2025 Edexcel IAS-Level Accounting (XAC11) 模擬試題連答案詳解

### Working 1: Closing Inventory Valuation (IAS 2)
Cost of undamaged goods: \( £38,000 - £4,000 = £34,000 \)
Net Realisable Value (NRV) of damaged goods: \( £1,500 - £300 = £1,200 \)
Since NRV is lower than cost, the goods are valued at £1,200.
Total closing inventory: \( £34,000 + £1,200 = £35,200 \)

### Working 2: Depreciation Charges
- **Premises:** \( 2\% \times £150,000 = £3,000 \) (Admin expense)
- **Equipment:** \( 20\% \times (£60,000 - £24,000) = £7,200 \) (Distribution cost)

### Working 3: Administrative Expenses
Draft: £48,000
Less Prepayment: \( (£2,400) \)
Add Premises Depreciation: \( £3,000 \)
Add Irrecoverable Debt: \( £2,000 \)
Add Increase in Allowance for Doubtful Debts: \( £1,000 \) (calculated as \( 5\% \times [£52,000 - £2,000] = £2,500 \) required balance minus previous allowance of \( £1,500 \))
**Adjusted Admin Expenses:** \( £51,600 \)

### Working 4: Distribution Costs
Draft: £32,000
Add Accrual: \( £1,800 \)
Add Equipment Depreciation: \( £7,200 \)
**Adjusted Distribution Costs:** \( £41,000 \)

---

### (a) Statement of Profit or Loss and Partnership Appropriation Account for the year ended 31 December 2022

| | £ | £ |
|---|---|---|
| **Revenue** | | 410,000 |
| **Cost of Sales:** | | |
| Opening Inventory | 34,000 | |
| Purchases | 220,000 | |
| | 254,000 | |
| Less: Closing Inventory (W1) | (35,200) | (218,800) |
| **Gross Profit** | | **191,200** |
| **Expenses:** | | |
| Administrative Expenses (W3) | (51,600) | |
| Distribution Costs (W4) | (41,000) | (92,600) |
| **Profit for the year** | | **98,600** |
| **Add: Interest on Drawings:** | | |
| Aris | 900 | |
| Cora | 600 | 1,500 |
| | | 100,100 |
| **Less: Interest on Capital:** | | |
| Aris \( (5\% \times £80,000) \) | (4,000) | |
| Cora \( (5\% \times £60,000) \) | (3,000) | (7,000) |
| **Less: Salary to Cora** | | (15,000) |
| **Residual Profit for Share** | | **78,100** |
| **Share of Profit:** | | |
| Aris \( (3/5 \times £78,100) \) | 46,860 | |
| Cora \( (2/5 \times £78,100) \) | 31,240 | 78,100 |

---

### (b) Partners' Current Accounts

| Details | Aris (£) | Cora (£) | Details | Aris (£) | Cora (£) |
|---|---|---|---|---|---|
| Balance b/f | - | 1,200 | Balance b/f | 4,500 | - |
| Drawings | 18,000 | 12,000 | Interest on Capital | 4,000 | 3,000 |
| Interest on Drawings | 900 | 600 | Partnership Salary | - | 15,000 |
| Balance c/d | 36,460 | 35,440 | Share of Profit | 46,860 | 31,240 |
| **Total** | **55,360** | **49,240** | **Total** | **55,360** | **49,240** |
| | | | **Balance b/d** | **36,460** | **35,440** |

---

### (c) Statement of Financial Position Extract as at 31 December 2022

| **Current Assets** | £ | £ |
|---|---|---|
| Inventory (W1) | | 35,200 |
| Trade Receivables \( (£52,000 - £2,000) \) | 50,000 | |
| Less: Allowance for Doubtful Debts | (2,500) | 47,500 |
| Other Receivables (Prepayment) | | 2,400 |
| Cash and Cash Equivalents | | 14,300 |
| **Total Current Assets** | | **99,400** |
| **Current Liabilities** | | |
| Trade Payables | 28,500 | |
| Other Payables (Accrued expenses) | 1,800 | (30,300) |
| **Net Current Assets (Working Capital)** | | **69,100** |

---

### (d) Evaluation of Interest on Drawings
- **Arguments for:** Charging interest on drawings discourages partners from making excessive withdrawals of cash from the business. This helps preserve cash reserves for daily trading capital. It ensures fairness, especially if one partner makes significantly higher or earlier drawings than the other, compensating the business/partners for the lost opportunity cost of that capital.
- **Arguments against:** It can create friction and extra administrative work in calculating interest on small or frequent drawings. If drawings are necessary for living expenses and are well within the profit share, charging interest might be unnecessarily punitive.
- **Conclusion:** It is highly beneficial for Aris and Cora to continue charging interest on drawings to preserve working capital and ensure equity between the partners.

