LCCI International Qualifications

Book-keeping
Level 1

Model Answers
Series 2 2009 (1017M) Malaysia

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Book-Keeping Level 1 (Malaysia)
Series 2 2009

How to use this booklet

Model Answers have been developed by 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) Questions – reproduced from the printed examination paper

(2) Model Answers – 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)

(3) Helpful Hints – where appropriate, additional guidance relating to individual

questions or to examination technique

Teachers and candidates should find this booklet an invaluable teaching tool and an aid to success.

EDI provides Model Answers to help candidates gain a general understanding of the standard
required. The general standard of model answers is one that would achieve a Distinction grade. EDI
accepts that candidates may offer other answers that could be equally valid.

© Education Development International plc 2009

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Page 1 of 10
QUESTION 1

The following Trial Balance was prepared at 29 February 2008.

Dr Cr
RM RM
Vehicles at cost 50,000
Equipment at cost 70,000
Depreciation provisions at 1 March 2007:
Vehicles 18,000
Equipment 24,000
Debtors 96,140
Creditors 21,670
Bank – deposit account 3,000
Bank – current account overdrawn 9,640
Drawings 13,650
Petty cash 165
Stock at 1 March 2007 25,340
Rent received 800
Sales 561,898
Purchases 282,330
Returns out 1,840
Returns in 2,150
Interest received 150
Rent, rates and insurance 9,240
Vehicle expenses 7,248
Office expenses 25,735
Wages and salaries 103,540
Bad debts 920
Capital at 1 March 2007 ……….. ?
536,918 790,538

REQUIRED

Prepare the corrected Trial Balance at 29 February 2008.

(Total 25 marks)

1017M/2/09/MA Page 2 of 10
MODEL ANSWER TO QUESTION 1

Trial Balance at 29 February 2008

RM RM
Dr Cr
Vehicles at cost 50,000
Equipment at cost 70,000
Depreciation provisions at 1 March 2007:
Vehicles 18,000
Equipment 24,000
Debtors 96,140
Creditors 21,670
Bank - Deposit Account 3,000
Bank - Current Account overdrawn 9,640
Drawings 13,650
Petty cash 165
Stock at 1 March 2007 25,340
Rent received 800
Sales 561,898
Purchases 282,330
Returns out 1,840
Returns in 2,150
Interest received 150
Rent, rates and insurance 9,240
Vehicle expenses 7,248
Office expenses 25,735
Wages and salaries 103,540
Bad debts 920
Capital 1 March 2007 ..……… 51,460
689,458 689,458

1017M/2/09/MA Page 3 of 10
QUESTION 2

Henry keeps his Petty Cash Book on the imprest system. On 31 March 2008 petty cash in hand was
RM65.87

The Petty Cash Book has 3 analysis columns – ‘Travelling expenses’, ‘Office expenses’ and ‘Postage
and Stationery’.

The following transactions were dealt with by the petty cashier:

RM
April 1 Restored imprest
4 Postage 10.00
5 Rail ticket 15.48
6 Tea and coffee 14.78
12 Petrol 24.85
18 Stationery 12.50
25 Postage 17.50

May 1 Restored imprest

5 Taxi fare 12.00
9 Cleaning materials 3.54
14 Rail ticket 18.64
16 Received from Chris (sale of postage stamps) 5.00
21 Tea 7.07
25 Petrol 18.65

REQUIRED

(a) Prepare the Petty Cash Book for the two months ended 31 May 2008. It should be balanced at
the end of each month and the float restored to RM100.00.
(19 marks)

(b) Prepare the ledger accounts for:

Travelling expenses
Office expenses
Postage and Stationery.
(6 marks)

(Total 25 marks)

1017M/2/09/MA Page 4 of 10
MODEL ANSWER TO QUESTION 2

(a) Petty Cash Book - Henry

Receipts Payments
Travel Office Post &
Total expenses expenses Stationery
RM Date Details RM RM RM RM
65.87 Apr 1 Balance b/f
34.13 Bank
100.00
4 Postage 10.00 10.00
5 Rail ticket 15.48 15.48
6 Tea and coffee 14.78 14.78
12 Petrol 24.85 24.85
18 Stationery 12.50 12.50
25 Postage 17.50 …….. …….. 17.50
95.11 40.33 14.78 40.00
……… Balance c/d 4.89
100.00 100.00

