ECR - FRA

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:32AM in AAT student discussion
Hi guys,

I am very anxious for the result day & can’t get peace till I know the correct answers.
I sat for both ECR & FRA exams working full time, doing my intermediate in six months and studying home study course. So you can understand no one is there to ask for what is correct answer.
I am trying to memorise journals for part 2 in FRA and writing the answers as well. Could you please give me some feedback on this?
(a) Dr- Prepayment £900, Cr- Rent £900
(b) or (c) Provision for doubtful debt is 4% of debtors, so it came as £119 & it is given in the TB as £150, so I debited Provision for doubtful debt with £31 & credited Adj of P F D D with £31 (which is added with gross profit).
© or (b) Loan interest is 7.2% of £2500, it came as £180 but already £165 is given so I debited loan interest with £15 and credited accruals with £15.
(d) I reduced the stock by £138 (£4238 - £138 = £4100)
(e) Dr- disposal £500, Cr- Equip cost £500
Dr- Acc depre £300, Cr- disposal £300 (£500x20% = £100 each for ’03, ’04, ’05)
Dr – Sales £275, Cr – disposal £275
So my Disposal came as £75 (profit, which is added with the gross profit)
I didn’t adjust depreciation expense so it remained as £900.

For ECR I have made a stupid mistake, (MOS question) I didn’t multiply by 100 so my % came as -0.2%, 0%, & 0.2%. My significances were based on my % not on -20%, 0%, & 20%.Will I fail for not multiplying and for giving wrong significances?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    Hi

    i got pretty much same as you on FRA, I didnt spot the £165 was already there for the year I just missed that so charged £180. don't think she will get me too much for that though.

    My dep'n charge was £100 less than you as I depreciated only two years. As I think it said no dep'n is year of disposal.Therefore I got a loss of £25

    Can anyone remember when it was bought? I took the dep'n that was disposed of away from accum dep'n .

    Seems like a lot of us got similar figures.

    sitting ECR in the summer.
    U sure are goign all out on your studies at mo!
    cheers



  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    I remember. it was bought year ended Sept 03 so:

    Acc Dep NRV
    Sept 03- 100 400
    Sept 04- 200 300
    Sept 05- 300 200

    No depreciation for year of disposal, but a FULL YEAR in year of acquisition, so i got a profit on disposal
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    On the disposal i make it a loss of £25. I also deducted the scrap of £138 from stock. The MOS was something like -20% 0% +25%

    Maybe i got it right? i can only hope! Although i couldnt get the AC Cars TB to balance.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    I had £75 profit on disposal but my mind just went blank so i couldn't think how to record it in journal. can anyone tell?
    all the rest for FRA i had exact the same as you M'06-'07.

    Can I also ask everyone, what did you write as an answer to the task 4 on ECR , when it asked to give 3 factors that have to be taken into account when calculating cost per unit if production and sales were to increase to 10000???
    i couldn't think of anything else but that more indirect labout and fixed overheads will need to be added to cope with big increase in production level.
    Thanks.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    Also had the same problem here, i mentioned about fixed costs being spread out more and then Variable costs increasing with higher production. Then i could not work out a 3rd so mentioned demand restraints.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    yeah i couldn't think of third as well, i had a thought about demand but it said that level of production ans sales were to increase to 10,000 units,so i thought its assumed that they wiil sell it. but i wish i'd written it down now.:)
    Do you think this question(actually it was a part of question) would be worth many points??
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    That i would have no idea, yes demand may not be relevant. To make it more relevant i suggested holding higher stock levels would increase the costs for "keeping hold of stock" never know might gain me some marks :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA
    anastasia270683 wrote:
    I had £75 profit on disposal but my mind just went blank so i couldn't think how to record it in journal. can anyone tell?
    all the rest for FRA i had exact the same as you M'06-'07.

    Not sure if theres more than one way of doing it?

    But the official way was to move the asset into the disposal account, also the prov for depn. AND move the amount there that had incorrectly been put into sales. The three amounts would leave a balance of £75, profit on disposal.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:ECR - FRA

    I too mentioned indirect labour and other fixed overheads as well as the selling price although i am not sure that the latter factor is correct. Couldn't think of any other!
    I am confident 4 ECR but 50/50 for FRA. If the most marks are allocated 2 the Ace cars ETB and emphasis put on the profit n all then...i can't imagine what's gonna happen!! I am worried! :(

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