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Model Answers
Series 4 2013 (ASE2007)
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Model Answers
Teachers and candidates should find this booklet an invaluable teaching tool and an aid to success.
Pearson 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.
Pearson accepts that candidates may offer other answers that could be equally valid.
Key:
of = own figure
Question 1
Syllabus Topic 2.6: Dissolution of partnership (2.6.1), (2.6.2), (2.6.4), (2.6.8), (2.6.10)
(a)
Goodwill Account
Capital Accounts:
Wen
7,500
Yi
3,750
Realisation
11,250
__ ___
11,250
11,250
(3 marks)
(b)
Realisation Account
11,250
Goodwill
Premises
70,000
Motor Vehicles
Creditors
4,400
Capital: Wen
4,000
1 for all
8,000
Yi
Equipment
23,450
Chen plc
Stock
21,075
Debtors
5,475
4,000
115,000
1
1 both
1
Capital Accounts:
7,900
1of
3,950
139,250
1of
Wen
______
139,250
Yi
(8 marks)
(c)
Capital Accounts
Wen
Yi
Wen
Yi
75,000
43,750
1 both
1 both
3,425
1 both
Balances b/d
4,000
4,000
1 both
Current Account
5,050
70,000
35,000
1 both
Goodwill
7,500
3,750
Realisation
7,900
3,950
1of both
Bank
5,650
1,125
1of both
_____
_____
87,550
47,500
87,550
47,500
(7 marks)
Current Account
Realisation/Vehicles
Chen Plc
2007/4/13A/MS
Page 1 of 8
Question 1 continued
(d)
Bank Account
Chen plc
10,000
3,225
Wen
5,650
1of
Yi
1,125
1of
Balance b/d
Capital Accounts:
10,000
10,000
(4 marks)
(e)
Realisation
115,000
115,000
Bank
Capital Account: Wen
Yi
115,000
10,000
70,000
35,000
1
1of for both
115,000
(3 marks)
(Total 25 marks)
2007/4/13A/MS
Page 2 of 8
Question 2
Syllabus Topic 7: Non-trading organisations (7.2.3), (7.3), (7.4.2 7.4.4), (7.4.10), (7.5)
(a)
56,000
11,800
2,105
1,105
140
71,150 1
125
310
(435) 1
70,715 1+1of
(4 marks)
(b)
(i)
Subscriptions Account
Balance b/d
Income and Expenditure a/c
Balance c/d
Balance b/d
1,105
29,190 1of
150
30,445
905
Balance b/d
Bank
Bad debts
Balance c/d
Balance b/d
125
29,345 1
70 [W1] 1
905
30,445
150
(3 marks)
W1 1105 - 1035 = 70
(b)
(ii)
Abacus Tennis Club
Refreshments Trading Account for the year ended 31 December 2012
Sales
4,550
Less: Cost of sales
Opening stock
140
1
1
2,490
Add:Purchases (2,600 310 + 200)
2,630
Less:Closing stock
( 270)
(2,360)
Gross profit
2,190
Wages
(2,000) 1
Net profit
190 1of
(4 marks)
2007/4/13A/MS
Page 3 of 8
Question 2 continued
(b)
(iii)
Abacus Tennis Club
Income and Expenditure Account for the year ended 31 December 2012
29,190 1of
4,090
305
190 1of
33,775
Subscriptions
Tennis court hire fees
Equipment hire Receivable
Profit on sale of refreshments
Wages and salaries (18,050 2,000)
Insurance
Maintenance
Bad debts
General expenses
Depreciation Equipment ((11,800 + 9,050) x 0.20)
16,050
1,825
4,050
70
715
4,170
1of
(26,880)
6,895 1of
Surplus
(6 marks)
(c)
Balance Sheet at 31 December 2012
Fixed Assets
Land and buildings
Equipment (11,800 + 9,050 4,170)
56,000
16,680 1
72,680
Current Assets
Stock
Subscriptions in arrears
Bank and cash
270
905
4,605
5,780
1
