Paper F3
 

ACCA
 

Financial Accounting

Mock Exam 1
 

Answers
(Duration: 3 hours)
LSAM
 
 Mock Exam - 1 (Answers)

ANSWER 1
D

Dividends received and repayment of loan are cash flows. The rest of the items are non-cash
items.

ANSWER 2
C
$
Overdraft per bank statement (12,700)
Less: Unpresented cheques (13,300)
Add: Lodgements/deposits credited 25,600
______
Bank balance per cash book (positive) (400)
______

ANSWER 3
A
$
Total rent received during the year 810,000
Add: 1/8/20X7 rent received in advance 40,800
Less: 31/7/20X8 rent received in advance 33,500
Less: 1/8/20X7 rent in arrears 39,200
Add: 31/7/20X8 rent in arrears 35,000
_______
Total rent receivable for the year ended 31/7/20X8 813,100
_______

ANSWER 4
B
($137,850 – $2,757)

ANSWER 5
B – False

A trade discount is not recorded in the financial statements. The reduced cost of purchase
after trade discount is recorded.

ANSWER 6
C
Receivables
Bal b/d 55,000 Discounts allowed 3,500
Dishonoured cheques 6,500 Irrecoverable Debts 800
Credit sales 612,700 Bank (balance) 607,350
Bal c/d 62,550
_______ _______
674,200 674,200
_______ _______

Bal b/d 62,550

LondonSAM 1 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 7
D
$
Depreciation (80,000 u 15% u 3 years) = 36,000
NBV at time of sale (80,000 – 36,000) = 44,000
Proceeds = 39,000
______
Proceeds – NBV = (5,000)
______

ANSWER 8
C

ANSWER 9
C

Closing inventory is 160 units. Using FIFO, 150 of these are deemed to be part of the final
delivery, and therefore they are valued at $22.30 per unit = $3,345. The remaining 10 units
are deemed to be part of the previous delivery and are therefore valued at $22.20 per unit =
$222.

Thus total value is $3,567.

ANSWER 10
B

Sales Tax
Bank (part payment on account Bal b/d
to the tax authority) 10,400 22,900
Purchases (sales tax element) 369,000 Sales (sales tax element) 387,500
Purchases returns (sales tax 9,975
element)
Bal c/d 40,975
_______ _______
420,375
_______ 420,375
_______

Bal b/d 40,975

ANSWER 11
A

$92,000
Less: Overprovision of previous year’s $3,000

ANSWER 12
A

LondonSAM 2 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 13
B

Current Account – Pete

Drawings 7,300 Bal b/d 15,750

Profit Share 63,900

Bal c/d 72,350

_______ _______
79,650 79,650

Bal b/d 72,350

ANSWER 14
A

Plant & machinery Cost 160,000

Acc Depn (57,600)
_______
NBV 102,400 u 20% = $20,480

ANSWER 15
D

ANSWER 16
A

ANSWER 17
D
Payables
$ $
Bank 127,569 Bal b/d 11,564
Bal c/d 12,826
_______ Purchases (Balancing figure) 128,831
_______
140,395
_______ 140,395
_______

Bal b/d 12,826

Opening inventory + Purchases – Closing inventory = Cost of sales

$5,288 + $128,831 – $4,184 = $129,935

LondonSAM 3 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 18
C

IAS 10 dividends proposed after year end not included in financial statements.

