases
Less Stock
Gross profit less Expenses Administration
3 l/l2/1997
Directors fees Salaries & general expenses Patents written off Depreciation - buildings
Selling and Distribution Bad debts written off Depreciation- delivery vans Loss on sale of van lncrease in provision for bad debts
Operating profit Investment income
Debenture interest Net profit for year before taxation Less Appropriation
Preference dividend paid Ordinary dividend paid Preference dividend proposed Ordinary dividend proposed
Retained profit Profit and loss balance l/1/i997 Profit and loss balance 31/llil 997
WI
W2
W3 w ➔
ws
W6 W 7 W8
£
50.000 e\36.900@
12 . .500@ 11.000 e
2,250@ 37-400@
1,000@[,890@
C. R.t:011
£ £ 770,000@
45,000@ 443,000@ 488,000 (36,800}0 {451,200}
318,800
210,400
48,540 258,940 59,860
9.000 0 68,860
{18.000}@ ·so,860
3,000 fl11,000@ 9,000 49
20,000 @ (44,000)
(::ALAt\.CG 6,860
22.000@ 28,860@
2