### (a) Statement of Profit or Loss and Appropriation Account (22 Marks)
- Cost of sales closing inventory calculation: **(2) Marks** (1 mark for write-down of £2,800, 1 mark for final £35,200 value).
- Gross Profit calculation: **(1) Mark** (consequential).
- Admin expenses: **(4) Marks** (1 mark for prepayment adjustment, 1 mark for depreciation of premises, 1 mark for bad debt write-off, 1 mark for correct movement in provision).
- Distribution costs: **(2) Marks** (1 mark for accrual, 1 mark for equipment depreciation).
- Profit for the year: **(1) Mark** (consequential).
- Interest on drawings (Aris & Cora): **(1) Mark** for both correct.
- Interest on capital (Aris & Cora): **(2) Marks** (1 mark each).
- Salary to Cora: **(1) Mark**.
- Residual profit: **(1) Mark**.
- Profit sharing (Aris & Cora): **(2) Marks** (1 mark each based on correct ratio applied to residual profit).
- Structure, headings, and presentation: **(5) Marks**.

### (b) Partners' Current Accounts (12 Marks)
- Opening balance b/f: **(1) Mark** (correct side for both).
- Drawings: **(1) Mark** (debit side for both).
- Interest on drawings: **(2) Marks** (1 mark each on debit side).
- Interest on capital: **(2) Marks** (1 mark each on credit side).
- Partnership salary: **(1) Mark** (credit side of Cora).
- Share of profit: **(2) Marks** (1 mark each on credit side).
- Balances c/d and b/d: **(3) Marks** (1 mark for balancing, 2 marks for showing correct b/d balances on the credit side).

### (c) Statement of Financial Position Extract (15 Marks)
- Inventory: **(1) Mark**.
- Trade Receivables (net of bad debt written off): **(2) Marks**.
- Allowance for doubtful debts deduction: **(2) Marks**.
- Other Receivables (Prepayment): **(2) Marks**.
- Cash and cash equivalents: **(1) Mark**.
- Total Current Assets: **(1) Mark** (consequential).
- Trade Payables: **(1) Mark**.
- Other Payables (Accrued expenses): **(2) Marks**.
- Total Current Liabilities: **(1) Mark**.
- Net Current Assets: **(2) Marks**.

### (d) Evaluation of Interest on Drawings (6 Marks)
- Explains the benefit of charging interest on drawings (e.g., discourages cash drain): **(2) Marks**.
- Explains alternative views or drawbacks (e.g., impact on partner relationships, administrative overhead): **(2) Marks**.
- Formulates a logical, justified conclusion based on the scenario: **(2) Marks**.

### (a) Sales Ledger Control Account & Schedule Reconciliation

**Sales Ledger Control Account**

| Details | £ | Details | £ |
|---|---|---|---|
| Draft Balance b/f | 43,500 | Contra (set-off) (Error 4) | 950 |
| Undercast Sales Journal (Error 1) | 1,200 | Irrecoverable Debt (Error 5) | 650 |
| Cash Refund (Error 3) | 400 | | |
| Omitted Invoice (Error 7) | 1,500 | Adjusted Balance c/d | 45,000 |
| **Total** | **46,600** | **Total** | **46,600** |
| **Balance b/d** | **45,000** | | |


**Statement Reconciling the Schedule of Receivables with the Sales Ledger Control Account Balance**

| | £ | £ |
|---|---|---|
| **Draft Schedule of Receivables total** | | **43,400** |
| *Add:* Return inward over-deducted correction (Patel) (Error 6) | 100 | |
| *Add:* Omitted invoice (Vance) (Error 7) | 1,500 | 1,600 |
| **Corrected Schedule of Receivables total** | | **45,000** |

*Note on Error 2:* Posting to the wrong personal account (Greer instead of Green) does not affect the total value of the schedule of trade receivables, so no adjustment is required.