ANSWER 19
A

Suspense a/c
$ $
Bal b/d 420 Incorrect Jnl entry 800
Cash Sale omitted 80
Bal c/d 300
___ ___
800 800
___ ___

Bal b/d 300

ANSWER 20
D

ANSWER 21
D

ANSWER 22
A

ANSWER 23
C

Closing Capital = Opening Capital + Profit – Drawings

104,864 = 96,578 + 34,050 (Bal fig) – 25,764

ANSWER 24
D

ANSWER 25
C
$
Profit for the year 300,000
+ Depreciation charges 38,000
í Increase in inventory (8,000)
í Payments for non current assets (80,000)
+ Issue of shares 100,000
_______
Increase in cash and bank 275,000
_______

LondonSAM 4 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 26
C

ANSWER 27
B

ANSWER 28
D
A B C Total
$ $ $ $
Profit for the year
Salary 12,000 18,000 24,000 54,000
Interest on capital 5,000 7,000 12,000 24,000
_______
Share of profit 150,000 120,000 30,000 300,000
_______ _______ ______
Bal figure
_______
167,000 145,000 66,000 378,000
Guaranteed minimum profit share
3,000 (2,400) (600)
_______ _______ ______
170,000 142,600 65,400
_______ _______ ______
ANSWER 29
C

ANSWER 30
B

ANSWER 31
A

ANSWER 32
A

Max Ruby Billy Max Ruby Billy

Goodwill 18,000 18,000 9,000 Bal b/d 30,000
Revaluation 40,000 60,000 –
Bal c/d 70,000 69,000 Goodwill 18,000 27,000 –
Bal c/d – – 9,000
88,000 87,000 9,000 88,000 87,000 9,000
Bal b/d 9,000 Bal b/d 70,000 69,000

LondonSAM 5 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 33
C

$150,000
Ordinary shares = 200,000 shares
75c

SOCIE $
Interim dividend 200,000 shares u 10c 20,000
Final dividend 200,000 shares u 25c 50,000
Preference dividend $75,000 u 5% 3,750
______
73,750
Statement of Financial Position
Dividend payable 50,000
______

As final dividend is declared prior to year end it is included in Financial Statements.

ANSWER 34
C
Bank
$ $
Interest Rec’d 153 Bal b/d 422

Bal c/d 269

___ ___
422
___ 422
___

Bal b/d 269

$
Balance per Bank Statement 553 Bal Fig
Less: Unpresented cheques (822)
___
Balance (269)
___

ANSWER 35
A
SOCIE
$
Ordinary Shares 200,000 @ 10c 20,000
Irredeemable Preference Shares $20,000 u 20% 4,000
______
24,000
______
Statement of Financial Position
Dividends payable Ordinary Shares 200,000 @ 10c $20,000

Dividend declared after year end are excluded from financial statement.

LondonSAM 6 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 36
D

Bonus issue does not appear in cash flow.

Cash from financing activities

$
Rights issue 60,000
Receipt 8% loan note 65,000
Payment 10% loan note (40,000)
______
85,000

ANSWER 37
D
$
Sales 150,000 100%
Cost of sales
Opening inventory 12,500
Purchases 126,500
Less: Closing inventory (19,000) Bal Fig
(120,000) 80%

Gross profit 30,000 20%

ANSWER 38
B

ANSWER 39
A

ANSWER 40
A

ANSWER 41
D

$68,566 + $99 = $68,665

ANSWER 42
C

Statement of cash flows should show dividends paid.

$50,000 proposed dividend 2007

$45,000 Interim dividend SOCIE (100,000 – 55,000)

LondonSAM 7 F3 - Financial Accounting

 Mock Exam - 1 (Answers)

ANSWER 43
B

$ $
Cost of inventory 41,875
Damaged items:
Cost 1,960
_____
Expected sale value 1,200
Less cost of repairs 360
_____
Net realisable value 840
_____
Write down ($1,960 – $840) 1,120
______
Inventory valuation 40,755
______

ANSWER 44
C

No current liability since repayment after 12 months and interest is paid monthly within each
month.

ANSWER 45
D

ANSWER 46
B
$
Inventory 22,300
Receivables 42,650
Allowance for receivables (1,570)
______ 41,080
______
63,380
______

ANSWER 47
B

ANSWER 48
A

ANSWER 49
A

ANSWER 50
D

LondonSAM 8 F3 - Financial Accounting