A2 1 Accounting — Past Papers
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11 min readJun 5, 2016
June 2015 Question 2
Workings:Closing Inventory
At 5 April = 6 750
Goods sold = (8 250 / 1.2 = 6875)
Purchased = (4 950)
At 31 March = 10 025 Closing Inventory £
Opening Inventory 6 750
Purchases 30 310
Less Closing Inv (10 025)
Cost of Sales 27 035Sales = Cost of Sales + 20%
Sales = 27 035 x 1.2 = 32 442Farah
Income Statement for the year ended 31 March 2015 £ £
Sales 32 442
Opening Inventory 6 750
Purchases 30 310
Less Closing Inventory (10 025)
Cost of Sales 27 035
Gross Profit 5 407Less Expenses
Insurance 8 290
Light and Heat 3 460
Loss on disposal 375
Depreciation 4 505
16 620
Loss for the year 11 223Workings:
Sales Control Account
Balance b/d 3 540 Receipts from Trade Receivables 26 820
Sales 32 442 Balance c/d 9 162
35 982 35 982
Balance b/d 9 162Purchases Control Account
Payments to TP 21 650 Balance b/d 1 960
Balance c/d 10 620 Purchases 30 310
32 270 32 270
Balance b/d 10 620Light and Heat Account
Bank 2 695 Balance b/d 480
Balane c/d 1 245 Income Statement 3 460
3 940 3 940
Balance b/d 1 245Insurance Account
Balance b/d 725 Income Statement 8 290
Bank 7 735 Balance c/d 170
8 460 8 460
Balance b/d 170Opening CapitalAssets - Liabilities = CapitalPrepayments + Inventory + Non-Current Assets + Trade Receivables = 33 685Accruals + Trade Payables + Overdraft = 6 22533 685 - 6 225 = 27 460 Opening CapitalFarah
Statement of Financial Position as at 31 March 2015
£ £
Non-Current Assets 13 515Current Assets
Inventory 10 025
Trade Receivables 9 162
Prepayment of expenses 170
19 357Current Liabilities
Trade Payables 10 620
Accrual of expenses 1 245
Overdraft 9 770
21 635
Net Assets (2 278)
Net Current Assets 11 237Financed By
Capital
Opening Capital 27 460
Less loss for year (11 223)
16 237
Less Drawings (5 000)
11 237
June 2015 Q3
Workings:Depreciation
251 900 - 347 500 = (95 600)
(95 600) + 123 645 = 28 045
28 045 - 25 470 = 2 575
2 575 + 29 925 = 32 500Profit from operations
Retained earnings increased by 74 336Tax for the year ended was 12 600
Profit += 12 600 = 86 966
Profit += 11 500 = 98 466
Profit += dividends (7 875) = 106 341Hickey Ltd
Statement of Cash flows for the year ended 31 May 2014
£ £
Cash flows from operating activities
Profit from operations 106 341
Loss on disposal 5 094
Depreciation charge for the year 32 500
Inventory (19 120)
Trade Receivables 14 340
Trade Payables 13 384
Cash from operations 152 539
Interest paid (11 500)
Taxation paid (11 700)
Net cash from operating activities 129 339Cash flows from investing activities
Purchase of non-current assets (123 645)
Proceeds from sale of non-current assets 20 376
Net cash used in investing activities (103 269)Cash flows from financing activities
Loan repayment (25 000)
Dividends paid (7 875)
Net cash used in financing activities (32 875)
Decrease in cash and cash equivalents (6 805)
Cash and cash equivalents at beginning of year 3 940
Cash and cash equivalents at end of year 2 865
June 2014 Q1
Prepare the partners’ capital accounts at 1 June 2014 to show the retirement
of Pritchard. [14 marks]Workings:
Motor Vehicle -> Dr Pritchard Cr Motor Vehicle/Non-Current AssetRevaluation -> Dr Non-Current Asset 26 500 Cr RevaluationInventory -> Dr Capital Account Cr Inventory 3 400Provision for doubtful debts = 24 540 - 7 415 = 17 125 x 0.04 = 685
Dr Provision for doubtful debts Cr Trade ReceivablesGoodwill = 33 000Goodwill Account
Goodwill created Goodwill written off
B 16 500 B 19 800
L 11 000 L 13 200
P 5 500
33 000 33 000Revaluation Account
Inventory 3 400 Non-Current Assets 26 500
Trade Receivables 8 100
B 7 500
L 5 000
P 2 500
26 500 26 500Capital Account
B L P B L P
Goodwill w/o 19 800 13 200 Balance b/d 105 000 70 000 35 000
Loan Account 10 000 Goodwill created 16 500 11 000 5 500
Motor Vehicle 2 000 Revaluation 7 500 5 000 2 500
Current Account 14 100
Bank 16 900
Balance c/d 109 700 72 800
128 500 86 000 43 000 128 500 86 000 43 000
