Accounting Level 3/Series 2 2008 (Code 3001)

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Accounting Level 3 Model Answers Series 2 2008 (Code 3001) Vision Statement Our vision is to contribute to the achievements of learners around the world by providing integrated assessment and learning services, adapted to meet both local market and wider occupational needs and delivered to international standards. © Education Development International plc 2008 Company Registration No: 3914767 All rights reserved. This publication in its entirety is the copyright of Education Development Inte
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    Accounting Level 3 Model Answers Series 2 2008 (Code 3001)    © Education Development International plc 2008 Company Registration No: 3914767All rights reserved. This publication in its entirety is the copyright of Education Development International plc.Reproduction either in whole or in part is forbidden without written permission from Education Development International plc.   International House Siskin Parkway East Middlemarch Business Park Coventry CV3 4PETelephone: +44 (0) 8707 202909 Facsimile: + 44 (0) 24 7651 6566Email: enquiries@ediplc.com Vision Statement Our vision is to contribute to the achievements of learners aroundthe world by providing integrated assessment and learning services,adapted to meet both local market and wider occupational needsand delivered to international standards.   3001/2/08/MA Page 1 of 14 Accounting Level 3 Series 2 2008 How to use this booklet Model Answers have been developed by Education Development International plc (EDI) to offer additional information and guidance to Centres, teachers and candidates as they prepare for LCCIInternational Qualifications. The contents of this booklet are divided into 3 elements:(1) Questions – reproduced from the printed examination paper (2) Model Answers – summary of the main points that the Chief Examiner expected tosee in the answers to each question in the examination paper,plus a fully worked example or sample answer (where applicable)(3) Helpful Hints – where appropriate, additional guidance relating to individualquestions or to examination techniqueTeachers and candidates should find this booklet an invaluable teaching tool and an aid to success.EDI provides Model Answers to help candidates gain a general understanding of the standardrequired. The general standard of model answers is one that would achieve a Distinction grade. EDIaccepts that candidates may offer other answers that could be equally valid.© Education Development International plc 2008All rights reserved; no part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwisewithout prior written permission of the Publisher. The book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover, other than that in which it ispublished, without the prior consent of the Publisher.   3001/2/08/MA Page 2 of 14 SECTION A(Answer Questions 1 and 2 in Section A − Compulsory)QUESTION 1 Barn plc had the following summarised Balance Sheets at 31 March 2007 and 31 March 2008respectively: 2007 2008£000 £000 £000 £000 Land at cost 650 850Buildings (cost £920,000) 828 810Machinery (cost £1,450,000) 730 440Vehicles (cost £220,000) − 190Stock 230 295Debtors 285 340Bank/Bank overdraft 35 50Creditors 210 195Proposed dividend 150 175Ordinary Shares of £1 1,500 1,800Retained profits 898 7052,758 2,758 2,925 2,925 Notes In the year to 31 March 2008:(1) No fixed assets were sold and no buildings or machinery were purchased(2) No interim dividends were paid(3) 90,000 shares were issued at par for cash and there was also a bonus (capitalisation) issue. REQUIRED (a) Calculate the operating profit for the year ended 31 March 2008 and reconcile it with the net cashinflow from operating activities.(11 marks)(b) Prepare the cash flow statement of Barn plc for the year ended 31 March 2008 in accordancewith FRS1 (revised).(9 marks) (Total 20 marks)
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