Sarah Glass/KW Enterprise practice exam

emmag
emmag 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.

Bad debts £1,220 DR
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:

Comments

  • meibaker
    meibaker 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
  • emmag
    emmag 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......
  • meibaker
    meibaker 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
  • emmag
    emmag Registered Posts: 35 ? ? ?
    Thank you, that makes sense :thumbup1:
  • imota
    imota 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.

    Please help me
  • meibaker
    meibaker 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
  • meibaker
    meibaker Registered Posts: 481
    mine won't balance either.
    a) + 290
    b)+960
    c)-80
    d)-1000
    e)-90
    what's your answer?
  • mikes
    mikes 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.
  • meibaker
    meibaker Registered Posts: 481
    oh i see, thanks so much for your help.
  • meibaker
    meibaker Registered Posts: 481
    have you got the answer for prov. for bad debts adj.?
    thanks
  • imota
    imota 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.

    What is your answer for task 2.4 (a)
    my answer is £6405

    (B) loss £405

    Task 2.5
    (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?
  • mikes
    mikes 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.
  • imota
    imota Registered Posts: 23 Dedicated contributor ? ? ?
    Hello Mikes,

    Thanks for all your help.

    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.
  • mikes
    mikes 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.
  • meibaker
    meibaker Registered Posts: 481
    i 've got the same answers as you.
  • emmag
    emmag 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!
  • JakkiMitchell
    JakkiMitchell Registered Posts: 11 Regular contributor ⭐ ? ⭐
    I have all the answers to this practise paper, if anyone requires them :001_smile:
  • meibaker
    meibaker Registered Posts: 481
    yes please. could you email to me please [email protected]
    thanks again
  • JakkiMitchell
    JakkiMitchell Registered Posts: 11 Regular contributor ⭐ ? ⭐
    I will scan them in over weekend and email them.

    Only have a paper copy.
  • beavis182
    beavis182 Registered Posts: 130 ? ? ?
    i dont suppose u can email me a copy to. Its my first practise exam and wud be nice to check my answers as i go through to make sure what im doing is remotely correct.

    [email protected]


    cheers
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