O-LevelAccountingAccounting procedures7707/22 · May/June 2025 · Q320 Marks

Jasmine owns a consulting business. At 1 April 2024, Jasmine's ledger accounts included the following balances. Motor vehicles $16000 Provision for depreciation of motor vehicles $7000 Trade receivables $12220 Provision for doubtful debts $366 Rent (prepaid) $900 Rates (unpaid) $270 During the year ended 31 March 2025, Jasmine's bank payments included the following amounts. Motor vehicles $18000 Rent and rates $14960 Additional Information 1 Depreciation is to be provided at 25% per annum using the reducing balance method. A full year's depreciation is to be charged on vehicles purchased during the year. 2 Trade receivables at 31 March 2025 were $11800. An amount of $300 is still to be written off as irrecoverable. 3 The provision for doubtful debts is to be maintained at 3% of net trade receivables. 4 At 31 March 2025, prepaid rent was $925 and unpaid rates were $185.

(a)Prepare the provision for depreciation of motor vehicles account for the year ended 31 March 2025. Balance the account and bring down the balance at 1 April 2025.[4]
(b)Prepare the provision for doubtful debts account for the year ended 31 March 2025. Balance the account and bring down the balance at 1 April 2025.[4]
(c)Prepare the rent and rates account for the year ended 31 March 2025. Balance the account and bring down the balances at 1 April 2025.[6]
(d)Prepare the current assets section of Jasmine's statement of financial position at 31 March 2025.[3]
(e)(i)how the principle of consistency is applied when charging depreciation.[1]
(e)(ii)one way Jasmine may reduce the possibility of irrecoverable debts.[1]
(e)(iii)which accounting principle Jasmine is applying by making an adjustment for rent prepaid.[1]

Mark scheme

Marking points from the official mark scheme (May/June 2025). The mark or mark type is shown in brackets.

[1] Apr 1 Balance b/d 7000
[2] Mar 31 Income statement 6750 (CF, or 1 mark for 2250 or 4500 if a credit entry with IS label)
[1] Mar 31 Balance c/d 13750
[1] Apr 1 Balance b/d 13750 OF
[1] Apr 1 Balance b/d 366
[1] Mar 31 Income statement 21 OF
[1] Mar 31 Balance c/d 345
[1] Apr 1 Balance b/d 345 OF
[1] Apr 1 Balance b/d (rent prepaid) 900
[1] Apr 1 Balance b/d (rates unpaid) 270
[1] Mar 31 Bank 14960
[1] Mar 31 Income statement 14850 OF
[1] Mar 31 Balance c/d (rates unpaid) 185
[1] Mar 31 Balance c/d (rent prepaid) 925
[1] Apr 1 Balance b/d (rent prepaid) 925
[1] Apr 1 Balance b/d (rates unpaid) 185
[1] Trade receivables (11800 – 300) 11500
[1] Less Provision for doubtful debts 345 OF
[1] Net Trade receivables 11155 OF
[1] Other receivables 925
[1] Total Current Assets 12080 OF
[1] Depreciation is charged using the same method each year.
[1] Obtaining credit references / Establishing credit limits
[1] Sending invoices and statements promptly
[1] Improve credit control / monitoring/investigating/chasing overdue accounts
[1] Refusing to supply customers until outstanding amounts have been paid
[1] Taking legal action
[Max 1]
[1] Matching / accruals

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