Book-keeping

Level 1

Model Answers
Series 2 2006 (Code 1606) Malaysia

1 1606/2/06

ASE 1006 2 06 3 >f0t@W9W2`Bp5eBk0j8[#

Book- Keeping Level 1 Malaysia

Series 2 2006

How to use this booklet Model Answers have been developed by Education Development International plc (EDI) to offer additional information and guidance to Centres, teachers and candidates as they prepare for LCCI International Qualifications. 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, plus a fully worked example or sample answer (where applicable) where appropriate, additional guidance relating to individual questions or to examination technique

(3)

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QUESTION 1 The following list of balances was extracted from Angelas books at 31 March 2006. RM 20,597 9,842 157,325 234 6,200 720 26,549 55,428 72,612 438 338 12,850 6,000 250 10,000 15,500 24,000 ?

Angelas Capital account at 1 April 2005 Drawings Sales Returns inwards Provision for depreciation: Vehicles Premises Trade debtors Overhead expenses Purchases Returns outwards Carriage inwards Creditors Stock at 1 April 2005 Cash Long term loan Vehicles at cost Premises at cost Bank

REQUIRED (a) Prepare Angelas trial balance at 31 March 2006 to calculate the bank balance (22 marks) (b) Copy the following list into your answer book and state the classification of each account as real, personal or nominal. Only one classification will apply to each account: (i) (ii) (iii) (iv) (v) (vi) Premises at cost account Overhead expenses account Carriage inwards account A creditors account Cash account Drawings account (3 marks) (Total 25 marks)

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MODEL ANSWER TO QUESTION 1

Angela Trial balance at 31 march 2006 (a) Angelas Capital account at 1 April 2005 Drawings Sales Returns outwards Provision for depreciation - Vehicles Provision for depreciation - Premises Trade debtors Overhead expenses Purchases Returns inwards Carriage inwards Creditors Stock at 1 April 2005 Cash Long term loan Vehicles at cost Premises at cost Bank balance (overdraft) 210,753 15,500 24,000 2,623 210,753 6,000 250 10,000 26,549 55,428 72,612 234 338 12,850 9,842 157,325 438 6,200 720 Debit RM Credit RM 20,597

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MODEL ANSWER TO QUESTION 1 CONTINUED

(b) Premises at cost account Overhead expenses account Carriage inwards account A creditors account Cash account Drawings account Real Nominal Nominal Personal Real Personal

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QUESTION 2 Laura keeps her petty cash book on the imprest system, she balances her books monthly and makes up the balance to RM 200.00 on the first day of each month. On 31 January 2006 petty cash in hand was RM68.35. The petty cash book has 3 analysis columns Postage and stationery expenses, Travelling expenses and Office expenses. The following transactions were dealt with by the petty cashier: RM February 1 3 5 7 10 17 20 28 1 5 7 11 15 18 26 30 Restored imprest Paid for stationery Paid for petrol Paid for postage stamps Paid for coffee Paid for train ticket Paid for sugar Paid for petrol Restored imprest Paid for postage stamps Paid for tea Paid for cleaning materials Paid for train ticket Received from sale of postage stamps Paid for stationery Paid for petrol 15.25 25.07 3.25 16.49 30.00 2.50 22.77

March

5.80 4.70 2.50 18.50 1.95 24.30 24.86

On 1 April Laura reduced the imprest to RM 150. REQUIRED: (a) Write up the petty cash book for the two month period. It should be balanced at the end of each month and the imprest restored on the first day of the following month. (18 marks) (b) Prepare the following ledger accounts for both months: (i) Postage and stationery expenses (ii) Travelling expenses (iii) Office expenses (7 marks) (Total 25 marks)

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MODEL ANSWER TO QUESTION 2 (a) Laura - Petty cash book Receipts

2006 February

RM 68.35 131.65

Payments Total Postage & Stationery RM RM

Travelling Expenses RM

Office Expenses RM

Balance b/f Bank Stationery Petrol Stamps Coffee Train ticket Sugar Petrol Balance c/d 15.25 25.07 3.25 16.49 30.00 2.50 22.77 115.33 84.67 200.00 15.25 25.07 3.25 16.49 30.00 2.50 18.50 22.77 77.84 18.99

3 5 7 10 17 20 28 28 200.00 March 1 84.67 115.33

Balance b/d Bank Stamps Tea Cleaning materials Train ticket Sale of stamps Stationery Petrol Balance c/d 5.80 4.70 2.50 18.50 24.30 24.86 80.66 121.29 201.95 24.30 30.10 24.86 43.36 7.20 5.80 4.70 2.50 18.50