---

### (b) Cash Book & Bank Reconciliation

**Updated Cash Book (Bank Column)**

| Details | £ | Details | £ |
|---|---|---|---|
| Credit Transfer (T. Wood) | 950 | Draft Balance b/f (Overdrawn) | 3,850 |
| | | Bank Charges | 180 |
| | | Supplier Payment Error (M. Vance) \( (£320 - £230) \) | 90 |
| | | Dishonoured Cheque (J. Ross) | 450 |
| Balance c/d (Overdrawn) | 3,620 | | |
| **Total** | **4,570** | **Total** | **4,570** |
| | | **Balance b/d (Overdrawn)** | **3,620** |


**Bank Reconciliation Statement as at 30 September 2023**

| | £ |
|---|---|
| **Balance as per Bank Statement (Overdrawn/Debit)** | **(4,670)** |
| *Add:* Cheques received but not yet credited (Deposits in transit) | 2,850 |
| | (1,820) |
| *Less:* Unpresented cheques | (1,800) |
| **Balance as per updated Cash Book (Overdrawn)** | **(3,620)** |

---

### (c) Evaluation of Control Accounts
- **Benefits:**
1. **Fraud and Error Detection:** They provide an independent check on the accuracy of the personal ledger accounts. Discrepancies between the control account and the subsidiary ledger signal errors or potential fraud immediately.
2. **Speed in Preparing Financial Statements:** They provide the total trade receivables and trade payables balances quickly, avoiding the need to extract and total hundreds of individual personal accounts for the Statement of Financial Position.
3. **Division of Duties:** Senior staff can manage the control accounts while junior ledger clerks handle personal accounts. This separation reduces the likelihood of collusion and enhances internal control.

- **Limitations:**
1. **Errors not revealed:** Control accounts will not detect errors of omission (where a transaction is completely left out of the books), errors of commission (posting to the wrong personal account), or errors of original entry (entering the wrong figure in the books of prime entry).
2. **Additional Administration:** Maintaining control accounts requires extra book-keeping work, which increases administrative costs for smaller businesses.

- **Conclusion:** Control accounts are extremely useful control mechanisms. Despite their inability to detect certain types of errors, they provide critical oversight and ensure the reliability of trade receivables and trade payables data.

### (a) Sales Ledger Control Account & Schedule Reconciliation (25 Marks)
- **Control Account Entries:**
- Draft balance b/f: **(1) Mark**.
- Error 1 (Undercast sales journal): **(2) Marks**.
- Error 3 (Cash refund): **(2) Marks**.
- Error 4 (Contra): **(2) Marks**.
- Error 5 (Irrecoverable debt): **(2) Marks**.
- Error 7 (Omitted invoice): **(2) Marks**.
- Balancing and adjusted balance c/d: **(2) Marks**.
- **Schedule Reconciliation Entries:**
- Draft schedule total: **(1) Mark**.
- Error 2 (No effect treatment): **(2) Marks** (1 mark for explaining why, 1 mark for correct treatment).
- Error 6 (Return inward adjustment of £100): **(4) Marks** (2 marks for calculation of £100, 2 marks for adding it to the schedule).
- Error 7 (Omitted invoice of £1,500): **(2) Marks**.
- Final reconciled total of £45,000 matches: **(3) Marks**.

### (b) Cash Book & Bank Reconciliation (20 Marks)
- **Updated Cash Book:**
- Draft overdrawn balance: **(1) Mark**.
- Credit transfer: **(2) Marks**.
- Bank charges: **(1) Mark**.
- Supplier payment error (£90 adjustment): **(3) Marks** (1 mark for calculation, 2 marks for debit/credit direction).
- Dishonoured cheque: **(2) Marks**.
- Balance c/d: **(1) Mark**.
- **Bank Reconciliation Statement:**
- Balance as per bank statement: **(1) Mark**.
- Add: Bankings not yet credited: **(3) Marks**.
- Less: Unpresented cheques: **(3) Marks**.
- Reconciled balance matches: **(3) Marks**.

### (c) Evaluation of Control Accounts (10 Marks)
- Explains benefits of control accounts (e.g., fraud prevention, quick totals, division of labor): **(4) Marks** (up to 2 points explained with 2 marks each).
- Explains limitations (errors not revealed, extra cost): **(3) Marks**.
- Formulates a balanced conclusion evaluating their utility in a business environment: **(3) Marks**.

