LEVEL III DIPLOMA IN COMPUTERISED BOOKKEEPING
Vishal Vij
examination_questions.pdf
LEVEL III DIPLOMA IN COMPUTERISED BOOKKEEPING
Welcome to the Level III Diploma in Computerised Bookkeeping Online. This exam paper consists of two sections:
Section One – completion of both Part A and Part B which comprises a number of bookkeeping tasks and associated reports Section Two – Uploading your reports, written answers and completing the ‘Own Work Declaration’
Please see over for further information
(Topspin) 2012
The Institute of Certified Bookkeepers London Underwriting Centre, 3 Minster Court,
Mincing Lane, City of London EC3R 7DD Tel: 0845 060 2345 www.bookkeepers.org.uk
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Section One:
In this section you will be required to complete a number of bookkeeping transactions using your computerised software package. At the end of each task you will need to save specific reports for submission. Step 1 Download the pdf file called ‘Examination Questions’ and ‘Important Information
regarding your examination Step 2 Create a folder on your computer desktop called ‘C3 Reports and Answers’ Step 3 Work through each task in the ‘Examination Questions’ document and save your
work to the folder you created in Step 2 on your desktop called ‘C3 Reports and Answers’. Each report should be saved using a filename which identifies the task to which it relates, e.g. A.1 for the report from Part A Task 1
Note: do not upload reports that require your software package to be running to
open the report. If this is the case, please save your reports in another format (pdf format preferred)
Step 4 When you have completed all tasks and have checked and saved all of the
required reports to your folder on the desktop called ‘C3 Reports and Answers’, you will need to compress the folder and ‘zip’ it
To do this you will need to select the folder and then right click and choose ‘Send
to’ Compressed (zipped) folder Once your files are ‘zipped’ and saved, you will have completed Section One of
this examination Section Two: Step 1 Upload your files to My ICB – to do this you will need to log into
‘http://my.bookkeepers.org.uk’ and go back into the ‘take a prebooked test’ section again. Here you will see a link called ‘upload files’, click on this and browse for the ‘zipped’ folder called ‘C3 Reports and Answers’ on your desktop. You will also need to type in a file name into the box labelled ‘Filename’ – this should be your student number followed by C3 Reports and Answers
Step 2 On the right hand side of the screen you will see a ‘Submit’ button, DO NOT
CLICK SUBMIT until you are ready to complete your ‘Own Work Declaration’ and end your examination.
Step 3 Carefully read through the ‘Own Work Declaration’ and if you agree that the work
you have uploaded and submitted is entirely your own work, tick the ‘Yes’ button. If you tick the ‘No’ button your work will not be marked.
Step 4 You then need to indicate which software package you used to complete your
examination by typing in the box provided, i.e. Sage 50, before clicking the ‘Finish’ button which will end your examination. Once the ‘Finish’ button is clicked you will not be able to return to your examination and your answers will be submitted to the examiner
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Assessment Criteria
This piece of work will be graded at Distinction, Merit, Pass or Fail. To pass, all candidates must achieve a minimum of 85% overall. Pass: To gain a Pass, candidates must achieve 85-89%
overall. Merit: To gain a Merit, candidates must achieve 90-94%
overall. Distinction: To gain a Distinction, candidates must achieve 95-
100% overall. Fail: Candidates who achieve less than 85% of the total
marks will be failed.
Any error will lead to a reduction in total marks. An error could include posting to the wrong nominal code, VAT being incorrectly coded, incorrect depreciation, accounts coded to the wrong section of the chart of accounts etc. Note – it is important that you keep your own back-up of your data until you are informed that you have successfully completed this assignment.
Part A - Computerised section of the examination = 70 marks Part B - Written answers = 30 marks
85% overall must be achieved to pass this examination
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Topspin Teaching 19 Connors Court
Henman Hill Wimbledon WS19 1TA
The Situation
You are producing the financial statements at the end of the trading year 2012/13 for Topspin Teaching, a partnership of tennis coaches who also sell quality rackets and balls to their customers. The business year end is 31
st May and they
use standard VAT accounting and a VAT rate of 20%. There are three founding partners, Steffi Grass, Boris Pecker and Virginia Blade. Halfway through the 2012/13 financial year Virginia retired leaving her stake in the business as an interest-free long-term loan, and a new partner, Rafa Tarkadal, joined introducing a further £8,000 of capital.
Goodwill & Profit Sharing
At the end of November 2012 Goodwill was valued at £30,000. The partners agree that Goodwill should not remain in the accounts but should, instead, be apportioned appropriately to their capital accounts. Profit sharing since the formation of the partnership had been in the ratio of 1:1:1. After the retirement of Virginia and the admission of Rafa it was agreed that it would become 2:2:1 with Rafa receiving 20% of the profits plus a salary of £500 per month (appropriated from the profits at the end of the year). At the year end, a payment of 5% interest per annum is to be made on Capital into the partners’ current accounts, pro-rated accordingly. In the case of Virginia Blade her interest and profit for the 6 month period should be added to her loan. Assume that net profit has been earned evenly throughout the year and that no changes in capital have been made apart from apportioning goodwill when Virginia retired and when Rafa joined with his investment.
