Integrated Accounting System Sage 50 Accounts Republic of

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Integrated Accounting System Sage 50 Accounts

Republic of Ireland

Exam Paper 2020/2021 Kind Kittens Pet Supplies Limited

Sage 50 Accounts (ROI) – Integrated Accounting Systems

Accounting Technicians Ireland

2nd Year Examination: Exam Paper 2020/2021

Paper: IAS Sage 50 Accounts (Republic of Ireland)

INSTRUCTIONS TO CANDIDATES

PLEASE READ CAREFULLY

For candidates answering in accordance with the law and practice of the Republic of Ireland. All names and addresses mentioned are entirely fictitious. This examination paper is copyright and may not be reproduced. Examination Procedures:

1. Download the setup information i.e. the folder titled “Setup Exam material” and save the

folder to your desktop.

2. Ensure that you have created a folder, e.g. on your desktop, and on completion of the

requirements of this paper ensure that a backup of your Sage Payroll, Sage 50 Accounts

and Excel data is saved into this folder.

3. Ensure that all requested reports (Payroll, Accounts and Excel) have been produced in

PDF format and uploaded to Moodle for grading.

It is the candidate’s responsibility to ensure that all work is saved and submitted as required above.

Accounting Technicians Ireland cannot be held responsible for any marks lost as a result of

examination procedures not being completed correctly.


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START OF EXAM PAPER

Company Information: Business Name: KIND KITTENS PET SUPPLIES LTD

Address: Unit 7, Newtown Business Park, Newbridge, Co. Kildare

Telephone: 045- 493 796

E-mail: [email protected]

VAT Reg. No.: IE-0305642Q

Employer Reg. No.: IE-0305642Q

Directors: Ms. Deborah Colt and Mr. Edward Bear

Business: Wholesale Suppliers of Pet food, Pet care & related products.

Business Profile:

The majority of Kind Kittens Pet Supplies Ltd.’s sales are on credit with some cash sales. The Company is registered for VAT. VAT is charged on sales at the standard rate of 23%. The company accounts for VAT on a Sales Invoice basis.

The accounting year of Kind Kittens Pet Supplies is July to June.

Assume that today is the 3rd of October 2020 and you have recently been employed as the

company’s accounting technician. As part of your duties you will be responsible for the administration of the payroll system and the preparation of the monthly management accounts. There are currently five employees paid on a monthly basis and all employees receive payment on a ‘back month’ basis. The company operates control accounts for Net wages (n/c 2220) and for all Payroll taxes (n/c 2210).

A draft set of accounts up to 30th September 2020 were produced by your predecessor using Sage 50 Accounts. You are aware that there are some additional entries still to be posted and there are a few changes suggested by the directors before finalising the management accounts.

_______________________________________________________________________________ Section A – Payroll: Log in to Sage Payroll 2020 and restore the setup Sage Payroll dataset from the folder “Setup Exam Material”. (The user name is USER1, the payroll name is ATI, and both passwords are PASS). You have been advised that (unless stated otherwise) all employees are entitled to 1.67 days holidays per month worked and on average an employee will work 260 days in a year. You are not required to change the company name or to adjust the company narrative.

Requirements:

1. Update the payroll period to September 2020 and record all payroll information provided below, setting up any new pay elements that may be required. You are to assume all other employees NOT mentioned below, but on the payroll of the company, earned their usual monthly salary value.

(1 Mark)


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2. Set yourself up as a new employee inserting the word “IAS” in the first name field of the new

PPS Number: 2604621R Date of Birth: 12/04/1982

Tax Status: Cumulative Monthly Tax Credit: €275 p/m

Monthly SRCOP: €2,941.67 Monthly USC Cut-off Point 1: €1,001

Monthly USC Cut-off Point 2: €1,707 Monthly USC Cut-off Point 3: €5,837

(2 Marks)

2. Edward Bear travelled 875 business kilometres in September, bringing his total business kilometres in 2020 to 6,060. He is to be reimbursed for this expense based on current civil service rates (refer to table below) assuming engine capacity is more than 1,500cc. Calculate the appropriate value for reimbursement and update the payroll accordingly.

Distance Bands Engine Capacity up to 1200cc

Engine Capacity 1201cc to 1500cc

Engine Capacity 1501cc and over

Band 1 0 – 1,500 km 37.95 cent 39.86 cent 44.79 cent

Band 2 1,501 – 5,500 km 70.00 cent 73.21 cent 83.53 cent

Band 3 5,501 – 25,000 km 27.55 cent 29.03 cent 32.21 cent

Band 4 25,001 km and over 21.36 cent 22.23 cent 25.85 cent

(3 Marks)

3. Deborah Colt took unpaid leave during September for personal reasons. As she had no accrued holiday entitlement you are instructed to deduct three days of unpaid leave when processing the timesheet information for this month. Ensure that this deduction will be reported as a separate line item on her payslip.