(a) Overhead Apportionment and Re-apportionment Table:

1. Rent and rates (£24,000) apportioned by Floor Area (Ratio 12:8:2:2):
- Machining: \(£24,000 \times 12/24 = £12,000\)
- Assembly: \(£24,000 \times 8/24 = £8,000\)
- Maintenance: \(£24,000 \times 2/24 = £2,000\)
- Administration: \(£24,000 \times 2/24 = £2,000\)

2. Power (£10,000) apportioned by kWh (Ratio 6:3:1:0):
- Machining: \(£10,000 \times 6/10 = £6,000\)
- Assembly: \(£10,000 \times 3/10 = £3,000\)
- Maintenance: \(£10,000 \times 1/10 = £1,000\)
- Administration: £0

3. Indirect salaries (£30,000) apportioned by Number of Employees (Ratio 15:20:5:10):
- Machining: \(£30,000 \times 15/50 = £9,000\)
- Assembly: \(£30,000 \times 20/50 = £12,000\)
- Maintenance: \(£30,000 \times 5/50 = £3,000\)
- Administration: \(£30,000 \times 10/50 = £6,000\)

4. Depreciation (£18,000) apportioned by Value of Machinery (Ratio 12:4:2:0):
- Machining: \(£18,000 \times 120/180 = £12,000\)
- Assembly: \(£18,000 \times 40/180 = £4,000\)
- Maintenance: \(£18,000 \times 20/180 = £2,000\)
- Administration: £0

Totals before Re-apportionment:
- Machining: \(12,000 + 6,000 + 9,000 + 12,000 = £39,000\)
- Assembly: \(8,000 + 3,000 + 12,000 + 4,000 = £27,000\)
- Maintenance: \(2,000 + 1,000 + 3,000 + 2,000 = £8,000\)
- Administration: \(2,000 + 0 + 6,000 + 0 = £8,000\)

Re-apportionment of Service Departments:
- Re-apportion Administration (£8,000):
- Machining (60%): \(£8,000 \times 60\% = £4,800\)
- Assembly (40%): \(£8,000 \times 40\% = £3,200\)
- Re-apportion Maintenance (£8,000):
- Machining (75%): \(£8,000 \times 75\% = £6,000\)
- Assembly (25%): \(£8,000 \times 25\% = £2,000\)

Final Totals after Re-apportionment:
- Machining: \(£39,000 + £4,800 + £6,000 = £49,800\)
- Assembly: \(£27,000 + £3,200 + £2,000 = £32,200\)

(b) Overhead Absorption Rate (OAR) Calculations:
(i) Machining (using 6,000 machine hours):
\(OAR = £49,800 / 6,000 \text{ hours} = £8.30 \text{ per machine hour}\)
(ii) Assembly (using 4,000 direct labour hours):
\(OAR = £32,200 / 4,000 \text{ hours} = £8.05 \text{ per direct labour hour}\)

(c) Evaluation of Single Factory-wide Rate vs. Departmental Rates:
- Arguments for departmental rates: Departmental rates are much more accurate. In Machining, the processes are highly automated, meaning machine hours represent the primary driver of overhead expenditure. In Assembly, processes are manually driven, so direct labour hours are the most suitable cost driver. Using separate departmental rates ensures products absorb overhead costs in proportion to the resources they actually use.
- Arguments for single factory-wide rate: It is easier, less costly, and less complex to calculate and maintain than multiple departmental rates. It requires less detailed bookkeeping.
- Conclusion: Departmental rates should be retained because Vanguard has two distinct operations (machinery-intensive and labour-intensive). A single factory-wide rate would lead to severe product cost distortion, under-pricing or over-pricing products, which could harm profitability and competitive strategy.

(a) Apportionment and Re-apportionment Table (16 marks):
- Allocation bases correctly chosen (1 mark per overhead total row = 4 marks)
- Correct allocation of Rent & Rates (2 marks: 1 for Machining/Assembly, 1 for Maintenance/Admin)
- Correct allocation of Power (2 marks)
- Correct allocation of Indirect salaries (2 marks)
- Correct allocation of Depreciation (2 marks)
- Correct Re-apportionment of Administration (2 marks)
- Correct Re-apportionment of Maintenance (2 marks)

(b) Overhead Absorption Rates (8 marks):
- Correct formula usage for OAR (2 marks)
- Machining rate calculation: \(£8.30\) per machine hour (3 marks, 1 for method, 2 for accuracy)
- Assembly rate calculation: \(£8.05\) per direct labour hour (3 marks, 1 for method, 2 for accuracy)

(c) Evaluation (6 marks):
- 2 marks: Points in favour of departmental rates (accuracy, different cost drivers).
- 2 marks: Points in favour of a single factory-wide rate (simplicity, cost-effective).
- 2 marks: Balanced conclusion based on Vanguard's specific operational environment.