4.89 May 1 Balance b/d

95.11 Bank
100.00
5 Taxi 12.00 12.00
9 Cleaning mat’ls 3.54 3.54
14 Rail ticket 18.64 18.64
5.00 16 Sale of stamps
21 Tea 7.07 7.07
25 Petrol 18.65 18.65 ……..
59.90 49.29 10.61
……… 31 Balance c/d 45.10
105.00 105.00

45.10 Jun 1 Balance b/d

(b)
Travelling expenses
2008 RM 2008 RM
Apr 30 PCB/Sundries 40.33
May 31 PCB/Sundries 49.29

Office expenses
2008 RM 2008 RM
Apr 30 PCB/Sundries 14.78
May 31 PCB/Sundries 10.61

Postage and stationery

2008 RM 2008 RM
Apr 30 PCB/Sundries 40.00
May 31 PCB/Sundries 5.00

1017M/2/09/MA Page 5 of 10
QUESTION 3

On 1 January 2008 George purchased a vehicle for RM30,000. George is unsure whether to use the
straight line method or the reducing balance method to depreciate the asset.

REQUIRED

(a) Prepare the Provision for Depreciation Account for the three years ended 31 December 2008,
2009 and 2010 using the straight line method. The residual value is expected to be RM5,000
following 5 years’ of use.
(6 marks)

(b) Prepare the Provision for Depreciation Account for the three years ended 31 December 2008,
2009 and 2010 using the reducing balance method, at the rate of 30% per annum.
(6 marks)

(c) Show, for each of the depreciation methods used in (a) and (b), the recording of vehicles in the
Balance Sheets at 31 December 2008, 2009 and 2010.
(6 marks)

During 2008, George’s business made payments for the following items:

(i) Computing equipment

(ii) 12 month computer maintenance contract
(iii) Computer installation costs
(iv) Training course for staff
(v) Stationery
(vi) Computer repairs
(vii) Additional computer printers.

REQUIRED

(d) State, for each of the items (i) to (vii), whether the payment was for capital expenditure or
revenue expenditure.
(7 marks)

(Total 25 marks)

1017M/2/09/MA Page 6 of 10
MODEL ANSWER TO QUESTION 3

(a) Provision for depreciation account (straight line)

2008 RM 2008 RM
Dec 31 Balance c/d 5,000 Dec 31 P & L a/c * 5,000

2009 2009
Jan 1 Balance b/d 5,000
Dec 31 Balance c/d 10,000 Dec 31 P & L a/c * 5,000
10,000 10,000

2010 2010
Jan 1 Balance b/d 10,000
Dec 31 Balance c/d 15,000 Dec 31 P & L a/c * 5,000
15,000 15,000

2011
Jan 1 Balance b/d 15,000

(b) Provision for depreciation account (reducing balance)

2008 RM 2008 RM
Dec 31 Balance c/d 9,000 Dec 31 P & L a/c ** 9,000

2009 2009
Jan 1 Balance b/d 9,000
Dec 31 Balance c/d 15,300 Dec 31 P & L a/c ** 6,300
15,300 15,300

2010 2010
Jan 1 Balance b/d 15,300
Dec 31 Balance c/d 19,710 Dec 31 P & L a/c ** 4,410
19,710 19,710

2011
Jan 1 Balance b/d 19,710

Workings

(a) Straight line

Annual expense = (Cost – Estimated sale price)/Life

= (30,000 – 5,000)/5 = RM5,000 per year

(b) Reducing balance RM

Cost 30,000
Dep’n year 1 - 30% 9,000
NBV year 1 21,000
Dep’n year 2 - 30% 6,300
NBV year 2 14,700
Dep’n year 3 - 30% 4,410
NBV year 3 10,290