Balance b/d 109 700 72 800Prepare the partnership balance sheet at 1 June 2014 after the retirement of Pritchard. [10 marks]Bradshaw and Lloyd
Statement of Financial Position as at 1 June 2014
£ £
Non-Current Assets 200 000Current Assets
Inventory 24 150
Trade Receivables 16 440
40 590Current Liabilities
Trade Payables 18 200
Bank Overdraft 10 225
28 425Net Current Assets 12 165Non-Current Liabilities 10 000
Net Assets 202 165Capital Accounts
Bradshaw 109 700
Lloyd 72 800
182 500Current Accounts
Bradshaw 12 105
Lloyd 8 060
20 165
202 165
June 2014 Question 2
Workings:
Sales = 96 520 + 900 + 18 000 + 8 980 = 124 400 + 100 increase in cash @ handGross Profit Margin = 25%
25% of Sales are Gross Profit, 75% are Cost of Sales = 93 375
Gross Profit = 31 125Purchases Control Account
Payments to T/P 90 525 Balance b/d 7 700
Balance c/d 5 600 Purchases 88 425
96 125 96 125
Balance b/d 5 60088 425 + 8 980 = 97 405Closing Inventory
9 400 + (3 800 x 0.75 = 2850) - 3 750 = 8 500Toyosi
Income Statement for the year ended 31 March 2014
£ £
Revenue 124 500
Opening Inventory 4 470
Purchases 97 405
Closing Inventory (8 500)
Cost of Sales 93 375
Gross Profit 31 125
Profit on disposal 260
31 385
Less expenses:
Fixtures and Fittings Depreciation 3 774
Delivery Van Depreciation 3 436
Wages 14 560
Insurance 6 540
Telephone 900
29 210
Profit for the year 2 175
June 2014 Question 3
Prepare an extract of the statement of cash flows for the year ending 31 May 2015 to show all the transactions relating to the rights issue in option 1, in accordance with IAS7. [8 marks]
Workings
Shares will increase by 40%
Nominal value = 25p each
Currently 800 000 shares
800 000 x 1.4 = 1 120 000 shares after rights issue
25p x 320 000 shares = £80 000
20p x 320 000 shares = £64 000
Total inflows = £144 000Dividends paid = 12p x 1 120 000 shares = £134 400 £ £
Cash Flows from Financing Activities
Proceeds from rights issue at premium 144 000
Dividends paid (134 400)
Net cash from Financing Activities 9 600Prepare an extract of the statement of cash flows for the year ending 31 May 2015 to show all the transactions relating to the debenture loan issue in option 2, in accordance with IAS7. [7 marks]
Workings
Debenture value = £144 000
Interest = 5% of 144 000 = 7 200 £ £
Cash Flows from Operating Activities
Cash used in operations
Interest Paid (7 200)Cash Flows from Financing Activities
Proceeds from long term borrowings 144 000Discuss the appropriateness of both sources of finance to fund the proposed expansion. Recommend the best option and justify your choice. [12 marks]
June 2013 Question 1
Prepare the partnership capital accounts for Jack, Henry and Len at 1 May 2013 after items (1) to (4) have been implemented. (9 marks)Goodwill Account
Goodwill created: Goodwill written off
J 12 000 J 20 250
H 9 000 H 6 750
L 6 000
27 000 27 000Revaluation Account
Inventory 5 500 Non-Current Assets 19 000
J 6 000
H 4 500
L 3 000
19 000 19 000Capital Account
J H L J H L
Goodwill w/o 20 250 6 750 Balance b/d 102 000 84 000 36 000
Current Account 5 774 Goodwill 12 000 9 000 6 000
Loan Account 39 226 Revaluation 6 000 4 500 3 000
Balance c/d 99 750 90 750
120 000 97 500 45 000 120 000 97 500 45 000
Balance b/d 99 750 90 750
June 2013 Question 2
IAS 1 = Presentation of Financial Statements
IAS 2 = Inventories
IAS 7 = Statement of Cash Flows
IAS 8 = Accounting Policies, Changes in Accounting Estimates & Errors
IAS 10 = Events after the reporting period
IAS 16 = Property, Plant & Equipment
IAS 18 = Revenue
IAS 36 = Impairment of Assets
IAS 37 = Provisions, Contingent Liabilities & Contingent Assets
IAS 38 = Intangible Assets(1) IAS 37 = Provisions, Contingent Liabilities & Contingent Assets
(2) IAS 2 = Inventories
(3) IAS 36 = Impairment of Assets(1) Include in provision in financial statements
(2) Reduce the value of the inventory at the lower of cost and net realisable value
(3) Carrying amount is 42 500 which is higher than the fair value and the estimated value in use. Reduce the carrying amount to the higher of fair value and estimated value in use.