(2 Marks)

4. Katherine Gosling has been recently tasked with making sales of a new product line and it was agreed that she would receive commission of 6% on any sales she makes in excess of €5,000 per month. In September 2020 she achieved total sales of €7,750. You are to create an appropriate pay element to record the calculated incentive pay and include the correct value when processing her timesheet information for September 2020.

(3 Marks)

5. Leo Griffin has decided to contribute €65.00 to the VHI scheme, administrated by Kind Kittens on behalf of employees, commencing September 1st 2020. Update the payroll package for this change and ensure that these optional healthcare contributions are reflected on his payslip for September 2020.

(2 Marks)

6. When all time and pay has been recorded for September 2020, you should produce the Gross to Net report and the Control Summary report as PDFs. These reports should be uploaded to Moodle for grading purposes. Please also ensure that you backup the Sage Payroll dataset and retain this information carefully, until further notice.

(2 Marks)

Section A Total: (15 Marks)

employee record and completing the surname field with the word “Candidate”. You commenced employment on Tuesday 1st September 2020. Your hourly rate has been agreed at €12.50 and you are contracted to work a standard of 180 hours per calendar month. Any additional hours worked will be paid at €18.75 per hour. You worked a total of 225 hours in September and you may assume that you are paid by cheque. You are instructed to manually create the new employee record using the details shown below and should ensure that the employee is included inthe payroll calculations for September.


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CREDIT NOTE

To: KIND KITTENS PET SUPPLIES LTD Unit 7, Newtown Business Park, Newbridge, Co. Kildare

Qty Details Unit Price

Net Amount

VAT Rate

VAT Amount

2 Kitten Kibble 10kg pack 153.55 307.10 23% 70.63

Credit issued in respect of our doc ref: SI1052 Net Amount: 307.10

VAT: 70.63

Gross Amount: 377.73

Section B - Integrated Accounts and Double Entry:

Login to Sage 50 Accounts and restore the Sage 50 Accounts dataset for Pet Supplies Ltd from the folder “Setup Exam Material”. (The password is ATI).

Requirements:

1. Adjust the company name so it reads: “Kind Kittens”.

(1 Mark)

2. Post the salary journal for September 2020 using the information you produced in Section A.

(5 Marks)

(2 Marks)

4. Post, and allocate, the purchase credit note shown below as received from All Animal Supplies Ltd:

(2 Marks)

5. The following business expenses were paid personally by the director, Deborah Colt. Enter the appropriate adjustments in Sage 50 Accounts to reflect the expense incurred on each date, and outstanding values due.

Date Details Analysis Net VAT Total

€ € €

15/09/2020 Rail Ticket Travelling 55.00 0.00 55.00

(3 Marks)

All Animal Supplies Ltd 7 Beach Road, Bray, Co. Wicklow

VAT No: 7568942J

Credit Note Number: SC1052

Date: 17th September 2020

3. On September 12th Cat’s Pyjamas Animal Clothes Ltd. ordered and received 10 units of ‘The Cat’s Meow Kitten Treats’, at the usual Sales price. Using a plain paper invoice layout, you are instructed to generate and post a Sales invoice for this Customer, dated 12th September 2020, and numbered 2060. The created invoice should be produced as a PDF and uploaded using the facility at the bottom of this screen.

25/09/2020 Stamps Postage & Carriage 80.00 0.00 80.00


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6. The company took out a new 5-year business loan with ‘My Lovely Horse Lending PLC’ on

September 1st 2020 in order to support the purchase of new production equipment. The amount

required for borrowing has been agreed at €85,500 and the bank will be charging interest of €7,545

in total, which will be charged on a monthly basis over 5 years. Assuming that loan interest accrues

evenly over the life of the loan, and that monthly repayments have been agreed, you are required

to:

(i) Create a new bank record for ‘My Lovely Horse Lending Plc’ in Sage 50 Accounts and lodge / transfer the funds to Pedigree Bank Plc at the date of drawdown i.e. 1st September 2020.

(3 Marks)

(ii) Calculate, set up and post an appropriate recurring journal for the monthly loan

repayment starting on September 2nd 2020 and to be processed monthly.

