Tampines Sec 4E Prelim 2023 Paper 2 (Questions Answers)

TAMPINES SECONDARY SCHOOL Secondary and ( ) NAME CLASS REGISTER NUMBER READ THESE INSTRUCTIONS FIRST An answer booklet will be provided with this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional answer paper ask the invigilator for a continuation booklet. Answer all questions. The use of an approved calculator is allowed. The businesses described in this question paper are entirely fictitious. The number of marks is given in brackets [ ] at the end of each question or part question. For Examiner’s use This document consists of 7 printed pages © TPSS/7086/02/2023/SEC4NA/PRELIM [Turn over

2 Answer all questions. 1 Samy Pte Ltd runs a cleaning services business. The following account balances were extracted from the books at the end of financial year on 31 March 2023. $ Service fee revenue 64 200 Wages and salaries 17 900 Rent expense 12 400 Utilities 5 000 Motor vehicles expenses 1 380 General expenses 4 350 Commission income 800 Cash at bank 4 100 Equipment 17 400 Motor vehicles 67 000 Accumulated depreciation: Equipment 1 800 Motor vehicles 12 000 Allowance for impairment of trade receivables 430 Trade receivables 9 500 Trade payables 7 200 8% bank loan (loan was taken on 1 April 2022) 25 000 Share capital, 20000 ordinary shares 20 000 Retained earnings 7 600 Additional information 1 Motor vehicles are depreciated at 20% per annum on net book value. 2 Equipment are depreciated at 15% at cost. 3 At 31 March 2023: i Wages and salaries, $2700, remains unpaid. ii Commission income, $150, was earned but has yet to be received. iii Interest on loan is charged at 8% per annum, payable on 1 April 2023. 4 The allowance for impairment of trade receivables is to be maintained at 4% of trade receivables. 5 A payment of $200 by cheque for general expenses was wrongly debited to the cash at bank account and credited to the general expenses account. 6 The company declared a dividend of $0.20 per share. The dividend will be paid on 31 July 2023.

3 REQUIRED (a) Prepare the statement of financial performance for the year ended 31 March 2023. [10] (b) Prepare the statement of financial position as at 31 March 2023. [10] [Total: 20]

4 2 The business of Dannie provided the cash at bank account for the month of July 2023 as follows: Cash at bank Date Particulars Cheque # Debit Credit Balance 2023 $ $ $ Jul 1 Balance b/d 570 Dr 4 Sales revenue 1 350 1 920 Dr 7 Sally 30013 230 1 690 Dr 12 Miller 2 470 4 160 Dr 28 Ethan 480 4 640 Dr 29 Farhan 30014 2 670 1 970 Dr 30 Cash in hand 200 1 770 Dr Aug 1 Balance b/d 1 770 Dr The following bank statement was received by Dannie on 2 August 2023. Bank Statement Date Particulars Withdrawal Deposit Balance 2023 $ $ $ Jul 1 Balance b/d 1 520 Cr 5 Cheque deposit 1 350 2 870 Cr 6 Cheque no 30012 950 1 920 Cr 10 Cheque no 30013 320 1 600 Cr 12 Cheque deposit – Miller 2 470 4 070 Cr 13 Standing order – rent 1 700 2 370 Cr 14 Dishonoured cheque 2 470 100 Dr 18 Direct deposit – Tess Trading 180 80 Cr 27 Cash withdrawal 200 120 Dr 31 Interest 35 155 Dr Aug 1 Balance b/d 155 Dr Additional information: The accountant found that the bank has entered the wrong amount for the cheque number 30013 in the bank statement. (a) State two purposes of internal controls. [2] (b) Name two types of internal controls over cash other than bank reconciliation. [2] (c) Prepare the adjusted cash at bank account for the month of July 2023. [5]

