Level 4 Diploma in Professional Accounting Skills Check

Introduction

Level 4 Diploma in Professional Accounting Skills Check

This assessment contains 5 Tasks and you should attempt EVERY Task.

Read each task carefully to make sure you understand what is required.

Both minus signs and brackets can be used to indicate negative numbers UNLESS the task states otherwise.

Numerical answers MUST NOT include any blank spaces and you MUST use a full stop to indicate a decimal point. For example, write 999.99 and NOT 999,99 or 999 99.

You may use a comma to indicate thousands, but you don’t have to. For example, 150000 and 150,000 are both acceptable.

Once saved, you will be able to restore or remove your most recent data should you need to reload the assignment at a future point.

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Task 1

Task 1a

In this task you can ignore VAT.

A business buys a van for £16,000. Depreciation is accounted for at the end of each year using the diminishing balance method at 40% per year.

Calculate the depreciation charge at the end of the first and second years.

End of year 1

End of year 2

What will be the carrying amount at the end of year 2

Task 1b

A business's financial year ends at the end of March every year.

A business receives an electricity bill in May for £4,500 covering the period February to April.

What will be the accrual or prepayment amount?

The figure will be recorded as a

in the electricity account.

The figure will be recorded as a

in the

account.

Task 2

Task 2a

A business is to provide an allowance for doubtful receivables at 2% of the outstanding receivables figure. The outstanding receivables figure is £28,000.

Show the journal required to record this:

Account Name	Debit	Credit
	£	£
	£	£

Task 2b

Put the following figures into the debits or credits side of the Trial Balance. You will need to calculate the missing capital figure.

Total the debits and credits and ensure the two sides balance

Account Name	Balance	Debit	Credit
Sales	£312,480	£	£
Purchases	£204,800	£	£
Receivables	£23,040	£	£
Payables	£2,560	£	£
Electricity	£2,304	£	£
Wages	£55,400	£	£
Depreciation charge	£14,400	£	£
Money at the bank	£19,200	£	£
Till Float	£200	£	£
VAT owing to HMRC	£20,560	£	£
Bank loan	£12,000	£	£
Delivery vehicle	£15,000	£	£
Office equipment	£30,000	£	£
Capital	?	£	£
TOTALS		£	£

Task 3

Task 3a

Harry Ryder has had a robbery at his warehouse. He wants to know the value of the stock which was stolen. He has given you the following information:

Sales	£491,400
Inventory at the beginning of the year	£14,820
Purchases	£198,540
Inventory counted at the end of the year after the robbery	£5,600

Harry has a profit margin of 60% on all goods sold.

Calculate the value of the stolen stock

Task 3b

The following is a list of accounts of a business. In each case show whether the item is shown in the Statement of Profit or Loss (SPL) or the Statement of Financial Position (SFP) and where in that financial statement the item goes.

Account	Amount	SPL or SFP	Section
Sales	£374,900
Purchases	£245,760
Receivables	£31,200
Payables	£3,050
Electricity	£2,800
Wages	£66,500
Depreciation charge	£1,730
Money at the bank	£23,000
Till float	£300
VAT owing to HMRC	£24,600
Bank loan	£14,000
Delivery vehicle	£20,000
Office equipment	£45,000
Capital	£24,740
Drawings	£5,000

Task 4

Task 4a

Kiwanda Ltd makes two products. The Kitu is budgeted to sell 20,000 units and the Pili is budgeted to sell 3,000 units.

Direct costs per unit are:

	Kitu	Pili
Direct materials	£20.00	£45.00
Direct labour	£15.00	£40.00

There are 2 cost pools

Cost Pool	Cost	Cost Driver	Total	Kitu	Pili
Stores cost	£155,000	Material orders	3,100	1,000	2,100
Set-up cost	£10,200	Machine set-ups	5,100	4,500	600

Complete both tables below to show the total cost of each product.

Kitu
	No of activities	ABC Rate	Total Cost	Unit Cost
Direct Materials				£
Direct Labour				£
Stores cost	1,000	£	£	£
Set-up cost	4,500	£	£	£
Total				£

Pili
	No of activities	ABC Rate	Total Cost	Unit Cost
Direct Materials				£
Direct Labour				£
Stores cost	2,100	£	£	£
Set-up cost	600	£	£	£
Total				£

Task 5b

Premier Productions Ltd makes one product - the Premidge. It is made in batches of 5,000.

The following costs have been identified:

The Premidge	per batch
Direct material	£4,000
Direct labour	£3,000
Variable overheads	£2,200
Fixed production overheads	£1,700
Fixed non-production overheads	£1,400
Total cost	£12,300

Complete the following table:

	Batch cost	Unit cost
Marginal cost	£	£
Absorption cost of production	£	£
Total cost	£	£

Task 5

Williams Warehouse produces and sells the Silna.

The table below shows the original budget for the previous month.

The Silna
Sales volume	5,000
	per batch
Direct materials	£1,900
Direct labour	£3,050
Variable overheads	£2,600
Fixed overheads	£4,400

The table below shows the actual figures.

Flex the budget and calculate the variance. Show whether the variance is favourable or adverse. In this task you should not use negative figures.

	Flexed Budget	Actual	Variance
Sales volume		5,500
Direct materials	£	£3,100	£
Direct labour	£	£3,200	£
Variable overheads	£	£2,800	£
Fixed overheads	£	£4,000	£
Total cost	£	£13,100	£

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