(3 Marks)

(iii) Calculate, set up and post an appropriate recurring monthly journal to charge the

loan interest to the Profit and Loss Account on the same date as (ii) above

(3 Marks)

7. Assuming that VAT does not apply, you are instructed to post the details of the following capital

acquisition:

(3 Marks)

[email protected]

Typewritten text

£


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8. Enter the following supplier payment which was sent by post on September 30th. This represents

payment of invoice PREI127 and you should write off any payment discrepancy to discount received:

Cheque No: 500301

Date: 30/09/2020

Pay: Prestige Pet Food Company

One thousand, two hundred & five euro only

€ 1,205.00

90-17-56 65189241

(2 Marks)

9. On 15th September 2020, the personal circumstances of the director, Deborah Colt, meant that she

need to withdraw money from the limited company. As the relevant nominal ledger account showed

a credit balance at that date, it was deemed appropriate that she could withdraw €5,000 of her

outstanding loan balance and a transfer was made from the Thoroughbred Deposit account on that

date. Ensure that this transaction is properly recorded in Sage 50 accounts.

(3 Marks)

10. Enter any amounts from the attached bank statement (refer to Appendix 1) that may not have been recorded in Sage 50 Accounts, and generate the Bank Reconciliation Report as a PDF (using the Report facility available in the Bank Reconciliation Window). This report should be uploaded, along with your reports, to Moodle for grading purposes. When the exercise is complete you are required to reconcile the cashbook to the bank statement for September 2020.

(6 Marks)

11. Provide for depreciation for the period based on the following fixed assets depreciation policies:

• Plant and Equipment – 10% straight line

• Furniture and Fixtures – 20% p.a. straight line

• Office Equipment – Across 3 years, straight line

• Motor Vehicles – 20% p.a. reducing balance

• Leased Assets – pro rata over the life of the lease

The depreciation expense for each relevant category of fixed assets should be posted to the existing separate nominal ledger accounts in the Profit and Loss. Apart from leased assets, it is company policy to charge a full year’s depreciation in the year of acquisition with no deprecation in the year of disposal.

(9 Marks) 12. Kind Kittens Pet Supplies have been advised that some customers are experiencing trading difficulties

and the directors are concerned about potential bad debts. Having reviewed the circumstances, they have decided to make a general provision for 5% of all gross Receivable balances. You are required to record an appropriate adjustment, dated 30th September 2020, to reflect the potential expense and to report a prudent net asset balance for Receivables.

(3 Marks)

13. The physical stock-take performed on 30th September 2020 identified that the closing stock value on

that date was €24,200. Record the accurate values for Opening and Closing Stock in the P&L for

September, and ensure that the correct value is reported in the Balance Sheet at 30th September

2020.

(3 Marks)

Kind Kittens Pet Supplies Limited Ms Deborah Colt


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14. There is a balance of €200.00 in the suspense account due to an error made when the August

management accounts were prepared. The original transaction was a cheque payment, made from the current account, for a subscription due for the October ‘20 to December ‘20 period. However, as the nature of the payment had not been identified it was debited to the suspense account incorrectly. You should post an adjustment, dated 30th September 2020 to clear down this balance from the suspense account and to correct the final prepayment balance.

(3 Marks)

15. The accountants have performed a preliminary tax computation and have advised that a provision should be made to allow for the Corporation Tax charge for the accounting year at hand. On the assumption that the estimated charge for July – September 2020 is €2,750 you are asked to record the probable expense and potential liability for the first three months of the accounting year.

(2 Marks)

16. Generate a detailed audit trail (in landscape format) in PDF format, starting at transaction number

299 and ending at the last posting number in Sage 50 Accounts. This report should be uploaded, along with your other reports, to Moodle for grading purposes.

Please note: Failure to submit the correct audit trail may result in a ZERO grade in Section B: Accounts.

(4 Marks)

You are required to backup the completed Sage 50 Accounts dataset and you should retain this

information carefully, until further notice.

Section B Total: (60 Marks)

_______________________________________________________________________________


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Section C - Excel: Export the Profit and Loss Report for July 2020 (i.e. Period 1) from the Sage 50 Accounts dataset into an Excel worksheet and save the file as an Excel workbook. You have been asked to prepare a month-by-month budget for the 3 months from 1st October 2020 to 31st December 2020 based on the actual figures for July 2020.

Requirements:

1. Prepare the source information for July 2020;

• All nominal account descriptions should appear in column A,

• Ensure all the figures for July 2020 appear in column B, and delete any YTD information,

• Column B should be titled “Jul-20”,

• Insert narratives for total sales, total purchases and total overheads,

• Ensure that there is a blank row inserted after each ‘total’ line.

(3 Marks)

2. Based on the information shown below, you are asked to indicate the anticipated variances for Oct

- Dec in Column C. These should be shown as a percentage (e.g. +/- 5%) or fixed value (e.g. +/- €). In columns D-F you should then prepare the month-by-month budget for Oct-Dec 2020, calculating your formulas using the variances indicated in Column C. Ensure each column is appropriately named.