June 2013 Question 3
Sales Control Account
Balance b/d 19 670 Receipts from T/R 158 600
Sales 153 400 Balance c/d 14 470
173 070 173 070
Balance b/d 14 470153 400 x 0.6 = 95 875 = Cost of Sales95 875 + 6 365 + 3 000 - 11 990 = 93 250 PurchasesPurchases Control Account
Payments to T/P 86 300 Balance b/d 6 750
Balance c/d 13 700 Purchases 93 250
100 000 100 000
Balance b/d 13 700Insurance Prepaid Account
Balance b/d 920 Income Statement 3 520
Bank 3 700 Balance c/d 1 100
4 620 4 620
Balance b/d 1 100Wages Accrued Account
Bank 35 000 Balance b/d 2 800
Balance c/d 2 520 Income Statement 34 720
37 520 37 520
Balance b/d 2 520Rent Prepayment = 2 500
Insurance Prepayment = 1 100
Wages Accrued = 2 520Non-Current Asset, Cost = 13 800 + 600(loss) = 14 400
95 800 - 14 400 = 81 400
81 400 x 0.2 = 16 280 Depreciation chargeEve Huffer
Statement of Financial Position as at 31 March 2013
£ £
Non-Current Assets 65 120Current Assets
Inventory 6 365
Trade Receivables 14 470
Prepayments 3 600
Bank 7 322
31 757
Current Liabilities
Trade Payables 13 700
Accruals 2 520
16 220Net Current Assets 15 537
Net Assets 80 657Capital
Opening Capital 116 392
Loss for the year (15 235)
101 157
Less Drawings 20 500
80 657
June 2013 Question 4
Schedule of Non-Current Assets - Property, Plant and Equipment
L & B M V F F
£ £ £
Cost
at 30 April 2012 187 500 112 500 50 000
Additions 24 950 5 200
Disposals (32 800)
Revaluation 72 500
At 30 April 2013 260 000 104 650 55 200Depreciation
at 30 April 2012 56 250 49 200 13 500
Charge for the year 10 400 17 450 8 280
Eliminated on Disposal (0) (14 250) (0)
Eliminated on Revaluation (56 250) (0) (0)
At 30 April 2013 10 400 52 400 21 780Net book value at 30 April 2013 250 000 52 250 33 420
Net book value at 30 April 2012 131 250 63 300 36 500
January 2013 Question 1
Calculate the value of closing inventory at 31 October 2012. (7 marks)
£
Closing Inventory at 12 Nov 2012 31 300
Purchases Returns 3 100
Purchases (39 500)
Sales (121 440 x 5/6) 101 200
Sales Returns (1 860 x 5/6) (1 550)
Closing Inventory at 31 October 2012 94 550Calculate the gross profit for the period from 1 to 12 November 2012 using the AVCO method. (3 marks)
FIFO Gross Profit = 9 240
Closing inventory is 200 lower with AVCOGross Profit with AVCO will be £9 040Explain two reasons why the directors should not change from the FIFO method to the AVCO method. (4 marks)
January 2013 Question 2
Workings
Disposal
240 000 - 188 250 = 51 750 Loss on dissolution
51 750 / 9 = 5 750
4 : 3 : 2
4(5 750) : 3(5 750) : 2(5 750)
23 000 : 17 250 : 11 5004 850 -> 60% E
-> 40% SCapital Accounts
E S V E S V
Dissolution 23 000 17 250 11 500 Balance b/d 105 000 70 000 25 000
Current Acc 18 350 Current Acc 23 600 15 425
Voeckler 2 910 1 940 Capital 4 850
Cash 102 690 66 235
128 600 85 425 29 850 128 600 85 425 29 850
January 2013 Question 3
Workings
Non-current assets
Balance b/d 247 800 Depreciation 26 150
Revaluation 17 500 Disposal 14 500
Purchase of NCA 38 250 Balance c/d 262 900
303 550 303 550Interest Paid
60 000 x 0.06 = 3 600
25 000 x 0.06 x 0.25 = 1 500 x 0.25 = 375
Total Interest Paid = 3 975Ordinary shares