(a) Ratio Calculations:

(i) Gross profit percentage:
- Formula: \((\text{Gross Profit} / \text{Revenue}) \times 100\%\)
- 2022: \((120,000 / 480,000) \times 100\% = 25.00\%\)
- 2023: \((120,000 / 600,000) \times 100\% = 20.00\%\)

(ii) Profit for the year as a percentage of revenue:
- Formula: \((\text{Profit for the year} / \text{Revenue}) \times 100\%\)
- 2022: \((72,000 / 480,000) \times 100\% = 15.00\%\)
- 2023: \((48,000 / 600,000) \times 100\% = 8.00\%\)

(iii) Inventory turnover (times):
- Formula: \(\text{Cost of sales} / \text{Average inventory}\)
- 2022 Average Inventory: \((32,000 + 40,000) / 2 = £36,000\)
- 2022 Turnover: \(360,000 / 36,000 = 10.00 \text{ times}\)
- 2023 Average Inventory: \((40,000 + 60,000) / 2 = £50,000\)
- 2023 Turnover: \(480,000 / 50,000 = 9.60 \text{ times}\)

(iv) Liquid (acid test) ratio:
- Formula: \((\text{Current Assets} - \text{Inventory}) : \text{Current Liabilities}\)
- 2022: Current Assets - Inventory = Trade receivables £45,000 + Bank £15,000 = £60,000. Current Liabilities = Trade payables £35,000.
- 2022 Ratio: \(60,000 : 35,000 = 1.71:1\)
- 2023: Current Assets - Inventory = Trade receivables £75,000. Current Liabilities = Trade payables £55,000 + Bank overdraft £5,000 = £60,000.
- 2023 Ratio: \(75,000 : 60,000 = 1.25:1\)

(v) Trade receivables collection period (days):
- Formula: \((\text{Trade Receivables} / \text{Credit Revenue}) \times 365\)
- 2022: \((45,000 / 480,000) \times 365 = 34.22 \text{ days}\)
- 2023: \((75,000 / 600,000) \times 365 = 45.63 \text{ days}\)

(vi) Trade payables payment period (days):
- Formula: \((\text{Trade Payables} / \text{Credit Purchases}) \times 365\)
- 2022: \((35,000 / 368,000) \times 365 = 34.72 \text{ days}\)
- 2023: \((55,000 / 500,000) \times 365 = 40.15 \text{ days}\)

(b) Four reasons for the decline in the profit for the year as a percentage of revenue:
1. Reduction in the Gross Profit Margin (from 25.00% to 20.00%): This means the cost of purchases has increased and Elara Retailers did not pass this on to customers, or they discounted selling prices to generate sales.
2. Increase in Operating Expenses relative to revenue: Operating expenses grew from £48,000 (10% of revenue) in 2022 to £72,000 (12% of revenue) in 2023, showing poor cost control.
3. Slowdown in inventory management: Inventory turnover dropped from 10 times to 9.6 times, indicating capital is tied up longer in stock, leading to higher holding costs (warehousing, insurance).
4. Easing of credit terms: Receivables collection period rose from 34.22 to 45.63 days. This slow collections rate increases bad debt risk and raises administrative and collection costs, harming profitability.

(c) Evaluation:
- Liquidity Analysis: Elara's liquidity has worsened. The liquid (acid test) ratio decreased from 1.71:1 to 1.25:1, and the bank balance deteriorated from a healthy £15,000 cash balance to a £5,000 overdraft. The business is taking longer to collect from customers (45.63 days vs 34.22 days), forcing them to delay payments to suppliers (40.15 days vs 34.72 days).
- Stricter Credit Control Policies: Implementing stricter policies (e.g., credit limits, shorter credit terms, prompt payment discounts) would accelerate cash inflows, resolve the overdraft issue, and reduce credit risk. However, it might alienate customers and reverse the revenue growth (which rose from £480,000 to £600,000).
- Recommendation: Elara should adopt a balanced approach—tightening credit checks and chasing overdue debts proactively, without setting overly restrictive terms that damage sales volume.

