Mark Scheme (Results)

Summer 2021

Pearson Edexcel GCSE International GCSE

In Accounting (4AC1)
Paper 02 Financial Statements
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Summer 2021
Question Paper Log Number P66469A
Publications Code 4AC1_02_2106_MS
All the material in this publication is copyright
© Pearson Education Ltd 2021
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.
Leo
Manufacturing account for the year ended 31 March 2021
$ $
Opening inventory - raw materials 56 000
Purchases 167 500
Returns outwards (17 500)
150 000 (1)
Carriage inwards 1 300 (1)
Closing inventory - raw materials (44 000) (1fb)
Cost of raw materials consumed 163 300 (1of)+W
Direct wages 82 400 (1)
Royalties 15 000 (1)
Prime cost 260 700 (1of)+W
Depreciation - plant and machinery 32 000 (1)
Depreciation - premises 37 500 (1)
Indirect expenses 79 500 (1)
Insurance 8 500 (1)
Electricity 13 500 (1)
Indirect wages 85 000 (1)
256 000
516 700
Opening inventory - work in progress 64 000
Closing inventory - work in progress (68 400)
(4 400) (1fb)
Production cost 512 300 (1of)+W

(15)

Additional Guidance

fb = For both opening and closing inventories.

of = own figure. Accuracy mark can be awarded where the candidate’s answer does not match
the mark scheme, though is accurate based on the correct method.

(1of) +W mark is only awarded if both figure and words are present.
Question Answer Mark
Number
1(b) Award marks as indicated.

Leo
Income statement for the year ended 31 March 2021
$ $
Revenue 630 000
Returns inwards (12 000)
618 000 (1)
Cost of sales
Opening inventory - finished 108 000
goods
Production cost 512 300 (1of)
Closing inventory - finished (112 000) (1fb)
goods
(508 300) (1of) + W
Gross profit 109 700 (1of) +W
(5)

Additional Guidance

Award revenue $ 618 000 1 mark.

fb = For both opening and closing inventories.

of = own figure. Accuracy mark can be awarded where the candidate’s answer does not match the
mark scheme, though is accurate based on the correct method.

(1of) +W mark is only awarded if both figure and words are present.
Question Answer Mark
Number
1(c) Award 1 mark for stating whether Leo is correct or
incorrect with justification and up to 4 marks for
supporting evidence.

Sample answer

Leo is incorrect as both ratios have decreased indicating a

deterioration in profitability (1)

This is supported by:

• the decrease in gross profit percentage which may be
due to a lower selling price (1) or an increase in cost
price (1)

• the decrease in return on capital employed percentage

which may be due to Leo introducing additional capital
(1) or an increase in expenses (1). (5)

Additional Guidance

The sample answer is not definitive. Award marks for appropriate comments relating to a
decrease in profitability but NOT referenced to liquidity.

(Total for Question 1 = 25 marks)

Question Answer Mark
Number

2(a) Award marks as indicated.

Amira
Statement of affairs at 1 April 2020

Assets $ $ $
Non-current assets Cost Accumulated Carrying
depreciation value
Land 31 670 - 31 670
Motor vehicle 40 000 19 520 20 480
71 670 19 520 52 150
(1)
Current assets
Inventory 21 500
Trade receivables 34 500
Other receivables 1 500
Cash at bank 1 350
58 850
Total assets 111 000
(1)
Equity and liabilities
Total equity 79 000
(1of)
Current liabilities
Trade payables 32 000
(1)
Total equity and 111 000
liabilities

(4)
Additional Guidance

of = own figure. Accuracy mark can be awarded where the candidate’s answer does not match
the mark scheme, though is accurate based on the correct method.
Question Answer Mark
Number
2(b) Award marks as indicated.
Amira
Statement of Affairs at 31 March 2021
Assets $ $ $
Non-current assets Cost Accumulated Carrying
depreciation value
Land 31 670 - 31 670
Motor vehicle 50 000 10 000 40 000
(1) (1of)
81 670 10 000 71 670 (1of)
Current assets
Inventory 24 000
Trade receivables 35 000
(1)
Provision for (1 750) 33 250
irrecoverable debts (1of)
57 250
(1of)
Total assets 128 920

Equity and liabilities

Total equity 56 270
(1of)
Non-current liabilities
Loan 30 000
(1)
Current liabilities
Loan 10 000
(1)
Trade payables 31 000
Bank overdraft 1 650
(1)
42 650
Total liabilities 72 650
Total equity and 128 920
liabilities (1of) (11)
Additional Guidance of = own figure. Accuracy mark can be awarded where the candidate’s answer
does not match the mark scheme, though is accurate based on the correct method.
Question Answer Mark
Number
2(c) Award 1 mark for each correct figure plus 1 mark for all correct
dates (any format) and details.

Equity Account
Date Details $ Date Details $

31 Drawings 30 000 1 April Balance b/d 79 000

March (1) (1of)
Balance 56 270 31 Income 7 270
c/d March statement/ (1of)
profit for the
year
86 270 86 270

1 April Balance b/d 56 270

(1of) (5)
Additional Guidance

of = own figure. Accuracy mark can be awarded where the candidate’s answer does not
match the mark scheme, though is accurate based on the correct method.

Accept split figures for drawings.

Question Answer Mark
Number
2(d)(i) Award 1 mark for identifying the concept plus 1 mark for
development.

Sample answers

Prudence (1)

Introducing a provision for irrecoverable debts, ensures that her

profit for the year/trade receivable are not overstated (1).

OR

Accruals/matching (1)

Introducing a provision for irrecoverable debts, ensures that the

amount of sales which are unlikely to be paid are regarded as
an expense in a year of sale (1). (2)
 Question Answer Mark
Number

2(d)(ii) Award 1 mark for identifying the concept plus up to 2 marks for
development.

Sample answers

Accruals/matching (1)

This method is used for motor vehicle that have lower maintenance
cost / greater benefits achieved in the earlier years (1) which ensures
that the revenue of the accounting period is matched against the cost
of the same period (1).

OR

Consistency (1)

Once a method has been selected it must be used consistently from

one accounting period to the next (1) to ensure comparability of
financial results (1). (3)

(Total for Question 2 = 25 marks)

TOTAL FOR PAPER = 50 MARKS

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