Just redone my answers for FRA December 06 Exam

Done all the answers as close to as i did them in the exam as they've released the questions now, not very clear on here if anybody wants me to send them i will, not sure how right they are:

Section 1
1.1
£212,000 (Cash Sales) + £46,000 (Credit Sales) = £258,000

1.2
(a) £46,000 x 1.175 = £54,050

(b)
Sales Ledger Control Account
£ £
Opening Balance 4,120
Credit Sales 54,050 Receipts from Debtors 52,460
Closing Balance 5,710
58,170 58,170






1.3
(a) £212,000 x 1.175 = £249,100
(b)
Dr £ CR £
Opening Balance 5,630 Payroll Expenses 48,000
Receipts from Debtors 52,460 Admin expenses 6,400
Cash Sales 249,100 Vehicle Running Expenses 184,475
Drawings Alex 19,800
Drawings Charlie 22,000
VAT 17,300


Closing Balance 9,215
307,190 307,190



1.4
£184,475 x 40/47 = £157,000

1.5
(a) 60,000 – 16,770 = 43,230
43,230 x .3 = £12,969

(b) 12,969 + 16,770 = £29,739

1.6
6,400 + 675 = £7075

(Dr Admin Expenses Cr Accruals)
1.7
48,000 + 950 – £2,200 = £46750

1.8

Alex £ Charlie £ Alex £ Charlie £
Balance b/f 5,590 3,190
Drawings 19,800 22,000
Error/ Adjustment 2,200
Balance c/f 16,410 18,810
22,000 22,000 22,000 22,000


1.9

Ace Cars- Trial Balance as at 30/9/06
Dr £ CR £
Accrual for Admin Expenses (Accountancy Fees) 675
Accrual for Payroll Expenses 950
Admin Expenses 7,075
Bank 9,215
Capital Account- Alex 20,000
Capital Account- Charlie 20,000
Current Account- Alex 16,410
Current Account- Charlie 18,810
Depreciation Expense 12,969
Payroll Expenses 46,750
Sales 258,000
Sales Ledger Control Account 5,710
VAT 4,575
Vehicles- Cost 60,000
Vehicles- Accumulated Depreciation 29,739
Vehicle Running Expenses 157,000

333,939 333,939

1.10
(a) Fixed Assets Register
(b)
- Method of Depreciation
- Date of Disposal
- Disposal Proceeds
- Cost

(c ) – Physical Check can be made
- Shows Net Book Value of the Asset over time

1.11
(a) One of the partners of Harper and co.
(b) Over £500

Section 2

2.1
£2990
(a) add £83
(b) subtract £18
(c) subtract £50
(d) subtract £30
£2975

2.2
Thank you for asking me about the reconciliation between the sales ledger and the sales ledger control account.
The sales ledger contains the individual accounts of suppliers. Each
record shows the individual transactions between the business and the customer. It is not part of the double entry system. The individual accounts are memoranda accounts.

The sales ledger control account is a summary of the activity in the
sales ledger, using the information from the books of original entry. It is part of the double entry accounting system.

The reason for doing the reconciliation is to ensure the total of the individual accounts equals the balance in the control account. If they do not balance, it is known that errors have taken place. Therefore the reconciliation finds errors
that may have taken place either in the sales ledger or in the sales ledger control account.
However, an error of original entry in the day book will be transferred to both ledgers and would not be detected by a comparison of the balances.

2.3
Dr £ Cr £
Prepayments 900
Rent 900

Provision for Doubtful Debts (B/S) 31
Adj to Prov for Doubtful Debts (P+L) 31

Loan interest 15
Accrual 15

Closing Stock (B/S) 4100
Closing Stock (P&L) 4100

Equipment @ Cost 500
Disposals 500
Equipment Accumulated Depreciation 300
Disposals 300
Sales 275
Disposals 275
Profit on disposal 75
2.4 & 2.5
Preliminary Adjustments Profit and Loss Balance Sheet
Dr £ CR £ Dr £ CR £ Dr £ CR £ Dr £ CR £
Bank 1100 1100
Capital 7500 7500
Cash 150 150
Depreciation expense 900 900
Drawings 15000 15000
Equipment at cost 5000 500 4500
Equipment accumulated depreciation 1900 300 1600
General expenses 3700 3700
Loan 2500 2500
Loan interest 165 15 180
Opening stock 3320 3320
Provision for doubtful debts 150 31 119
Purchases 24700 24700
Rent 4500 900 3600
Sales 47260 275 46985
Sales ledger control account 2975 2975
Accruals 15 15
Prepayments 900 900
Closing Stock- Balance Sheet 4100 4100
Closing Stock- P & L 4100 4100
Adjustment to Prov for Doubtful Debts 31 31
Disposal of Fixed Assets 500 300+275 75
Net Profit/ Loss for Year 14791 14791
Total 60410 60410 6196 6196 51191 51191 27625 27625
2.6

P&L Account for Year ended 30/9/06
£ £
Sales 46985

Less: Cost of Sales
Opening Stock 3320
Purchases 24700
Less: Closing Stock -4100
Cost of Sales 23920

Gross Profit 23065
Plus: Income
Profit on Disposal 75
Adjustment to Prov for Doubtful Debts 31
23171

Less: Expenses
Depreciation 900
General Expenses 3700
Loan interest 180
Rent 3600
8380

NET PROFIT 14791

2.7
(a) Cash, Sales Ledger Control Account
(b) Capital