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LCCI International Qualifications

Book-keeping
Level 1

Model Answers
Series 4 2009 (1017)

For further Tel. +44 (0) 8707 202909


information Email. enquiries@ediplc.com
contact us: www.lcci.org.uk
Book- Keeping Level 1
Series 4 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

All rights reserved; no part of this publication may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise
without prior written permission of the Publisher. The book may not be lent, resold, hired out or
otherwise disposed of by way of trade in any form of binding or cover, other than that in which it is
published, without the prior consent of the Publisher.

Page 1 of 11
QUESTION 1

Jason Booth extracted the following list of balances from his books at 31 March 2009:

£
Bad debts 1,800
Drawings 17,700
4% loan 36,000
Sales 325,500
Purchases 235,800
Discounts allowed 7,800
Wages 21,000
Discounts received 10,200
Creditors 80,400
Debtors 157,200
Bank – overdrawn 15,600
Cash 4,800
Stock at 1 April 2008 71,200
Insurance 4,600
Rent 15,000
Fixtures and fittings 22,000
Returns outwards 2,800
Capital ?

REQUIRED

(a) Prepare the Trial Balance at 31 March 2009.


(19 marks)

(b) State the six types of error which do not affect the agreement of the Trial Balance.
(6 marks)

(Total 25 marks)

1017/4/09/MA Page 2 of 11
MODEL ANSWER TO QUESTION 1

(a)

Trial Balance at 31 March 2009


Dr Cr
£ £
Bad debts 1,800
Drawings 17,700
4% loan 36,000
Sales 325,500
Purchases 235,800
Discount allowed 7,800
Wages 21,000
Discount received 10,200
Creditors 80,400
Debtors 157,200
Bank 15,600
Cash 4,800
Stock at 1 April 2008 71,200
Insurance 4,600
Rent 15,000
Fixtures and fittings 22,000
Returns outwards 2,800
Capital ……….. 88,400
558,900 558,900

(b)

Omission
Commission
Original Entry
Compensating
Reversal
Principle

1017/4/09/MA Page 3 of 11
QUESTION 2

Trudy Purcell maintains a Petty Cash Book on the imprest system, the imprest being £200.

On Monday 1 June 2009 the balance of petty cash was £23.40. The imprest is restored each Monday
at the start of business.

The following payments were made:

2009 Details £
June 2 Creditor – K Cole 25.60
June 2 Stationery 28.90
June 3 Postage 12.60
June 3 Cleaning 35.80
June 4 Stationery 12.36
June 5 Postage 13.24
June 5 Creditor – M Lee 18.39

The last Petty Cash Book voucher to be used on 29 May 2009 was number 1037.

The analysis columns used are:

Stationery
Postage
Cleaning
Ledger

REQUIRED

(a) (i) Prepare the Petty Cash Book for the week ended Friday 5 June 2009

(ii) Balance the Petty Cash and bring the balance down to the week commencing
Monday 8 June 2009.

(Remove and use the sheet(s) on page 7 to present your answer)


(15 marks)

Dan Bosworth purchased a machine at a cost of £10,200 from Green Equipment on 1 April 2007. He
paid a deposit of £1,100 by cheque and agreed to pay the balance on 1 May 2007.

The machine is expected to have a useful life of four years and disposal value of £600. Equal
amounts of depreciation will be charged each year.

REQUIRED

Prepare for the financial years ended 31 March 2008 and 2009 the:

(b) Machinery Account


(4 marks)

(c) Provision for Depreciation on Machinery Account.


(6 marks)

(Total 25 marks)

1017/4/09/MA Page 4 of 11
MODEL ANSWER TO QUESTION 2

(a)
(i) and (ii)

Petty Cash Book

Receipts Date Details Voucher Payments Stationery Postage Cleaning Ledger


£ 2009 Number £ £ £ £ £
23.40 June 1 Balance b/d
176.60 June 1 Cash/Bank
June 2 K Cole 1038 25.60 25.60
June 2 Stationery 1039 28.90 28.90
June 3 Postage 1040 12.60 12.60
June 3 Cleaning 1041 35.80 35.80
June 4 Stationery 1042 12.36 12.36
June 5 Postage 1043 13.24 13.24
June 5 M Lee 1044 18.39 …….. …….. …….. 18.39
146.89 41.26 25.84 35.80 43.99
……… June 5 Balance c/d 53.11
200.00 200.00
53.11 June 8 Balance b/d
146.89 June 8 Cash/Bank

1017/4/09/MA Page 5 of 11
MODEL ANSWER TO QUESTION 2

(b)

Machinery Account
2007 £ 2008 £
April 1 Bank 1,100 March 31 Balance c/d 10,200
April 1 Green Equipment 9,100 ………
10,200 10,200
2008 2009
April 1 Balance b/d 10,200 March 31 Balance c/d 10,200
2009
April 1 Balance b/d 10,200

(c) Depreciation = 10,200 – 600 = 2,400 per annum


4

Provision for Depreciation – Machinery Account


2008 £ 2008 £
March 31 Balance c/d 2,400 March 31 Profit & Loss/Depreciation 2,400
2008
April 1 Balance b/d 2,400
2009 2009
March 31 Balance c/d 4,800 March 31 Profit & Loss/Depreciation 2,400
4,800 4,800
2009
April 1 Balance b/d 4,800

1017/4/09/MA Page 6 of 11
QUESTION 3

On 30 April 2009, the Cash Book of Amy Clark showed a balance at the bank of £2,140 (Dr). The
bank statement received on 30 April 2009 revealed the following:

(1) A cheque, £360, paid to D Ford, a creditor, was entered in the Cash Book as £630.

