Book-keeping and Accounts

Level 2

8991-02-002
2012 Sample Paper

Candidate’s name (Block letters please)

Centre no Date

Time allowed: 2 hours

(Plus 5 minutes' reading time)

Note making is not allowed during reading time.

The marks allocated to each question are shown

in brackets.

All answers must be written in ink.

Calculators may be used.

Show all your workings.

If additional separate sheets of paper are used, make sure

each page is clearly labelled with your name.

For examiner’s use only

T1 T2 T3 T4 T5 T6 T7 Total

/12 /35 /9 /8 /9 /9 /18 /100

C1
Scenario

You work as an accounts clerk and your work is quite varied. There are a number of
tasks that you need to complete today and these are outlined below.

Task 1

One of the accounts trainees needs your help in correcting some error(s) and
omission(s) from the books of James Company. These are as follows:

• $200 cash received from sale of an old motor vehicle had been entered in the
discount received account

• A cash payment of $250 for rent entered in the cash book had not been
entered in the rent account

• The sales account had been under-cast by $360

• A private purchase of a $3 000 motor vehicle had been included in the

business motor vehicles account

• Sale of goods to Ruth Brooks had been correctly entered in the sales account
as $2 850 but had been entered in the personal account as $2 580.

Correct these errors in the journal on the opposite page with suitable narratives.
(12 marks)

C2
 Journal

Details Dr Cr
$ $

C3
Task 2

Your next task is to complete the extended trial balance of one of your clients, The Stone Pony Company, shown below. A number of
adjustments need to be made before this can be done and these are as follows:

• Closing stock was valued at cost $4 000

• The provision for doubtful debts is to be 3% of debtors
• Wages and salaries of $550 are accrued due
• Rent and rates have been prepaid by $150
• Depreciation is to be provided for as follows:
• Motor vehicles: 10% straight line method
• Machinery: 15% reducing balance method

a) Complete the adjustments in the extended trial balance.

(10 marks)

b) Complete the trading, profit and loss account in the extended trial balance.
(11 marks)

c) Complete the balance sheet in the extended trial balance.

(14 marks)

(Total 35 marks)

C4
 Extended Trial Balance The Stone Pony Company Year to 31 January
Account Trial Balance Adjustments Trading, Profit & Balance Sheet
Loss
Dr Cr Dr Cr Dr Cr Dr Cr
$ $ $ $ $ $ $ $
Creditors 5 000
Sales 99 500
Purchases 32 600
Cash at bank 1 350
Debtors 11 400
Provision for doubtful debts 228
Machinery at cost 55 000
Motor vehicles at cost 30 000
Machinery – provision for depreciation 25 000
Motor vehicles – provision for depreciation 10 000
Rent and rates 10 840
Wages and salaries 31 250
Bad debts 450
Opening stock 5 000
Capital 38 662
Drawings 500
Accruals
Prepayments
Closing stock
Doubtful debts
Depreciation – Machinery
Depreciation – Motor vehicles
Net profit/loss
Totals 178 390 178 390

C5
Task 3

Next you have to complete some ledger accounts for Jimmy Company which needs
to know its depreciation charges for the end of its financial year. The company has
two fixed assets; the balances in these accounts at the start of its financial year was
Machinery $60 000 and Motor vehicles $45 000.

The balances in the provision for depreciation accounts was as follows; Machinery
$25 000 and Motor vehicles $15 000.

The company’s policy is to depreciate Machinery at 15% reducing balance method

and Motor vehicles at 12% straight line method. In both cases there is no residual
value on these assets.

Complete the ledger accounts below for the end of the financial year, bringing down
the balances (dates are not required).

Machinery Account
Details Amount Details Amount
$ $

(1 mark)

Provision for Depreciation Account - Machinery

Details Amount Details Amount
$ $

(3 marks)

Motor Vehicles Account

Details Amount Details Amount
$ $

(1 mark)

Provision for Depreciation Account – Motor Vehicles

Details Amount Details Amount
$ $

(4 marks)

(Total 10 marks)

C6
Task 4

Timmy Tucker has a grocers shop and he has requested that you classify the
following list of items of expenditure as capital expenditure or revenue expenditure.

Classify the expenditure below by placing a tick (√) in the correct box for each item.

Item of Revenue Capital

Expenditure Expenditure Expenditure
Wages of shop staff
New delivery van
New box of apples
Carriage on new box of apples
Installing new kitchen area and sink
Repainting of shop front
Insurance of shop
New fixtures and fittings

(8 marks)

C7
Task 5

The Jimmy Company has come back to you for some more help with its accounts,
this time looking at its bad and doubtful debts. The company’s trade debtors control
account has a balance of $150 000 before any bad debts have been written off. Two
trade debtors, for Keith Paulie $350 and Thomas Tan $650 respectively, need to be
written off.

Once this has been done you need to adjust the provision for doubtful debts account
to be 2% of outstanding debtors. The balance on this account currently stands at
$2 800.

Complete the ledger accounts below for the Jimmy Company bringing down the
balances (dates are not required).

Trade Debtors Control Account

Details Amount Details Amount
$ $

(3 marks)

Bad Debts Account

Details Amount Details Amount
$ $

(3 marks)

Provision for Doubtful Debts Account

Details Amount Details Amount
$ $

(3 marks)

(Total 9 marks)

C8
Task 6

Now you look at the accounts of Gary Connolly which need the following adjustments
making to them:

• A prepayment of rates has been made amounting to $76

• Wages amounting to $338 have been accrued due
• Gary sublets part of his premises. The tenant still owes Gary $64

Complete the accounts below to record the adjustments, bringing down the balances.
Show clearly the amount to be transferred to the profit and loss account.

Rates Account
Details Amount Details Amount
$ $
Balance b/d 1 162

(3 marks)

Wages Account
Details Amount Details Amount
$ $
Balance b/d 12 316

(3 marks)

Rent Received Account

Details Amount Details Amount
$ $
Balance b/d 982

(3 marks)

(Total 9 marks)

C9
Task 7

Now you look at some purchase ledger accounts which need reconciling with the
control account. On 1 December the balances on Nunu Miah’s purchase ledger were
as follows:

$
Farah Begum 2 120 cr
Jil Singh 4 005 cr
Al Patel 35 dr

During the month of December the following transactions took place:

Cash Credit Purchase Payments Discount

Purchases Purchases Returns on account received
by cheque
$ $ $ $ $
Farah Begum 980 9 440 770 6 790 260
Jil Singh 80 9 995 275 7 996 357
Al Patel 1 005 4 690 386 Nil Nil

a) Write up the Purchase Ledger Accounts for the month ended 31 December.

b) Prepare the Purchase Ledger Control Account for the month ended
31 December, bringing down the balance.

c) Reconcile the Control Account balance with the Ledger Account balances.

Farah Begum Account

Details Amount Details Amount
$ $
Balance b/d 2 120

(4 marks)

Jil Singh Account

Details Amount Details Amount
$ $
Balance b/d 4 005

(4 marks)

C10
 Al Patel Account
Details Amount Details Amount
$ $
Balance b/d 35

(2 marks)

Purchase Ledger Control Account

Details Amount Details Amount
$ $
Balance b/d 35 Balance b/d 6 125

(4 marks)

Reconciliation of Ledger Balances with Control Account Balances

(4 marks)

(Total 18 marks)

End of Examination

C11