1017M/2/09/MA Page 7 of 10
MODEL ANSWER TO QUESTION 3 CONTINUED

(c) Balance Sheet extracts at 31 December (using straight line):

2008 2009 2010
RM RM RM
Motor vehicles
Cost 30,000 30,000 30,000
Less depreciation 5,000 10,000 15,000
Net book value 25,000 20,000 15,000

Balance sheet extracts at 31 December (using reducing balance):

2008 2009 2010
RM RM RM
Motor vehicles
Cost 30,000 30,000 30,000
Less depreciation 9,000 15,300 19,710
Net book value 21,000 14,700 10,290

(d) (i) Capital

(ii) Revenue
(iii) Capital
(iv) Revenue
(v) Revenue
(vi) Revenue
(vii) Capital

1017M/2/09/MA Page 8 of 10
QUESTION 4

Jane’s bank balance at 30 November 2008 was RM2,006.59 Dr. The following bank transactions
occurred during December:
Cheque
Number RM

Dec 2 Paid Ken 175 206.44

5 Received from Kate, who had deducted
RM5.00 discount 95.00
8 Received from James 546.00
10 Paid Peter, after deducting discount of
RM15.50 176 186.55
12 Paid June 177 235.64
Paid Edna, after deducting discount of
RM4.80 178 91.20
18 Received from William 500.00
23 Paid wages 179 850.00
24 Received from Henry, who had deducted
RM15.00 discount 585.00
28 Paid Gerald 180 165.00

REQUIRED

(a) Prepare, for Jane, the bank and discount columns of her Cash Book for the month of
December 2008, carrying down the final balance.
(15 marks)

On 2 January 2009 Jane received the following bank statement:

Dr Cr Balance
RM RM RM
Dec 1 Balance 2,006.59 Cr
5 Kate 95.00 2,101.59 Cr
6 175 206.44 1,895.15 Cr
8 CT - Wendy 140.00 2,035.15 Cr
James 546.00 2,581.15 Cr
14 176 186.55 2,394.60 Cr
18 DD - Gas 180.00 2,214.60 Cr
William 500.00 2,714.60 Cr
178 91.20 2,623.40 Cr
23 179 850.00 1,773.40 Cr
Dividend 62.35 1,835.75 Cr
24 Henry 585.00 2,420.75 Cr

REQUIRED

(b) Using information from the bank statement, update Jane’s Cash Book.
(5 marks)

(c) Prepare the Bank Reconciliation Statement for Jane, commencing with the balance as per the
bank statement RM2,420.75.
(5 marks)

(Total 25 marks)

1017M/2/09/MA Page 9 of 10
MODEL ANSWER TO QUESTION 4

(a) Cash Book - Jane

Disc. Bank Disc. Bank

2008 RM RM 2008 RM RM
Dec 1 Bal b/f 2,006.59
Dec 2 Ken 175 206.44
5 Kate 5.00 95.00
8 James 546.00
10 Peter 176 15.50 186.55
12 June 177 235.64
Edna 178 4.80 91.20
18 William 500.00
23 Wages 179 850.00
24 Henry 15.00 585.00
28 Gerald 180 165.00
……. ………… 31 Bal c/d …….. 1,997.76
20.00 3,732.59 20.30 3,732.59
31 Bal b/d 1,997.76

(b) Cash Book update

Bank Bank
2008 RM 2008 RM
Dec 31 Bal b/f 1,997.76
8 CT - Wendy 140.00
Dec 18 DD - Gas 180.00
23 Dividend 62.35
………… 31 Bal c/d 2,020.11
2,200.11 2,200.11
2009
Jan 1 Bal b/d 2,020.11

(c) Bank Reconciliation Statement at 31 December 2008 - Jane

RM RM
Balance per the bank statement 2,420.75
Less unpresented cheques
177 June 235.64
180 Gerald 165.00
400.64
Balance per Cash Book 2,020.11

1017M/2/09/MA Page 10 of 10 © Education Development International plc 2009

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