Mark Scheme: Extra Assessment Material For First Teaching September 2017

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Mark Scheme

Extra assessment material for first


teaching September 2017

International GCSE in Accounting


(4AC1/02)

Paper 2: Financial Statements


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Summer 2018
Publications Code 4AC1_02_1706_MS
All the material in this publication is copyright
© Pearson Education Ltd 2018
General Marking Guidance

• All candidates must receive the same


treatment. Examiners must mark the first candidate in exactly
the same way as they mark the last.
• Mark schemes should be applied positively. Candidates must
be rewarded for what they have shown they can do rather than
penalised for omissions.
• Examiners should mark according to the mark scheme
not according to their perception of where the grade boundaries
may lie.
• There is no ceiling on achievement. All marks on the mark
scheme should be used appropriately.
• All the marks on the mark scheme are designed to be
awarded. Examiners should always award full marks if deserved,
i.e. if the answer matches the mark scheme. Examiners should
also be prepared to award zero marks if the candidate’s
response is not worthy of credit according to the mark scheme.
• Where some judgement is required, mark schemes will
provide the principles by which marks will be awarded and
exemplification may be limited.
• When examiners are in doubt regarding the application
of the mark scheme to a candidate’s response, the team leader
must be consulted.
• Crossed out work should be marked UNLESS the
candidate has replaced it with an alternative response.
Question Answer Mark
number

1(a) Award marks as indicated (3)


$116 250 (1) – $38 800 (1) = $77 450 (1of)

Question Answer Mark


number

1(b) Award 1 mark for each correct figure as indicated. (5)


Award 1 mark for all correct dates and details.

Trade Receivables Ledger Control Account

Date Details $ Date Details $


1 Jan Balance b/d 42 31 Cash book 142
2017 500 Dec (bank) 000
2017 (1)
31 Sales day 145 Journal 3
Dec book 000 (irrecoverable 050
2017 (1) debts) (1)
Balance c/d 42
450
187 187
500 500
1 Jan Balance b/d 42
2018 450
(1)
Question Answer Mark
number

1(c) Award 1 mark for each correct figure with


understandable label as indicated.
Sonali
Statement of financial position at 31 December 2017
$
Assets
Non-current assets
Fixtures and fittings 40 000 (1)
Current assets
Inventory 33 950 (1)
Trade receivables 42 450 (1of)
76 400
Total assets 116 400
Equity and liabilities
Equity
Equity 77 450 (1of)
Profit for the year 21 750 (1)
Drawings (18 700) (1)
Total equity 80 500
Current liabilities
Trade and other payables 33 200 (1)
Cash and cash equivalents 2 700 (1)
35 900
Total equity and liabilities 116 400 (1of
must be
equal to
total
assets) (9)

Question Answer Mark


number

1(d)(i) Award mark as indicated. (1)


Prudence concept (1)

Question Answer Mark


number

1(d)(ii) Award marks as indicated. (4)


Provision for irrecoverable debts will reduce the trade
receivables (1) which will reduce total assets. (1) The
total equity will be reduced (1) as the result of the
reduction of profit (1).
Question Indicative content Mark
number

1(e) Award 1 mark for each ratio as indicated. (3)


Return on capital employed has improved,
which indicates better utilisation of resources /
has generated higher profit for every dollar used/employed
in the business (1).

Although the business was able to pay off its short-term


liabilities in 2016 it has improved its current (working
capital) ratio, which is slightly higher than the standard
and indicates inefficient working capital management (1).

Liquid (acid test) ratio has improved,


which indicates that the business can pay off its short-term
liabilities with liquid assets / this indicates that the
business has more inventory than before which will
increase inventory holding costs (1).

Overall the performance of the business has improved.


Question Answer Mark
number

2(a) Award 1 mark for each correct figure with (12)


understandable label as indicated.
Sam
Manufacturing account for the year ended 31 December
2017
$ $
Opening inventory of raw 68 000
materials
Purchases 450 000
Carriage inwards 15 000 (1)
Closing inventory of raw (75 000)
materials
Cost of raw materials 458 000 (1of
consumed w+f)
Direct wages 147 500 (1)
Direct expenses 33 950 (1)
Prime cost 639 450 (1of
w+f)
Depreciation on factory 13 122 (1)
machinery
Factory supervisor’s salary 60 000
Insurance w1 20 800 (2)
Rent and rates w2 76 000 (2)
169 922
809 372
Opening inventory of work in 85 278
progress
Closing inventory of work in (98 000)
progress
(12 722) (1)
Production cost 796 650 (1of
w+f)

w1: 24 000 + 2 000 = 26 000 (1) * 80% = 20 800 (1of)


w2: 120 000 – 25 000 = 95 000 (1) * 80% = 76 000 (1of)
Question Answer Mark
number

2(b) Award 1 mark for each correct figure with (10)


understandable label as indicated.
Sam
Income statement for the year ended 31 December
2017

$ $
Revenue 1 787 500
(1)
Cost of sales
Opening inventory 125 000
Production cost 796 650 (1of)
Closing inventory (235 000)
(686 650)
(1of)
Gross profit 1 100 850
(1of)
Expenses
Carriage outwards 27 500 (1)
Depreciation charge 2 187 (1)
Office general 219 450 (1)
expenses
Insurance 5 200 (1of)
Rent and rates 19 000 (1of)
(273 337)
Profit for the year 827 513
(1of)

Question Answer Mark


number

2(c) Award 1 mark for each statement to explain the (3)


difference between different types of inventories as
indicated.
Raw materials stock is the stock of crude or processed
material that can be converted by manufacture into a
saleable good (1).

Work in progress stock is goods which have started their


manufacturing process so are no longer included in the raw
materials stock, but have not yet reached a stage where
they are fit to be sold (1).

Finished goods stock is goods which have completed the


manufacturing process and are available to be sold (1).

(Total for Question 2 = 25 marks)


TOTAL FOR PAPER = 50 MARKS

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