Acquisition & Disposal
In April, the partners decided to replace the posts and nets on their 3 tennis courts, selling their old ones to a local tennis club for a total of £200 + VAT which was banked immediately. The 3 pairs of new posts cost £560 + VAT in total and the 3 new nets cost £80 + VAT each. The new equipment was purchased on credit. The original posts were held in the accounts at a net cost of £150 each with accumulated depreciation of £120 each. The original nets were held in the accounts at net cost of £75 each with accumulated depreciation of £75 each.
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Depreciation
Tennis posts and Line Painting equipment is depreciated at a rate of 20% per annum on cost on a straight line basis.
Tennis nets are depreciated at a rate of 33.33% per annum on cost on a straight line basis.
A full year’s depreciation is to be charged in the year of acquisition and no depreciation is to be charged in the year of disposal.
Depreciation charges should be rounded to the nearest £5.
Accruals and Prepayments
There are to be accruals for Accountancy fees of £750 and Ball girls and boys wages of £250. In March £1,440 was paid for Professional Indemnity Insurance for 1 year, starting from 1
st April.
Rent on the courts is paid quarterly in advance. The last payment of £3,000 was made on 30
th April.
Stock
At the end of the year, the unused stock of tennis rackets and balls was valued at £1,250.
Bad Debt Provision
At a recent meeting it was decided that the provision for bad debts should be increased to 5% of Debtors.
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Topspin Teaching Initial Trial Balance at 31 st
May 2013 (before any adjustments)
Dr Cr Posts & Line Painting equipment 1,450
Posts & Painting equipment dep’n 760
Tennis Nets 225
Tennis net depreciation 225
Stock of Rackets & Balls at 1 st June
2012 1,000
Debtors 4,000
Bad Debt provision 120
Bank Current Account 1,400
Bank Deposit Account 13,000
Creditors 1,250
VAT Liability 1,495
Steffi Grass Capital Account 4,000
Boris Pecker Capital Account 4,000
Virginia Blade Capital Account 4,000
Steffi Grass Current Account 800
Boris Pecker Current Account 500
Virginia Blade Current Account 200
Income from Tennis Coaching 45,750
Sales of Rackets and Balls 9,900
Purchases of Rackets and Balls 8,500
Advertising 1,000
Staff Wages 16,000
Rent 14,000
Professional Indemnity Insurance 2,640
Court Maintenance 1,650
Telephone 400
Legal Fees 1,500
Sports injury treatment 3,715
Bank charges 320
Bad Debts Written Off 200
Total 72,000 72,000
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Part A Task 1:
Post the initial trial balance from the table above into your accounting software. Create / edit nominal codes and your chart of accounts as necessary.
Save:
An Initial Trial Balance
An Initial Profit and Loss account
An Initial Balance Sheet
Task 2:
Post the amendments needed to account for the retirement of Virginia Blade and the admission of Rafa Tarkadal into the partnership, taking into account the adjustments for goodwill as well as the new investment and Virginia’s Loan.
Save a report that shows all the above journal transactions.
Task 3:
Post the transactions to represent the disposal of the old tennis posts and nets and the acquisition of the new posts and nets. A general or sundry creditors account may be used instead of a purchase ledger account for the purchase on credit.
Task 4:
Post the depreciation of the Fixed Assets.
Task 5:
Post the necessary adjustments for Accruals and Prepayments.
Task 6:
Post the necessary adjustments for opening and closing stock.
Task 7:
Post the necessary journals for the change in bad debt provision.
Save:
A Trial Balance
A Profit and Loss account
A Balance Sheet
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Task 8:
Process the year end and make the necessary adjustments in accordance with the Profit Sharing agreements.
Save:
An Opening Balance Sheet for 2013/14
An Opening Trial Balance for 2013/14
A report that shows the interest and profit sharing transactions.
This is the end of Part A (the computerised section) of the examination
Please go to page 9 for Section Two of the examination
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Part B 1. Showing your workings:
i. Calculate the percentage mark-up that Topspin Teaching add, on
average, to their Tennis Rackets and Balls. ii. Express this mark-up in terms of margin of the sale price.
2. Look back at the reports you produced in Section 1 and, assuming that the Goodwill associated with Topspin Teaching is associated with the name not the coaches and that the customers did not change as a result of the change in partners:
i. Comment on whether you think the investment made by Rafa Tarkadal was fair and why you hold this view. If you think the amount should have been different, give an approximate suggested figure explaining your reasons.
ii. Suggest 3 ways that Topspin Teaching may increase their net profit.
3. Calculate the current and quick (Acid test) ratios of Topspin Teaching using both the initial balance sheet produced in Task 1 and then the balance sheet that you produced in Task 8. Show your workings.
If Virginia Blade required her loan to be repaid within 6 months show the effect this would have on each of the most recent ratios and describe what this would mean in terms of the business’ liquidity.
This is the end of Section One of this assessment.
You will now need to log on to
http://my.bookkeepers.org.uk to complete Section Two
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©The Institute of Certified Bookkeepers 2012
Patron: His Royal Highness Prince Michael of Kent KCVO
Vice President: Leslie T Ellis
London Underwriting Centre, 3 Minster Court, Mincing Lane, City of London, EC3R 7DD
0845 060 2345 www.bookkeepers.org.uk