Share capital increased by £24 000
24 000 / 1.5 = 16 000 more shares
Total shares = 144 000 / 1.5 = 96 000 sharesTotal raised from issue of shares = 24 000 + 6 000(share premium) = 30 000Share capital @ 30 September 2011 = 120 000 / 1.5 = 80 000 shares
7.5p x 80 000 shares = 600 000p
600 000 / 100 = £6 000 dividendsStatement of cash flows for Merckx and Indurain Ltd
For the year ended 30 September 2012
£ £
Cash flows used in operating activities (31 225)
Interest Paid (3 975)
Taxation Paid (6 500)
Net cash used in operating activities (41 700)
Investing activities
Purchase of Non-Current Assets (38 250)
Sale of Non-Current Assets 18 125
Cash used in Investing Activities (20 125)
Financing Activities
Issue of ordinary shares at premium 30 000
Dividends Paid (6 000)
Proceeds from long term borrowings 25 000
Cash from Financing Activities 49 000
Net decrease in cash flows (12 825)
Cash and cash equivalents at start of year (15 600)
Cash and cash equivalents at end of year (28 425)
January 2013 Question 4
Sales Control Account
Balance b/d 3 430 Receipts from T/R 51 570
Sales 52 200 Balance c/d 4 060
55 630 55 630Purchases Control Account
Payments to T/P 37 685 Balance b/d 2 575
Balance c/d 1 685 Purchases 36 795
39 370 39 370
Balance b/d 1 685Revenue = 52 2006 160 + 36 795 - 2 540 = 40 415 (Cost of sales - Goods for own use)
52 200 x 0.75 = 39 150 (Cost of sales + Goods for own use)
40 415 - 39 150 = 1 265 (Goods for own use)36 795 - 1 265 = 35 530 (Purchases)Alberto
Income Statement for the year ended 30 November 2012
£ £
Revenue 52 200
Opening Inventory 6 160
Purchases 35 530
Closing Inventory (2 540)
Cost of Sales 39 150
Gross Profit 13 050Alberto
Statement of Affairs as at 30 November 2012
£ £
Assets
Inventory 2 540
Fixtures 3 870
Vehicles 18 900
Trade Receivables 4 060
Insurance Prepayment 760
Cash 895
31 025Liabilities
Bank overdraft 4 140
Telephone accrued 870
Trade Payables 1 685
(6 695)Statement of Affairs as at 30 November 2011
£ £
Assets
Inventory 6 160
Fixtures 4 835
Vehicles 26 715
Trade Receivables 3 430
Insurance Prepayment 610
Cash 440
42 190Liabilities
Bank overdraft 4 245
Telephone accrued 695
Trade Payables 2 575
(7 515)Opening Capital 34 675
Add Profit for the year 5 920
40 595
Less Drawings (16 265)
Closing Capital 24 330Recommend to Alberto whether or not he should introduce a double entry bookkeeping system of accounting records. Justify your decision. (16 marks) (includes 2 marks for quality of written communication)Advantages
1) Less errors (1) due to each transaction having a Dr and a Cr entry (1)
2) Verify accuracy (1) with trial balances (1) and control accounts (1)
3) Reduce accountant fees (1) if they are able to prepare the accounting records (1)
4) To aid in decision making (1) ad potentially lead to improved business performance (1)
5) Reduces the chances of fraud (1) such as stolen cash (1)
6) Supports a loan application (1) by showing business liquidity/cash flow (1)Drawbacks
1) Doesn't reveal all errors (1) for example, error of commision (1)
2) Time consuming (1) which leaves less time to run business (1)Conclusion, I would use double entry bookkeeping (1)
