Mark Scheme

June 2019

Pearson LCCI Certificate in Accounting Level 3

(ASE20104)

1
 LCCI Qualifications

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June 2019
Publications Code: 64525_MS
All the material in this publication is copyright
© Pearson Education Ltd 2019
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.

• Where marks are awarded for own figure answers, these marks can only be
awarded if evidence of how the candidate arrived at their values has been
provided (their workings).

• If candidate's fail to provide their workings when instructed in the paper, it

may not be possible to achieve all marks associated with the question, even
if the final answer is correct.

• For calculation questions full marks can be awarded where correct answer is
seen with no workings shown, unless question states that candidate must
provide workings.

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Abbreviations

of Own Figure rule

Accuracy marks can be awarded where the candidates’ answer does not
match the mark scheme, though is accurate based on their valid method.

cao Correct Answer Only rule

Accuracy marks will only be awarded if the candidates’ answer is correct,
and in line with the mark scheme.

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Question Answer (AO2) 4 Mark
1(a) Award marks as indicated.

$79 550 (4) W

W
$
81 100
(1 100) (1)
(250) (1)
(200) (1) (4)
79 550 (1of)
Additional guidance
Correct answer only scores 4 marks.
No specific layout required.

Question Answer (AO2) 18 Mark

1(b) Award 1 mark for each correct figure with label as indicated.
Motab Ltd
Statement of profit or loss for the year ended 31 March 2019
$
Revenue 575 200 (1)
Cost of sales W1 (299 750) (3)
Gross profit 275 450 (1of)
Administrative expenses W2 (67 050) (4)
Distribution costs W3 (93 900) (5)
Profit from operations 114 500 (1of)
Finance costs (2 400) (1)
Profit before tax 112 100 (1of)
Tax (23 750)
Profit for the year 88 350 (1of)
W1 W2
$ $
67 900 61 630
310 750 2 900 (1)
650 (1) 2 400 (1)
(79 550) (1of) 120 (1)
299 750 (1of) 67 050 (1of)
W3
$
68 480
2 900 (1)
(980) (1)
1 500 (1)
22 000 (1)
93 900 (1of) (18)

(Total for Question 1 = 22 marks)

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Question Answer (AO2) 8 Mark
2(a) Award marks as indicated against correct label

Eff Ltd
Statement of changes in equity for the year ended 31 March 2019

Share Share Revaluation Retained Total

capital premium reserve earnings
$ $ $ $ $
1 April 2018 300 000 60 000 150 000 89 750 599 750
Bonus issue 50 000 (50 000) -
(1) (1)
Rights issue 50 000 12 500 62 500
(1) (1)
Final (20 000) (20 000)
dividend (1)
Revaluation 30 000 30 000
reserve (1)
Profit for the 68 500 68 500
year (1)
31 March 400 000 22 500 180 000 138 250 740 750
2019 (1of
row) (8)

Question Answer (AO2) 4 Mark

2(b) Award 1 mark for each correct figure with label as indicated.
Eff Ltd
Statement of financial position at 31 March 2019…
$
Equity and liabilities
Equity
Share capital 400 000
Share premium 22 500
Revaluation reserve 180 000
Retained earnings 138 250
Total equity 740 750 (1of)
Non-current liabilities
8% bank loan (2021) 35 000 (1)
Current liabilities
Trade and other payables 33 750
Tax payable 11 200
Bank overdraft 3 100
48 050 (1)
Total liabilities 83 050
Total equity and liabilities 823 800 (1of)
(4)

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Question Answer (AO3) 2 Mark
2(c) Award 1 mark for identification and 1 mark for linked
justification/reasoning.

It is statutory requirement for a company to prepare a statement of cash

flows (1) as it provides information/reasons for the changes in the cash and
cash equivalents during a year (1).

Accept any other appropriate responses.

(2)

Question Answer (AO1) 7 Mark

2(d) Award marks as indicated

Operating Investing Financing

activities activities activities

Dividend paid  (1)

Dividend received  (1)

Profit on disposal of non-current  (1)

asset
Disposal proceeds of non-current  (1)
asset
Rights issue  (1)

Receipt of bank loan  (1)

Repayment of bank loan  (1)

(7)

Total for Question 2 = 21 marks)

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Question Answer (AO2) 1 Mark
3(a) Award marks as indicated.

$43 260 (1)

(1)

Question Answer (AO2) 11 Mark

3(b) Award marks for correct figure against correct label

Hamza
Extended trial balance extract at 30 April 2019
Adjustment
Balance Debit Credit
$ $ $
Advertising 3 750 500 (1)
Discount allowed 640 150 (1)
Discount received 380 150 (1)
Equity 43 800
General expenses 8 460
Motor expenses 10 830 250 (1)
Motor vehicles - cost 32 000
Motor vehicles - 13 500 4 500 (1)
accumulated depreciation
Trade payables 15 700
Trade receivables 29 360
Closing inventory – statement 43 260
of financial position (1of)
(11)
Closing inventory – statement 43 260 (1of)
of profit or loss
Depreciation charge 4 500 (1)
Drawings 250 (1)
Other receivables 500 (1)
Suspense 300 (1)

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Question Answer (AO4) 4, (AO5) 1 Mark
3(c) Award 1 mark for each point of analysis up to a maximum of 4
marks.
Award 1 mark for evaluation.

