# Sarah Glass/KW Enterprise practice exam

Registered Posts: 35 ? ? ?
I am a stuck on task 2.1 (e) making the adjustments in the extended trial balance.

Wainwright decides that £300 should be written off. The provision for doubtful debts should be 4% of the outstanding debtors.

Provision for doubtful debts £3,200 CR

Is the adjustment 1,220 - 300 = 920

920 x 4% = 36.80

and then reduce the provision by £36.80?? to £3,163.20

Confused :confused1:

• Registered Posts: 481
i think it should be (56550-1220-300)x4%=2201.2
prov for bad debts= 3200-2201.2=998.8, this figure should be in debit side of the adjustment for prov for bad debts.
i may be wrong
• Registered Posts: 35 ? ? ?
Oh I see what you mean. But maybe you don't take the £1,220 off.

So is it (56,550-300) x 4% = 2250 and then the adjustment is:
3200 - 2250 = £950

Does someone have the answers for this exam?

Looking at the next question 2.2 I'm stuck on that too......
• Registered Posts: 481
think you are right.
2.2
a) Cr vat 380
DR sales ledger 380
b) Dr sales 870
Cr sales ledger 870
c) Dr sales 720
Cr sales ledger 720
• Registered Posts: 35 ? ? ?
Thank you, that makes sense :thumbup1:
• Registered Posts: 23 Dedicated contributor ? ? ?
Someone can help me with task 2.3
The list of balances totalled £33,770 and purchases ledger control account£31,500.

(a) A creditor account with a balance of £290 had been omitted from the list.
(b) A credit purchase of £960(inclusive of VAT) had been omitted from a creditor's account.
(c) Purchase returns of £80 (inclusive of VAT) had been omitted from a creditor's account.
(d) A payment to a creditor of £500 had been credited to the creditor's account.
(e) A creditor's balance of £780 had been entered in the list as £870.

I am really strugled with that.

• Registered Posts: 481
hi, sorry i got it wrong, it should be
a)Dr suspense 380
Cr vat 380
b)Dr sales 870
Cr suspense 870
c) DR SALES LEDGER 720
CR SUSPENSE 720
so suspense account cleared with the one in trial balance
• Registered Posts: 481
mine won't balance either.
a) + 290
b)+960
c)-80
d)-1000
e)-90
• Registered Posts: 254
I got stuck on this myself last year, what i found out is that on task 2.1 c, there is a missing invoice of £2350, which needs to be added to the PLCA of £31500 to give 33850. Meibaker's adjustments are correct, which will then balance.
• Registered Posts: 481
oh i see, thanks so much for your help.
• Registered Posts: 481
thanks
• Registered Posts: 23 Dedicated contributor ? ? ?
I think with the invoice in question 2.1(c) give us the correct answer. Thanks Mike and Meibaker. This question really struggled my mind, I never more will find the answer without this invoice.

(B) loss £405

(a) HM Revenue & Customers

(b) Explain how the VAT balance has been arrived at.

I am not sure about that, do I need to explain what are include in VAT Account?
• Registered Posts: 254
I'm a bit rusty on the bad debt prov, so i dont want to give you wrong advise, however there is a section on the students page of the main website, where there is a link to e-learning of unit 5, which covers this.

For the NBV, I make this £6515.25 as for the 2nd year only 7 months interest should be deducted, as it was sold on the 1st of August. This gives a loss of £515.25.

for 2.5 a is correct. For b) you mention about it being the difference between input and output vat.
• Registered Posts: 23 Dedicated contributor ? ? ?
Hello Mikes,

I will explain how I calculated my task 2.4.

8400 x 15%=1260 (this is the year amount)
1260 / 12= 105 per month

Jan - Dez 2003= 1260
Jan - July 2004 = 735
1260 + 735= 1995
8400 - 1995 = 6405

6405 - 6000= 405

I don't understant what is wrong.
• Registered Posts: 254
Hi Imota,

I am so sorry, you are absolutly right with your calculations. I was using the reducing balance method with mine, ie by deducting the depreciation value from the cost for the 1st year and then calucating the 2nd year figure from the balance. I hope that you havent used my answer for your paper yet and i am sorry the confusion.

Michael.
• Registered Posts: 481
i 've got the same answers as you.
• Registered Posts: 35 ? ? ?
Thank you for all your help. That was my first practice exam and there was a lot I got stuck on. I hope I fair better with the next one!
• Registered Posts: 11 Regular contributor ⭐ ? ⭐
I have all the answers to this practise paper, if anyone requires them :001_smile:
• Registered Posts: 481