O-LevelAccountingVerification of accounting records7707/21 · May/June 2012 · Q219 Marks

Lau buys and sells goods on credit. The following information is provided by her for the month of March 2012: $ Trade payables 1 March 2012 15 300 Purchases returns 900 Payments by cheque 82 450 Discount received 1 350 Refunds from trade payables 700 Trade payables 31 March 2012 9 150 REQUIRED

(a)Prepare the purchases ledger control account for the month of March 2012 clearly showing the value of the purchases for the month. Purchases ledger control account[8]
(b)State two benefits to Lau of maintaining control accounts.[2]
(c)(i)Calculate the net payment to Hui.[3]
(c)(ii)Calculate the total cost to Lau of employing Hui in the month of March 2012.[2]
(d)Prepare the journal entry for wages and statutory deductions on 31 March 2012. A narrative is not required. Journal Dr $ Cr $[4]

Mark scheme

Marking points from the official mark scheme (May/June 2012). The mark or mark type is shown in brackets.

[1] Mar 31 Purchase returns 900
[1] Mar 31 Bank 82450
[1] Mar 31 Discount received 1350
[1] Mar 31 Balance c/d 9150
[1] Mar 1 Balance b/f 15300
[2] Mar 31 Purchases 77850
[1] Mar 31 Refunds 700
[1] Check on the arithmetical accuracy of the ledgers
[1] Provide information for financial statements/Financial statements can be prepared quickly
[1] Helps to detect fraud/Helps to detect errors
[1] 140 hours × $6 = $840
[1] 6 hours × $9 = $54
[1] Less tax $160
[1] Net pay $734
[1] Payment to Hui $894
[1] On costs $95
[1] Cost of employing Hui $989
[1] Wages and salaries Dr 989
[1] Bank Cr 734
[2] Tax authorities Cr 255

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