Book-keeping

Level 1

Model Answers
Series 2 2006 (Code 1606) Malaysia

1 ASE 1006 2 06 3

1606/2/06 >f0t@W9W2`Bp5eBk0j8[#
Book- Keeping Level 1 Malaysia
Series 2 2006

How to use this booklet

Model Answers have been developed by Education Development International plc (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
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Education Development International plc 2005

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1606/2/06/MA 2
QUESTION 1

The following list of balances was extracted from Angelas books at 31 March 2006.

RM
Angelas Capital account at 1 April 2005 20,597
Drawings 9,842
Sales 157,325
Returns inwards 234
Provision for depreciation:
Vehicles 6,200
Premises 720
Trade debtors 26,549
Overhead expenses 55,428
Purchases 72,612
Returns outwards 438
Carriage inwards 338
Creditors 12,850
Stock at 1 April 2005 6,000
Cash 250
Long term loan 10,000
Vehicles at cost 15,500
Premises at cost 24,000
Bank ?

REQUIRED

(a) Prepare Angelas trial balance at 31 March 2006 to calculate the bank balance
(22 marks)

(b) Copy the following list into your answer book and state the classification of each account
as real, personal or nominal. Only one classification will apply to each account:

(i) Premises at cost account

(ii) Overhead expenses account

(iii) Carriage inwards account

(iv) A creditors account

(v) Cash account

(vi) Drawings account

(3 marks)

(Total 25 marks)

1606/2/06/MA 3
 MODEL ANSWER TO QUESTION 1

Angela Trial balance at 31 march 2006

(a) Debit Credit
RM RM
Angelas Capital account at 1 April 2005 20,597
Drawings 9,842
Sales 157,325
Returns outwards 438
Provision for depreciation - Vehicles 6,200
Provision for depreciation - Premises 720
Trade debtors 26,549
Overhead expenses 55,428
Purchases 72,612
Returns inwards 234
Carriage inwards 338
Creditors 12,850
Stock at 1 April 2005 6,000
Cash 250
Long term loan 10,000
Vehicles at cost 15,500
Premises at cost 24,000
Bank balance (overdraft) 2,623
210,753 210,753

1606/2/06/MA 4 CONTINUED ON NEXT PAGE

MODEL ANSWER TO QUESTION 1 CONTINUED

(b)
Premises at cost account Real
Overhead expenses account Nominal
Carriage inwards account Nominal
A creditors account Personal
Cash account Real
Drawings account Personal

1606/2/06/MA 5 OVER
QUESTION 2

Laura keeps her petty cash book on the imprest system, she balances her books monthly and makes
up the balance to RM 200.00 on the first day of each month. On 31 January 2006 petty cash in hand
was RM68.35.

The petty cash book has 3 analysis columns Postage and stationery expenses, Travelling
expenses and Office expenses.

The following transactions were dealt with by the petty cashier:

RM

February 1 Restored imprest

3 Paid for stationery 15.25
5 Paid for petrol 25.07
7 Paid for postage stamps 3.25
10 Paid for coffee 16.49
17 Paid for train ticket 30.00
20 Paid for sugar 2.50
28 Paid for petrol 22.77

March 1 Restored imprest

5 Paid for postage stamps 5.80
7 Paid for tea 4.70
11 Paid for cleaning materials 2.50
15 Paid for train ticket 18.50
18 Received from sale of postage stamps 1.95
26 Paid for stationery 24.30
30 Paid for petrol 24.86

On 1 April Laura reduced the imprest to RM 150.

REQUIRED:

(a) Write up the petty cash book for the two month period. It should be balanced at the end of each
month and the imprest restored on the first day of the following month.
(18 marks)

(b) Prepare the following ledger accounts for both months:

(i) Postage and stationery expenses

(ii) Travelling expenses
(iii) Office expenses
(7 marks)

(Total 25 marks)

1606/2/06/MA 6 OVER
MODEL ANSWER TO QUESTION 2

(a) Laura - Petty cash book

Receipts Payments
Total Postage & Travelling Office
Stationery Expenses Expenses
2006 RM RM RM RM RM
February 1 68.35 Balance b/f
131.65 Bank

3 Stationery 15.25 15.25

5 Petrol 25.07 25.07
7 Stamps 3.25 3.25
10 Coffee 16.49 16.49
17 Train ticket 30.00 30.00
20 Sugar 2.50 2.50
28 Petrol 22.77 22.77
115.33 18.50 77.84 18.99
28 Balance c/d 84.67
200.00 200.00
March 1 84.67 Balance b/d
115.33 Bank

5 Stamps 5.80 5.80

7 Tea 4.70 4.70
Cleaning
11 materials 2.50 2.50
15 Train ticket 18.50 18.50
18 1.95 Sale of stamps
26 Stationery 24.30 24.30
30 Petrol 24.86 24.86
80.66 30.10 43.36 7.20
31 Balance c/d 121.29
201.95 201.95
April 1 121.29 Balance b/d
28.71 Bank