Sample answer

Employ a credit controller who should ensure prompt submission of invoices

and statements / regular calls to chase outstanding amounts (1). Receiving
monies sooner will result in improved cash flow and a reduction in the trade
receivables collection period (1).

Receiving monies from customers promptly will enable Hamza to settle

amounts due to suppliers promptly (1) and as a result will benefit from
available cash discounts. (1)

Overall, effective credit control will reduce both the trade receivables
collection period and trade payables payment period. (1)
(5)
Accept any other appropriate responses.

Question Answer (AO1) 3 Mark

3(d) Award marks as indicated

Scenario Accounting concept

The method of depreciating motor vehicles Consistency (1)
should not be changed to reducing (diminishing)
balance.
Customers’ orders received on the last day of the Realisation (1)
financial year, but not invoiced or paid for,
should be excluded from the revenue of the
current year.
The value of closing inventory should be Accruals (1)
deducted from the cost of sales.

(3)

(Total for Question 3 = 20 marks)

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Question Answer (AO2) 1 Mark
4(a) Award mark as indicated.
(1)
$5 510 (1)
Additional guidance
Correct answer only scores 1 mark.
No specific layout required.

Question Answer (AO2) 3 Mark

4(b) Award marks as indicated.

649 (3)W

W (3)
$5 510 (1of) / $8.50 (1) = 649 (1of)
Additional guidance
Correct answer only scores 3 marks.
No specific layout required.

Question Answer (AO2) 1 Mark

4(c)(i) Award mark as indicated.

251 (1of) based on 4(b)

(1)

Additional guidance
Correct answer only scores 1 mark.
No specific layout required.

Question Answer (AO2) 1 Mark

4(c)(ii) Award mark as indicated.

$3 765 (1of) based on 4(c)(i) (1)

Additional guidance
Correct answer only scores 1 mark.
No specific layout required.

Question Answer (AO2) 5 Mark

4(d) Award marks as indicated for correct figures against correct labels.
Henrick
Weekly Marginal Cost Statement
$
Revenue 13 500 (1)
Variable costs 5 850 (1)
Contribution 7 650 (1)
Fixed costs 5 510 (1of)
Budgeted profit 2 140 (1of)
(5)

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Question Answer (AO2) 3 Mark
4(e) Award marks as indicated.

1002 (3)W

W (3)
($5 510 (of) + $2 500) (1of) / $8 (1of) = 1002 (1of)
Additional guidance
Correct answer only scores 3 marks.
No specific layout required.

Question Answer (AO3) 4, (AO5) 1 Mark

4(f) Award maximum 4 marks for discussion of each method.
Award 1 mark for decision.

As Henrick only produces one product, marginal costing enables him to

closely monitor contribution and breakeven point (1) to ensure that he is
covering fixed costs and achieving his required target profit (1).

Absorption costing necessitates the calculation of an overhead absorption

rate which can be arbitrary and time-consuming (1) though it does enable a
proportion of all fixed costs to be factored into the unit selling price (1).

Overall, Henrick would be advised to continue using a marginal costing

system (1).

Accept any other appropriate responses.

(5)

(Total for Question 4 = 19 marks)

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Question Answer (AO2) 9 Mark
5(a) Award 1 mark for each correct row.

Eduardo
Trade receivables budget for the three-month period ending 31
December 2019

October November December

$ $ $
Opening _ (1of)
balance 37 800 56 160
Credit sales 37 800 41 040 45 360 (1)

Receipts _ (22 680) (39 744) (1)

Closing 37 800 56 160 61 776 (1of)
balance

Eduardo
Trade payables budget for the three-month period ending
31 December 2019

October November December

$ $ $
Opening 24 500 26 600 31 500
balance (1)
Credit 26 600 31 500 24 000 (1)
purchases
Payments (23 275) (25 270) (29 925) (1)
Discount (1 225) (1 330) (1 575) (1)
received
Closing 26 600 31 500 24 000 (1of)
balance
(9)

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Question Answer (AO2) 2 Mark
5(b) Award marks as indicated

$76 224 (2)W

(2)
W

$62 424 (of) + $13 800 (1) = $76 224 (1of)

Additional guidance
Correct answer only scores 2 marks.
No specific layout required.

Question Answer (AO2) 3 Mark

5(c) Award marks as indicated

$(41 246) (3)W

(3)
W

$15 000 + $76 224 (of) – $78 470 (1of) -$(42 000+12 000)(1)
= $(41 246) (1of)

Additional guidance
Correct answer only scores 3 marks.
No specific layout required.

Question Answer (AO3) 2 Mark

5(d) Award 1 mark for identification and 1 mark for justification

It enables the monitoring of cash inflows and outflows (1) enabling

corrective action to be taken to avoid potential cash shortages (1).

Accept any other appropriate responses. (2)

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Question Answer (AO1) 2 Mark
5(e) Award 1 mark for each stakeholder. Maximum 2 marks

• owners (1)
• managers (1)
• suppliers (1)
• customers (1)
• employees (1)
• trade associations (1)
• government (1) (2)
• investors (1)
• providers of external finance (1)
• competitors (1)
• local community (1)
• trade union (1)

Accept any other appropriate responses.

(Total for Question 5 = 18 marks)

TOTAL FOR PAPER = 100 MARKS

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