AAT Intermediate Unit 5 MFR by taoyni

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									                    AAT Intermediate Unit 5: MFR

        Revision Course Summer 2003: Answers
1.1   Dr      Purchases                               500.00
              VAT                                      87.50
              Cr    Creditors control account                    587.50

      Dr      Sales returns                            50.00
              Cr     Debtors control account                       50.00
      Dr      Sales returns                            50.00
              Cr     Debtors control account                       50.00

      Dr      Carriage inwards                         48.00
              Cr     Carriage outwards                             48.00

      Dr      Motor vehicles                         3,200.00
              Cr    Motor expenses                              3,200.00

      Dr      Bank                                   2,100.00
              Cr   Rent                                         2,100.00
      Dr      Rent                                   1,200.00
              Cr   Bank                                         1,200.00

      Dr      Sales returns                          1,000.00
              Cr     Sales                                      1,000.00

1.2   Dr      Motor expenses                          170.00
              Motor expenses                          170.00
              Cr    Suspense                                     340.00

      Dr      Suspense                                400.00
              Cr   Sales                                         400.00

      Dr      Creditors                               310.00
              Cr     Purchases                                   310.00
      Dr      Purchases                               130.00
              Cr     Creditors                                   130.00

      Dr      Suspense                                280.00
              Cr   Discounts allowed                             140.00
                   Discounts received                            140.00
                                         Suspense a/c
Sales                                      400 TB difference                            340
Discounts allowed/received                 280 Motor expenses                           340

                                               680                                      680



      Summer 2003                              1                    Andrew Harrington
                                                                 www.TeachMeNow.net
2.1

                      LEDGER BALANCES          ADJUST MENTS
                       Dr        Cr            Dr         Cr

Sales                             1,241,400
Purchases              821,300                                         1,720
Purchases Returns                        780
Salaries & Wages       181,640
Rent                    32,600                                        2,600
Debtors control        103,280
Creditors control                   66,360
Bad debts               13,300
Prov for bad debts                   6,200        1,036
Motor Vehicles         121,400
MV Prov Dep’n                       25,200                           24,280
Equipment               48,400
Equip Prov Dep’n                    12,600                            3,580
Drawings                57,000                   10,000
Cash                    14,000                                       10,000
Bank                    12,500
Lighting & Heating       4,200
Insurance                1,520
Advertising              6,940                    5,500
VAT (credit)                        16,800
Opening stock           11,320
Motor Expenses           9,360
Bank deposit a/c        40,000
Bank Interest rec’d                  1,400                             1,400
Capital                            108,020


Prepayments                                       2,600
Insurance Co                                      1,720
Depreciation                                     27,860
Closing Stock P&L                                                    10,680
Closing Stock BS                                 10,680
Prov BD Adjust                                                        1,036
Bank Int. owing                                   1,400
Accrued expenses                                                      5,500
                      1,478,760   1,478,760      60,796              60,796




      Summer 2003                    2                       Andrew Harrington
                                                          www.TeachMeNow.net
2.2   Dr      Drawings                             2,000
              Cr    Wages                                       2,000

      Dr      Creditors control                      560
              Cr     Debtors control                              560

      Dr      VAT                                    196
              Cr    Suspense                                      196

      Dr      Creditors control                    1,128
              Creditors control                    1,128
              Cr     Suspense                                   2,256

      Dr      Suspense                             3,000
              Cr    Disposals                                   3,000
      Dr      Disposals                            5,000
              Cr    Greenhouses at cost                         5,000
      Dr      Greenhouses prov. for depreciation   1,500
              Cr    Disposals                                   1,500

      For ETB see separate sheet.

3.1
                    Brass plc: Bank Reconciliation as at 1 Apr 2003

      Balance per bank statement                                320.00

      Add: receipts not yet cleared                              220.00
                                                                -----------
                                                                 540.00
      Less: cheques not yet cleared – 200111                    (195.50)
                                                                -----------
      Balance per cashbook                                       344.50
                                                                -----------




      Summer 2003                          3                        Andrew Harrington
                                                                 www.TeachMeNow.net
                                           Cashbook
Bal b/f                                  229.75 Harrison Properties STO                     540.00
                                                Bank Charges                                 24.50
Bal c/d                                  334.75

                                         564.50                                             564.50

                                                  Bal b/d                                   334.75

                    Brass plc: Bank Reconciliation as at 30 April 2003

      Balance per bank statement                                    1,190.53

      Add: receipt not yet cleared                                     821.40
                                                                    -------------
                                                                     2,011.93
      Less: cheques not yet cleared
                  200113                        234.50
                  200116                        101.08
                  200117                        345.66
                  200118                        921.00
                  200119                        744.44
                                                ---------
                                                                    (2,346.68)
                                                                    --------------
      Balance per cash book                                            (334.75) o/d
                                                                    --------------

4.1   (Summary answer)

      Sales ledger balances:

              F Mercury    320.00 + 145.70 + 115.97 – 72.85 – 300.00            208.82
              B May        198.50 + 299.63 + 262.50 – 41.71 – 175.00            543.92
              J Deacon     234.75 + 228.30 – 26.32 – 234.75                     201.98
              R Taylor     199.95 + 220.31 + 277.18 – 150.00                    547.44
                                                                             ------------
                                                                             1,502.16
                                                                             ------------

