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
Less: Unpresented cheques
Add:
Lodgements/deposits credited

$
(12,700)
(13,300)
25,600
______

Bank balance per cash book (positive)

(400)
______

ANSWER 3
A
Total rent received during the year
Add:
1/8/20X7 rent received in advance
Less: 31/7/20X8 rent received in advance
Less: 1/8/20X7 rent in arrears
Add:
31/7/20X8 rent in arrears

$
810,000
40,800
33,500
39,200
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
Dishonoured cheques
Credit sales

55,000
6,500
612,700

Discounts allowed
Irrecoverable Debts
Bank (balance)
Bal c/d

_______
674,200
_______
Bal b/d

LondonSAM

3,500
800
607,350
62,550
_______
674,200
_______

62,550

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 7
D
$
Depreciation (80,000 u 15% u 3 years)
NBV at time of sale (80,000 36,000)
Proceeds

=
=
=

Proceeds NBV

36,000
44,000
39,000
______
(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
to the tax authority)
Purchases (sales tax element)

10,400
369,000

Bal b/d

Bal c/d

40,975
_______

_______

420,375
_______

420,375
_______

Sales (sales tax element)

Bal b/d

22,900
387,500
9,975

40,975

ANSWER 11
A
$92,000
Less: Overprovision of previous years $3,000

ANSWER 12
A

LondonSAM

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 13
B
Current Account Pete

Drawings

7,300

Bal c/d

Bal b/d

15,750

Profit Share

63,900

72,350
_______

_______

79,650

79,650
Bal b/d

72,350

ANSWER 14
A
Plant & machinery

Cost
Acc Depn

160,000
(57,600)
_______
102,400 u 20% = $20,480

NBV

ANSWER 15
D

ANSWER 16
A

ANSWER 17
D
Payables
$
Bank
Bal c/d

127,569
12,826
_______

$
Bal b/d
Purchases (Balancing figure)

140,395
_______

11,564
128,831
_______
140,395
_______

Bal b/d

12,826

Opening inventory + Purchases Closing inventory = Cost of sales

LondonSAM

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
Cash Sale omitted
Bal c/d

420
80
300
___

Incorrect Jnl entry

800
___

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
+ Depreciation charges
Increase in inventory
Payments for non current assets
+ Issue of shares

$
300,000
38,000
(8,000)
(80,000)
100,000
_______

Increase in cash and bank

275,000
_______

LondonSAM

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 26
C

ANSWER 27
B

ANSWER 28
D
A
$
Profit for the year
Salary
Interest on capital
Share of profit

B
$

C
$

Total
$

12,000
5,000

18,000
7,000

24,000
12,000

54,000
24,000
_______

150,000
_______

120,000
_______

30,000
______

300,000
Bal
figure
_______

167,000

145,000

66,000

378,000

3,000
_______

(2,400)
_______

(600)
______

170,000
_______

142,600
_______

65,400
______

Guaranteed minimum profit share

ANSWER 29
C

ANSWER 30
B

ANSWER 31
A

ANSWER 32
A

Goodwill

Bal c/d

Max

Ruby

Billy

18,000

18,000

9,000

70,000

69,000

Max

Bal b/d

LondonSAM

87,000

30,000

Revaluation

40,000

60,000

Goodwill

18,000

27,000

9,000

88,000

87,000

9,000

70,000

69,000

9,000
9,000

Billy

Bal b/d

Bal c/d
88,000

Ruby

Bal b/d

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 33
C

Ordinary shares

$150,000
= 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

50,000
______

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

ANSWER 34
C
Bank
$

Interest Recd

153

Bal b/d

422

Bal c/d

269
___

___

422
___

422
___
Bal b/d

269
$
553 Bal Fig
(822)
___
(269)
___

Balance per Bank Statement

ANSWER 35
A
SOCIE
$
20,000

Ordinary Shares

200,000 @ 10c

Irredeemable Preference Shares

$20,000 u 20%

4,000
______
24,000
______

Statement of Financial Position

200,000 @ 10c

$20,000

Dividend declared after year end are excluded from financial statement.

LondonSAM

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 36
D
Bonus issue does not appear in cash flow.
Cash from financing activities
$
60,000
65,000
(40,000)
______
85,000

Rights issue
Receipt 8% loan note
Payment 10% loan note

ANSWER 37
D
Sales
Cost of sales
Opening inventory
Purchases
Less: Closing inventory

$
150,000

100%

(120,000)

80%

30,000

20%

12,500
126,500
(19,000) Bal Fig

Gross profit

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

F3 - Financial Accounting

Mock Exam - 1 (Answers)

ANSWER 43
B
$
Cost of inventory
Damaged items:
Cost

$
41,875

1,960
_____

Expected sale value

1,200
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
Receivables
Allowance for receivables

22,300
42,650
(1,570)
______

41,080
______
63,380
______

ANSWER 47
B

ANSWER 48
A

ANSWER 49
A

ANSWER 50
D

LondonSAM

F3 - Financial Accounting