© UNIVERSITY OF SURREY Faculty of Arts and Social Sciences Surrey Business School Undergraduate Programme in Accounting & Finance Module MAN1061: 15 credits FINANCIAL ACCOUNTING (Close Book Examination) Level HE1 Examination SAMPLE EXAM ANSWERS Time allowed: 2 hours Semester 1 Sample Student Name: URN: Instructions to candidates: Answer only 3 questions as follows: Section A: question 1 Section B: choose 2 out of the 3 questions available This question booklet is also your answer booklet. You must write your answers on this booklet only as no other booklets will be marked. You are required to hand this entire booklet to an invigilator at the end of the examination. For use by examiners only Questions Marker 1 Marker 2 Total Final mark (%)
Section A: Answer question 1 Question 1 The following trial balance is of T. Portside a sole trader at 31 May 2010: Buildings at cost Buildings, accumulated depreciation, 1 June 09 Plant at cost Plant, accumulated depreciation, 1 June 09 Land at cost 238 Bank balance 30 Sales Purchases 884 Discounts 20 Returns inwards 28 Carriage outwards Wages 170 Insurance Energy expenses Inventory at 1 June 09 Trade payables Trade receivables 263 Office expenses Allowance for ID at 1 Jun 09 Loan Loan interest paid Drawings Capital Debit £000 592 176 10 14 70 128 64 4 20 2,711 Credit £000 48 88 1,510 76 207 8 40 734 2,711 Additional information as at 31 May 2010: 1. Closing inventory has been counted and valued at £60,000 2. £12,000 for energy expenses for May 2010 has not been accrued. 3. Insurance expenses include £2,000 for June & July 2010. 4. Irrecoverable debts of £7,000 have yet to be written off 5. The allowance for ID is to be increased to 5% of trade receivables. 6. Plant is depreciated at 25% per annum using the reducing balance method. 7. Buildings are depreciated at 5% per annum on their original cost. 8. T.Portside had removed inventory costing £10,000 for his own use during the year. Required: (a) Prepare the Income Statement and SFP for the year ended 31 May 2010 (40 marks) 1
Question 1-continued T.Portside income statement for the year ended 31 May2010 £000 £000 Revenue (1510-28) 1,482 Cost of Sales Opening inventory 128 Purchases (884 - 10) 874 Closing inventory (60) 1,002 942 Gross Profit Discount received 540 76 Less: expenses Carriage outwards 10 Discounts allowed Wages 12 20 170 Insurance (14,000-2,000) 82 Energy (70,000+12,000) Office expenses 64 Depn - plant(176-88)*25% 22 Depn - buildings(592*5%) Irrecoverable debts 30 Allowance for ID(13-8) 7 Interest 5 4 (426) Profit for the year 190 2