      Control a/c    953.20 + 1,549.59 – 140.88 – 684.75 – 175.00            1,502.16
                                                                             ------------




      Summer 2003                           4                           Andrew Harrington
                                                                     www.TeachMeNow.net
4.2
                              Purchases Ledger Control Account
Error (i) Purchases returns               984 Bal b/d                                        98,470
Error (v) contra                          276 Error (iv) purchases                              470
Bal c/d                                97,680
                                       98,940                                                98,940
                                              Bal b/d                                        97,680

                              Purchases Ledger Balances

      Total b/f                                                              94,220
      Error (ii) balance omitted                                               3,440
      Error (iii) payment omitted                                               (450)
      Error (iv) invoice omitted                                                 470
                                                                             ----------
      Revised total        (agreed to control account)                       97,680
                                                                             ----------

5.1
                Manufacturing Account for the Year Ended 30 April 2003

      Direct materials     (4,860 + 52,205 – 3,990)                            53,075
      Direct labour                                                            14,000
                                                                             -----------
      PRIME COST                                                               67,075

      Indirect production costs:

              Supervisors’ wages                         16,000
              Production overheads                         6,150
              Depreciation – premises                      1,600
              Depreciation – equipment                     4,800
                                                         ----------
                                                                               28,550
                                                                             -----------
                                                                               95,625
      Add opening work in progress                                               7,220
                                                                             -----------
                                                                             102,845
      Less closing work in progress                                             (8,040)
                                                                             -----------
      PRODUCTION COST OF FINISHED GOODS                                        94,805
                                                                             -----------




      Summer 2003                           5                            Andrew Harrington
                                                                      www.TeachMeNow.net
                Profit and Loss Account for the year ended 30 April 2003

      Sales         (109,224 – 9,560 + 10,770)                                    110,434

      Opening stock of finished goods                           7,130
      Production cost of finished goods                       94,805
                                                            -----------
                                                            101,935
      Less closing stock of finished goods                     (5,890)
                                                            -----------
      Cost of Goods Sold                                                            96,045
                                                                                  -----------
      GROSS PROFIT                                                                  14,389
      Less expenses:
            Administrative salaries                            8,200
            Administrative overheads                           3,980
                                                            -----------
                                                                                    12,180
                                                                                  -----------
      NET PROFIT                                                                     2,209
                                                                                  -----------

6.1
                               STATEMENT OF AFFAIRS

                                          1.6.2002                        31.5.2003

      Assets
           Motor Vehicles                            48,000                         36,000
           Equipment                                 80,000                         72,000
           Bank                                       1,800                             -
           Debtors                                   24,120                         27,300
           Stock                                     11,440                         12,360
                                                   -----------                    -----------
                                                   165,360                        147,660
      Liabilities
             Bank overdraft                   -                             2,320
             Creditors                    21,400                          23,200
             Bank loan                    22,000                          12,000
                                          ---------                       ---------
                                                     43,400                         37,520
                                                   -----------                    -----------
      Capital                                      121,960                        110,140
                                                   -----------                    -----------




      Summer 2003                              6                              Andrew Harrington
                                                                           www.TeachMeNow.net
               Opening capital                   121,960
               Capital introduced                   5,000
                                                 -----------
                                                 126,960
               Profit/Loss                                ?
                                                 -----------
                                                          ?
               Drawings                          (18,600)
                                                 -----------
               Closing capital                   110,140
                                                 -----------

      So net profit must be £1,780

6.2   Reconstruct cash account and debtors control:

                                          Cash Account
Bal b/f                                      960 Cash banked                                   280,450
Receipts from credit sales               232,890 Expenses                                       12,430
Cash sales (bal figure)                   59,870 Bal c/d                                           840
                                          293720                                               293,720
Bal b/d                                      840

                                     Debtors Control Account
Bal b/f                                   24,110 Bad debts                                       1,200
Credit sales                             231,440 Receipts (bal figure)                         232,890
                                                 Bal c/d                                        21,460
                                         255,550                                               255,550


So cash sales are £59,870, credit sales are £231,440


6.3   Reconstruct trading account:

      Sales                                                            345,200
      Opening stock                                        12,480
      Purchases (290,440 – 24,990 + 21,680)              287,130
                                                         -----------
                                                         299,610
      Expected closing stock (bal fig)                    (23,450)
                                                         -----------
      Cost of goods sold (345,200 x 100/125)                           276,160
                                                                       -----------
      Gross profit (345,200 x 25/125)                                    69,040
                                                                       -----------

      Expected stock is £23,450, actual stock is £1,228 so stock stolen is £22,222




      Summer 2003                            7                             Andrew Harrington
                                                                        www.TeachMeNow.net
7.1   Reconstruct subscriptions account:

                                   Subscriptions Account
Subs in arrears b/f (6 x £30)             180 Subs in advance b/f (10 x £30)              300
Inc & Exp a/c (230 x £30)               6,900 Bank (bal fig)                            6,960
Subs in advance c/f (8 x £30)             240 Subs in arrears c/f (2 x £30)                60
                                        7,320                                           7,320
Subs in arrears b/f                        60 Subs in advance b/f                         240



So cash banked from bar sales is £121,400 - £6,960 = £114,440.




      Summer 2003                          8                        Andrew Harrington
                                                                 www.TeachMeNow.net

								
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