5 7 11 15 18 26 30 31 201.95 April 1 121.29 28.71

1.95

Balance b/d Bank

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MODEL ANSWER TO QUESTION 2 CONTINUED

(b) 2006 February March 28 31

Postage & stationery RM 2006 PCB 18.50 PCB 30.10 March 31 Travelling expenses RM PCB 77.84 PCB 43.36

RM

PCB

1.95

2006 February March

28 31

2006 February March

28 31

PCB PCB

Office expenses RM 18.99 7.20

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QUESTION 3 Andrew is a wholesaler who records invoices in day books. The following transactions occurred during January 2006: Purchases: January 11 12 15 23 28 30 Bill Charles Ella Bill Ella Ella Invoice No 726 727 728 729 730 731 Invoice No 9 16 19 23 Jack Kelly Mona Kelly 853 854 855 856 List Price - RM 240 650 420 360 500 280 List price RM 120 150 190 100 Trade Discount % 60 50 40 60 40 40 Trade Discount % 25 20 10 20

Sales: January

(1) Bill allows a cash discount of 5% on items paid within 14 days of invoice (2) Ella allows a cash discount of 2% on items paid within 7 days of invoice date (3) Charles allows no cash discount Payments: January

24 25 29

Payment was made to clear Bills account Payment was made to Ella for invoice 728 Payment was made to Ella for invoice 730

REQUIRED For Andrews business (a) (i) the Purchase day book (ii) the Sales day book (iii) the Cash book (b) The ledger accounts for: (i) Ella (ii) Sales (iii) Purchases (iv) Discount received (4 marks) (1 mark) (1 mark) (2 marks) (6 marks) (4 marks) (7 marks)

(Total 25 marks)

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MODEL ANSWER TO QUESTION 3 (a) (i) Jan 11 12 15 23 28 30 Bill Charles Ella Bill Ella Ella

Purchase Day Book RM 96 325 252 144 300 168 1285 Sales Day Book

(ii) Jan

9 16 19 23

Jack Kelly Mona Kelly

RM 90 120 171 80 461

Cash Book (iii) Jan 24 25 29 Bill Ella Ella Discount RM 12 6 18 Bank RM 228 252 294

(b) Ella Account RM Jan 15 252 28 294 6 30 31 Balance c/d 168 720 Feb Sales Account (ii) Jan 31 Sundries RM 461 1 Balance b/d Purchases 168 720 168

(i) Jan 25 29 Bank/Cash Bank/Cash Discount received

Purchases Purchases

RM 252 300

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MODEL ANSWER TO QUESTION 3 CONTINUED Purchases Account RM 1285 Discount Received Account (iv) Jan 31 Sundries RM 18

(iii) Jan

31

Sundries

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QUESTION 4 James, a sole trader, has produced his own financial statements for the year ended 31 March 2006. James attempt at a balance sheet is shown below: Assets Stock at 31 March 2006 Creditors Cash Drawings Equipment (cost) Vehicles (cost) Accruals Bank overdraft Provision for doubtful debts Net profit for the year Liabilities Debtors Prepayments Provision for depreciation of equipment Provision for depreciation of vehicles Net assets RM 4,200 3,600 150 4,000 2,000 10,000 125 1,075 300 12,300 6,500 250 1,200 5,000 RM

37,750

12,950 24,800

Capital at 1 April 2005

3,500

Additional information: (1) No depreciation has been charged for the year. Calculations, in line with previous years, should have been: Equipment 20% using the straight line method Vehicles 30% using the reducing balance method No fixed assets were purchased or sold during the year ended 31 March 2006. (2) A debt of RM200 should be written off, but the provision for doubtful debts should remain at RM300. (3) An item of stock valued at RM500 (included in the RM4,200) is damaged and its value should be reduced to RM150. The profit of RM12,300 must be amended to take account of the 3 notes above. REQUIRED Prepare a revised Balance Sheet at 31 March 2006, in good form, for James business.

(Total 25 marks)

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MODEL ANSWER TO QUESTION 4 James Balance Sheet at 31 March 2006 Fixed Assets Equipment Vehicles Current Assets Stock Debtors Less provision for doubtful debts Prepayments Cash Current Liabilities Bank overdraft Creditors Accruals Net Assets Capital 1 April 2005 Add net profit Less drawings 3,500 9,850 13,350 4,000 9,350 Cost RM 2,000 10,000 12,000
Depreciation

RM 1,600 6,500 8,100 3,850

NBV RM 400 3,500 3,900

6,300 300

6,000 250 150 10,250

1,075 3,600 125 4,800 5,450 9,350

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