1606/2/06/MA 7 CONTINUED ON NEXT PAGE

MODEL ANSWER TO QUESTION 2 CONTINUED

(b) Postage & stationery

2006 RM 2006 RM
February 28 PCB 18.50
March 31 PCB 30.10
March 31 PCB 1.95

Travelling expenses
2006 RM
February 28 PCB 77.84
March 31 PCB 43.36

Office expenses
2006 RM
February 28 PCB 18.99
March 31 PCB 7.20

1606/2/06/MA 8
QUESTION 3

Andrew is a wholesaler who records invoices in day books. The following transactions occurred
during January 2006:

Purchases: Invoice No List Price - RM Trade

Discount %
January 11 Bill 726 240 60
12 Charles 727 650 50
15 Ella 728 420 40
23 Bill 729 360 60
28 Ella 730 500 40
30 Ella 731 280 40

Sales: Invoice No List price RM Trade

Discount %
January 9 Jack 853 120 25
16 Kelly 854 150 20
19 Mona 855 190 10
23 Kelly 856 100 20

(1) Bill allows a cash discount of 5% on items paid within 14 days of invoice
(2) Ella allows a cash discount of 2% on items paid within 7 days of invoice date
(3) Charles allows no cash discount

Payments:
January 24 Payment was made to clear Bills account
25 Payment was made to Ella for invoice 728
29 Payment was made to Ella for invoice 730

REQUIRED

For Andrews business

(a) (i) the Purchase day book (6 marks)

(ii) the Sales day book (4 marks)

(iii) the Cash book (7 marks)

(b) The ledger accounts for:

(i) Ella (4 marks)

(ii) Sales (1 mark)

(iii) Purchases (1 mark)

(iv) Discount received (2 marks)

(Total 25 marks)

1606/2/06/MA 9
MODEL ANSWER TO QUESTION 3

(a)
(i) Purchase Day Book
RM
Jan 11 Bill 96
12 Charles 325
15 Ella 252
23 Bill 144
28 Ella 300
30 Ella 168
1285

Sales Day Book

(ii) RM
Jan 9 Jack 90
16 Kelly 120
19 Mona 171
23 Kelly 80
461

Cash Book
(iii) Discount Bank
RM RM
Jan 24 Bill 12 228
25 Ella 252
29 Ella 6 294
18

(b)

Ella Account
(i) RM RM
Jan 15 Purchases 252
Jan 25 Bank/Cash 252
28 Purchases 300
29 Bank/Cash 294
Discount
received 6
30 Purchases 168
31 Balance c/d 168
720 720
Feb 1 Balance b/d 168

Sales Account
(ii) RM
Jan 31 Sundries 461

1606/2/06/MA 10 CONTINUED ON NEXT PAGE

MODEL ANSWER TO QUESTION 3 CONTINUED

Purchases Account
(iii) RM
Jan 31 Sundries 1285

Discount Received Account

(iv) RM
Jan 31 Sundries 18

1606/2/06/MA 11 Education Development International plc 2006

QUESTION 4

James, a sole trader, has produced his own financial statements for the year ended 31 March 2006.
James attempt at a balance sheet is shown below:

Assets RM RM
Stock at 31 March 2006 4,200
Creditors 3,600
Cash 150
Drawings 4,000
Equipment (cost) 2,000
Vehicles (cost) 10,000
Accruals 125
Bank overdraft 1,075
Provision for doubtful debts 300
Net profit for the year 12,300 37,750
Liabilities
Debtors 6,500
Prepayments 250
Provision for depreciation of equipment 1,200
Provision for depreciation of vehicles 5,000 12,950
Net assets 24,800

Capital at 1 April 2005 3,500

Additional information:

(1) No depreciation has been charged for the year. Calculations, in line with previous years, should
have been:

Equipment 20% using the straight line method

Vehicles 30% using the reducing balance method

No fixed assets were purchased or sold during the year ended 31 March 2006.

(2) A debt of RM200 should be written off, but the provision for doubtful debts should remain at
RM300.

(3) An item of stock valued at RM500 (included in the RM4,200) is damaged and its value should be
reduced to RM150.

The profit of RM12,300 must be amended to take account of the 3 notes above.

REQUIRED

Prepare a revised Balance Sheet at 31 March 2006, in good form, for James business.

(Total 25 marks)

1606/2/06/MA 12 Education Development International plc 2006

MODEL ANSWER TO QUESTION 4

James Balance Sheet at 31 March 2006

Fixed Assets Cost Depreciation NBV

RM RM RM
Equipment 2,000 1,600 400
Vehicles 10,000 6,500 3,500
12,000 8,100 3,900
Current Assets
Stock 3,850
Debtors 6,300
Less provision for doubtful debts 300 6,000
Prepayments 250
Cash 150
10,250
Current Liabilities
Bank overdraft 1,075
Creditors 3,600
Accruals 125
4,800 5,450
Net Assets 9,350

Capital 1 April 2005 3,500

Add net profit 9,850
13,350
Less drawings 4,000
9,350

1606/2/06/MA 13 Education Development International plc 2006