(2) Bank charges not recorded in the Cash Book, £57.

(3) On 12 April 2009 a cheque was received from L Bloor, a debtor, for £523. The cheque was
dishonoured on 15 April 2009. No entry for the dishonour has been made in the Cash Book.

(4) A Direct Debit payment for electricity, £213, had not been entered in the Cash Book.

(5) On 29 April a cheque for £427 received from J Marshall, a debtor, was paid into the bank. The
bank did not credit this until 2 May 2009.

(6) The following cheques had not been presented to the bank for payment:

Cheque Number Payee Amount


£
12031 M Butler 310
12034 M Swift 125
12035 S Jukes 236
12038 C Harris 149

REQUIRED

(a) Starting with the balance of £2,140 (Dr), bring the bank column of the Cash Book up to date at
30 April 2009.
(9 marks)

(b) Prepare the Bank Reconciliation Statement at 30 April 2009.


(11 marks)

On 30 January 2009, J Durrant received a cheque from D Lay for £627. This represented a debt,
which had been written off as a bad debt on 1 January 2008. J Durrant’s financial year ends on
31 March 2009.

REQUIRED

(c) Prepare Journal entries to record the recovery of the debt. Narratives are not required.

(5 marks)

(Total 25 marks)

1017/4/09/MA Page 7 of 11
MODEL ANSWER TO QUESTION 3

(a)
Cash Book (Bank Columns)
2009 £ 2009 £
April 30 Balance b/d 2,140 April 30 Bank charges 57
April 30 D Ford 270 April 30 L Bloor 523
April 30 Electricity (light and heat) 213
…….. April 30 Balance c/d 1,617
2,410 2,410
May 1 Balance b/d 1,617

(b)
Amy Clark
Bank Reconciliation Statement at 30 April 2009
£ £
Balance as per Cash Book 1,617

Add: Unpresented cheques


12031 M Butler 310
12034 M Swift 125
12035 S Jukes 236
12038 C Harris 149 820
2,437
Less: Cheques not credited
J Marshall 427
…….
Balance as per Bank Statement 2010

(c)

Dr Cr
2009 £ £
Jan 30 Bank 627
D Lay 627
D Lay 627
Bad Debts Recovered 627

1017/4/09/MA Page 8 of 11
QUESTION 4

On 1 October 2009 Benny Xu had the following Purchases Ledger Account balances:

£
P Wang 6,120
M Gao 12,400
T Hong 5,200

Credit purchases during October 2009:

Date Supplier List Price Trade Discount


£
Oct 1 C Nassif 7,400 15%
Oct 8 P Wang 5,340 10%
Oct 15 M Gao 12,600 20%
Oct 22 T Hong 22,940 25%

Returns outwards during October 2009:

Date Supplier List Price


£
Oct 14 P Wang 660
Oct 28 T Hong 2,200

REQUIRED

Prepare for October 2009 the:

(a) (i) Purchases Day Book

(ii) Returns Outwards Day Book.


(8 marks)

On 29 October Benny Xu paid cheques to his creditors in full settlement of the amounts owing on
1 October 2009. M Gao allowed a discount of 2½% and T Hong allowed a discount of 1½%.
P Wang allowed no discount on his balance.

REQUIRED

(b) Prepare the ledger accounts of P Wang, M Gao and T Hong for October 2009.

(c) Balance the ledger accounts in (b) above and bring the balances down to 1 November 2009.

(17 marks)

(Total 25 marks)

1017/4/09/MA Page 9 of 11
MODEL ANSWER TO QUESTION 4

(a)

(i)
Purchases Day Book

Date Supplier £
2009
Oct 1 C Nassif (7,400 – 1,110) 6,290
Oct 8 P Wang (5,340 – 534) 4,806
Oct 15 M Gao (12,600 –2,520) 10,080
Oct 22 T Hong (22,940 – 5,735) 17,205
38,381

(ii)
Returns Outwards Day Book

Date Supplier £
2009
Oct 14 P Wang (660 – 66) 594
Oct 28 T Hong (2,200 – 550) 1,650
2,244

(b) and (c)

P Wang account
2009 £ 2009 £
Oct 14 Returns 594 Oct 1 Balance b/d 6,120
Oct 29 Bank 6,120 Oct 8 Purchases 4,806
Oct 29 Balance c/d 4,212 ………
10,926 10,926
Nov 1 Balance b/d 4,212

M Gao account
2009 £ 2009 £
Oct 29 Bank 12,090 Oct 1 Balance b/d 12,400
Oct 29 Discount 310 Oct 15 Purchases/PDB 10,080
Oct 29 Balance c/d 10,080 ………
22,480 22,480
Nov 1 Balance b/d 10,080

T Hong account
2009 £ 2009 £
Oct 28 Returns 1,650 Oct 1 Balance b/d 5,200
Oct 29 Bank 5,122 Oct 22 Purchases/PDB 17,205
Oct 29 Discount 78
Oct 29 Balance c/d 15,555 ………
22,405 22,405
Nov 1 Balance b/d 15,555

1017/4/09/MA Page 10 of 11
For Question 2 (a) Candidate No:………………………..
Centre No:……………………………
Petty Cash Book
Receipts Date Details Voucher Total Analysis Columns
number

£ £ £ £ £ £ £

Please staple the completed sheet into your answer book


1017/4/09/MA Page 11 of 11 © Education Development International plc 2009
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UK

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Email. enquiries@ediplc.com
www.ediplc.com

© Education Development International Plc 2009.


All rights reserved. This publication in its entirety is
the copyright of Education Development
International Plc. Reproduction either in whole or
in part is forbidden without the written permission
from Education Development International Plc.