5 (d) Prepare the bank reconciliation statement as at 31 July 2023. [5] [Total: 14] 3 Chen Sporting House operates a business trading in sports equipment. The following information has been provided. 30 June 2021 30 June 2022 $ $ Credit sales 125 800 134 800 Cash sales 3 800 -- Net trade receivables 9 200 7 450 It was also provided that the net trade receivables on 30 June 2020 was $10 300. REQUIRED (a) Explain two aims of a business in managing its trade receivables efficiently. [2] (b) Calculate to two decimal places, Chen Sporting House’s rate of trade receivables turnover for the years ended 30 June 2021 and 30 June 2022. [4] A competitor, Sim Sports, ha s the following rate of trade receivables turnover on 30 June 2021 and 30 June 2022. 30 June 2021 30 June 2022 Rate of trade receivables turnover 14.23 11.31 REQUIRED (c) Comment on the rate of trade receivables turnover of both businesses for both years. [6] (d) Suggest two ways Sim Sports could improve its rate of trade receivables turnover. [2] [Total: 14]

6 4 Charis started Grace Pets Café on 1 May 2022, a business to meet the needs of pet owners. The business uses the double entry recording system to record all its business transactions. The business has the following transactions in the month of May 2022. 2022 May 5 Bought sofa costing $500 on credit from Best Furnishing. May 12 Paid $480 to Best Furnishing by cheque as full settlement of account. REQUIRED (a) State the purpose for the use of a journal. [1] (b) Explain the difference between a trade discount and a cash discount. [2] (c) State the double entry for the transaction on 12 May 2022. [2] [Turn over to next page

7 Charis wants to purchase a new set of furniture to enhance the comfort of her customers. She identified two suppliers who could supply the set of furniture that meets all her requirements. Chic Furniture (overseas) Design Asia (local) Price of furniture $7800. $8300. Delivery Delivery takes three weeks from date of placing order. Delivery takes one week from date of placing order. Credit terms 30 days, 3% cash discount if settled within 7 days. 15 days, 3% cash discount if settled within 7 days. Warranty/ After-sales service Three years warranty on manufacturing defects. Repair services provided free of charge during warranty period. Supplier could attend to repair requests within seven working days. Two years warranty on manufacturing defects. Repair services provided free of charge during warranty period. Supplier could attend to repair requests within two working days. Reviews Customers have given very good reviews on the quality of workmanship of the furniture sets it supplied. All furniture sets are only available for viewing online. Customers could physically view display units of the furniture sets prior to purchase at its shop. Customers have commented that the furniture received is of a very good quality of workmanship. REQUIRED (d) Which supplier should Charis buy from? Justify your answer with three reasons. [7] [Total: 12]

8 Marking Scheme (4EX POA Prelim 2023 Paper 2) Qn Marking Points 1(a ) Samy Pte Ltd Statement of financial performance for the year ended 31 March 2023 $ $ Service fee revenue 64,200 [1] Other income: Commission income (800+150) 950 [1] Less: Other expenses Wages and salaries (17900+2700) 20,600 [1] Rent expense 12,400 ) Utilties 5,000 ) [1] Motor vehicles expenses 1,380 ) General expenses (4350+2x200) 4,750 [1] Interest expense (8%x25000) 2,000 [1] Reversal of impairment loss on trade receivables (430-9500x4%) (50) [1] Depreciation of equipment (15% x 17400) 2,610 [1] Depreciation of motor vehicles (20%x(67000-12000)) 11,000 59,690 [1] Profit for the year 5,460 OF [1]

9 1(b ) Samy Pte Ltd Statement of financial position as at 31 March 2023 $ $ $ Assets Cost Accumulate d Depreciation Net Book Value Non-current assets Equipment 17,400 4,410 12,990 Motor vehicles 67,000 23,000 44,000 56,990 OF[1] Current assets Cash at bank (4100-2x200) 3,700 [1] Trade receivables 9,500 Less allowance for impairment of trade receivables 380 9,120 [1] Commission income receivable [1] 150 12,970 Total assets 69,960 Equity and liabilities Shareholders’ equity Share Capital, 20000 ordinary shares 20,000 Retained earnings (7600+5460 [1] -4000 [1]) 9,060 29,060 Non-current liabilities Long term borrowings 25,0