(a) Ratios (12 marks):
- 1 mark for each correct formula.
- 1 mark for each correct pair of 2022 & 2023 calculations (6 x 2 = 12 marks total).

(b) Explanation of reasons (12 marks):
- 3 marks for each reason explained: 1 mark for identifying the financial change (e.g., GP margin decrease), 1 mark for connecting it to Elara's operational performance, 1 mark for explaining the impact on profit margin.

(c) Evaluation (6 marks):
- 2 marks: Discussion of the deteriorating liquid situation (acid test, overdraft, receivables days).
- 2 marks: Arguments for/against introducing stricter credit control (cash flow benefits vs potential sales loss).
- 2 marks: Concluding advice recommending a balanced credit control policy.

(a) Corrected Sales Ledger Control Account:

- Draft Debit Balance: £38,450
- Debit Adjustments:
- Correction of J. Miller sale journal entry (Error 1): \(£850 - £580 = +£270\)
- Correction of Sales Journal undercast (Error 7): \(+£1,000\)
- Credit Adjustments:
- Return Inwards J. Patel omitted (Error 2): \(-£420\)
- Irrecoverable debt written off J. Ward (Error 3): \(-£300\)
- Correction of discount allowed entered on wrong side (Error 4): \(-£300\) (to remove wrong £150 debit and add correct £150 credit)
- Contra entry omitted (Error 6): \(-£500\)

Calculation of corrected balance:
\(\text{Adjusted Balance} = £38,450 (\text{Dr}) + £270 (\text{Dr}) + £1,000 (\text{Dr}) - £420 (\text{Cr}) - £300 (\text{Cr}) - £300 (\text{Cr}) - £500 (\text{Cr}) = £38,200 (\text{Dr})\)

(b) Reconciliation Statement for the List of Customer Balances:

- Draft Total of Customer Balances: £36,120
- Add: Correction of J. Miller sale (Error 1): \(+£270\) (assuming the posting to personal ledger was done from the incorrect journal entry)
- Add: Correction of over-credited cash receipt (Error 5): \(+£900\) (customer credited £2,100 instead of £1,200; balance must be increased to correct)
- Add: Omitted customer debit balance (Error 8): \(+£1,410\)
- Less: Contra entry omitted (Error 6): \(-£500\)

Calculation of corrected list total:
\(\text{Adjusted List Total} = £36,120 + £270 + £900 + £1,410 - £500 = £38,200\)

(c) Evaluation of Control Accounts:
- Arguments for usefulness: Control accounts act as an independent internal check because they are kept in the General Ledger by a senior accountant, separate from the Sales Ledger. They facilitate the quick location of errors when the control account balance does not reconcile with the list of customer balances. They help prevent fraud because different staff members manage the control account and the subsidiary ledgers, making collusion necessary to commit and hide fraud. They also provide the total trade receivables and payables balances instantly for draft financial statements.
- Arguments against/Limitations: Control accounts cannot detect certain types of errors, such as errors of omission (e.g., the contra entry omitted entirely), errors of commission (posting to the wrong customer account), or errors of original entry (e.g., J. Miller sale recorded in journal as £580). If the source documents themselves contain errors, control accounts will still reconcile but contain incorrect balances.
- Conclusion: Despite these limitations, control accounts are an essential control mechanism. When combined with proper division of duties and secondary verification, they significantly improve the reliability of the accounting system.

(a) Sales Ledger Control Account (14 marks):
- Starting balance of £38,450 shown on debit side (1 mark)
- Error 1: Debit of £270 (2 marks)
- Error 7: Debit of £1,000 (2 marks)
- Error 2: Credit of £420 (2 marks)
- Error 3: Credit of £300 (2 marks)
- Error 4: Credit of £300 (2 marks)
- Error 6: Credit of £500 (2 marks)
- Correct final balance of £38,200 calculated (1 mark)

(b) Reconciliation Statement (10 marks):
- Starting balance of £36,120 (1 mark)
- Error 1: Add £270 (2 marks)
- Error 5: Add £900 (2 marks)
- Error 8: Add £1,410 (2 marks)
- Error 6: Subtract £500 (2 marks)
- Correct reconciled total of £38,200 (1 mark)

(c) Evaluation (6 marks):
- 2 marks: Explaining how control accounts act as internal checks (separation of duties, finding arithmetical errors).
- 2 marks: Limitations of control accounts (errors they cannot detect, original entry errors).
- 2 marks: Justified conclusion on their overall usefulness.