• In consideration of pre-Xmas demand, it is anticipated that all Sales and Cost of Sales Purchases will increase by 5% from November onwards (the increased values should be indicated using fixed cell referencing*),

• Stock adjustments should be included but left unchanged,

• Due to an increase in personnel, all payroll costs should be forecasted to include a 5% increase effective from the start of October 2020,

• All other expenses increased by 3% in August 2020 and it’s expected that these increases will hold for the foreseeable future, with the exception of rent & rates and depreciation,

• Further to a review of rent & rates, a 15% decrease is to be applied by the Landlord from December onwards,

• Depreciation should be based on the July 2020 figures, while also taking into account the additional depreciation for any new asset additions outlined in Section B. (Refer to the company’s fixed assets depreciation polices in Section B). Indicate any additional charges on a new line in the budget spreadsheet,

• The monthly loan interest (as indicated in Section B) should be accounted for in the budget for Quarter 2.

* Where no specific instruction is given, you may use any appropriate Excel formula of your choice.

(7 Marks) 3. In the same worksheet, in a new column:

• Insert formulas to show the total value for the 3 months ending 31st December 2020 for all nominal accounts, and name this column “Total Budget Values”.

(2 Marks)

• Insert formulas to show the updated totals for gross profit and net profit in each month and in the total values column.


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4. Format the Workbook in the following way, ensuring all information is visible:

• All text and figures should be in Tahoma style,

• Format all monetary values applying comma style and showing no decimal places,

• Apply bold font and a Top and Bottom border to all gross profit and net profit information,

• Insert today’s date as a footer on the right section,

• Title the budget spreadsheet using a Word Art saying “Quarter 2 Budget Projections”.

(5 Marks)

5. You are required to present a 2-D Pie chart, according to the following parameters:

• The Pie Chart should be linked to the narrative descriptions and total budget values for the

overhead account from ‘Rent & Rates’ to ‘Bank Charges and Interest’,

• The Pie Chart should be placed in a New Worksheet,

• The nominal code descriptions should be presented in a Legend placed to the left of the chart,

• Ensure that the Chart is titled “Quarter 2 Budget Projections”.

(4 Marks)

6. Generate the following reports as PDFs, ensuring that each report is in Landscape orientation and is scaled to fit one page only:

These reports should be uploaded, along with your other reports, to Moodle for grading purposes.

(4 Marks)

On completion of your activity ensure that you have saved your Excel Workbook, and retain this information carefully until further notice.

Section C Total: (25 Marks)

TOTAL EXAM MARKS: (100 MARKS)

CHECKLIST FOR UPLOADING PDF REPORTS

Payroll • Gross to Net Report

• Control Summary Report

Accounts

• Sales Invoice

• Bank Reconciliation Report

• Detailed Audit Trail

Excel • Budget Worksheet x 2

• The budget worksheet showing figures as normal,

• The budget worksheet adjusted to show formulas instead of figures,

• The Pie Chart.

• Pie Chart Report

4 Barrow Road, Naas , Co Kildare

A/C Name: Kind Kittens Pet Supplies Ltd

Kind Kittens Pet Supplies Ltd IBAN: IE42 PEFB 9017 5665 1892 41

Unit 7, Newtown Business Park Statement Date: 30-Sep-20

Newbridge

Co. Kildare

Your Current Account Statement

Date Transaction Details Debit Credit Balance

01/09/2020 BALANCE FORWARD 60,012.62

EFT - WIL01 7,134.49

LOAN - My Lovely Horse Lending Plc 85,500.00 138,378.13

02/09/2020 DD - Rent to landlord 1,750.00

Loan Repayment 1,550.75 135,077.38

04/09/2020 DD - VOD01 72.51

EFT - Insurance Co 3,750.00 131,254.87

07/09/2020 Cats Pyjamas 5,940.29 137,195.16

10/09/2020 S/O - ALL01 308.67 136,886.49

12/09/2020 EFT - WIL01 4,836.91 132,049.58

15/09/2020 DD - ELE01 346.18

EFT - PRE01 859.46

Dogs Dinner PFC 29,958.62

PB Plc Q3 Fees 25.25 160,777.31

20/09/2020 S/O - ALL01 1,058.60

GG-August 12,288.99

ROS - VAT3 3,687.08 163,599.21

24/09/2020 Dogs Dinner PFC 8,020.22 171,619.43

30/09/2020 Banking Online Monthly Charge 15.00

EFT - August Wages 13,574.28 158,030.15

CLOSING BALANCE 158,030.15

DD - VHI Scheme 65.00 171,942.70

23/09/2020 ROS - Payroll Taxes Due 4,656.41

[email protected]

Text Box

APPENDIX 1

These pages are supplied to facilitate Workings.

Students should note that no marks will be awarded for workings shown on these pages.

END OF EXAM PAPER

These pages are supplied to facilitate Workings.

Students should note that no marks will be awarded for workings shown on these pages.

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Integrated Accounting System Sage 50 Accounts Republic of