1
200 1
150 1
(350)
5,430
78,110
70,715 1of
6,895 1of
500 1
78,110
(8 marks)
(Total 25 marks)
2007/4/13A/MS
Page 4 of 8
Question 3
Syllabus Topic 9: Suspense Accounts (9.7), (9.8), (9.9)
(a)
Journal entries
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Dr
39
General expenses
Suspense
Motor vehicle
Motor vehicle expenses
Cr
39
1
1
12,500
1
1
18
1
1
5,700
1
1
275
275
1
1
1
20
20
1
1
1
185
1
1
90
1
1
12,500
Suspense
Rent Payable
18
Purchases
Bank
5,700
Suspense
Po Wa Li
Lai Wo Lo
550
Suspense
Discount received
Discount allowed
40
90
(18 marks)
(b)
Suspense Account
Rent Payable
Po Wa Li
Lai Wo Lo
Discount allowed
Discount received
1
1 both
1 both
18
275
275
20
20
608
1of
1
1
1
294
39
185
90
608
(7 marks)
(Total 25 marks)
2007/4/13A/MS
Page 5 of 8
Question 4
Syllabus Topic 8: Control accounts (8.6), (8.7), (8.8), (8.9) and (8.1)
(a)
(i)
2012
July 01
July 31
Aug 01
Balance b/d
Returns outwards
Bank
Contra
Discount received
Balance c/d
Balance b/d
2,458
6,499
290,440
13,825
8,728
112,487
434,437
4,535
2012
1
1
1
1
1
1
July 01
July 31
Aug 01
Balance b/d
Purchases
Balance c/d
112,129
317,773
4,535
1
1
Balance b/d
___ ___
434,437
112,487
1 of
(9 marks)
(ii)
2012
July 01
July 31
Aug 01
Balance b/d
Carriage
Interest
Sales
Bank: Dishonoured
cheques
Balance c/d
Balance b/d
2012
197,326
15,805
2,467
598,804
12,877
1
1
1
1
11,693
______
838,972
130,419
1 of
July 01
July 31
Aug 01
Balance b/d
Contra
Returns inwards
Bad debts
Discount allowed
6,580
13,825
9,721
4,840
17,647
Bank
Sung allowance
Balance c/d
652,690
3,250
130,419
_ _____
838,972
11,693
Balance b/d
1
1
1
1
1
1
1
(14 marks)
(b)
Fixed assets
Accumulated depreciation for fixed assets
Stock
Petty cash
Bank
Wages
General/Nominal ledger
(2 marks)
(Total 25 marks)
2007/4/13A/MS
Page 6 of 8
Question 5
Syllabus Topic 1: Advanced aspects of the syllabus for Level 1 Book-keeping (1.4.2), (1.4.3),
(1.4.5), (1.4.6)
(a)
(i)
2012 - 2013
Mar 31 Debtors
1,500
2012
Mar 31
P&L
1,500
2,300
2013
Mar 31
P&L
2,300
(4 marks)
(ii)
Balance c/d
(44,400 x 4%)
1,776
____
1,776
2013
Mar 31
P&L
Balance cld
(40,150 x 4%)
1of
1
170
1,606
1,776
2011
Apr 01
2012
Mar 31
Balance b/d
1,215
P&L
1of
561
1,776
2012
Apr 01
Balance b/d
1of
1,776
__ __
1,776
2013
Apr 01
Balance b/d
1of
1,606
(7 marks)
(b)
Wai Hui
Balance Sheet extract at 31 March 2013
Current assets 1
Debtors
Less provision for doubtful debts
1 both
40,150
(1,606)
38,544
1of
1of
(4 marks)
(c)
(i)
Bad debts are debts that have proved to be irrecoverable (1) and are therefore written off as
an expense in the P & L Account. (1)
(2 marks)
(ii)
Provision for doubtful debts are debts that are estimated on the debt uncertain to be paid
(1) and are therefore deducted from the debtors on the Balance Sheet. (1)
(2 marks)
2007/4/13A/MS
Page 7 of 8
Question 5 continued
(d)
Journal
Lee
Bad debts recovered
Dr
500
Cash/Bank
Lee
500
500
Cr
500
1
1
500
1
1
500
1
1
(6 marks)
(Total 25 marks)
2007/4/13A/MS
Page 8 of 8
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