GESS_5NA Prelim P2 2023_sharing

1 GESS S5NA POA P2 PRELIM 2023 LSY7087/02/A/S/2023 Answer all questions.1The following balances were extracted from the books of KVG Pte Ltd at the end of the financial year on 31 December 2022.$Fixtures and fittings at cost32 000Accumulated depreciation of fixtures and fittings9 600Motor vehicles at cost120 000Accumulated depreciation of motor vehicles43 200Sales revenue792 115Sales returns5 935Cost of sales576 026Inventory60 164Wages and salaries110 987Commission income13 265Insurance5 635Utilities3 263Discount received3 150Trade receivables54 800Allowance for impairment of trade receivables3 890Cash at bank5 000Trade payables12 000 6% Bank loan repayable 202635 000Issued share capital, 100 000 ordinary shares50 000 Retained earnings, 1 January 202211 590Additional information on 31 May 20231Insurance, $3 000, was prepaid.2Commission income, $21 200, had not been received.3The allowance for impairment of trade receivables is to be maintained at 6% of trade receivables.4Fixtures and fittings are to be depreciated at 10% per annum using the straight-line method.5Motor vehicles are to be depreciated at 20% per annum using the reducing-balance method.6Loan from the bank was obtained on 1 July 2022 and to be repaid equally over five years.7Interest on the bank loan for the year to 31 December 2022 had not yet been paid. REQUIRED(a)Prepare the statement of financial performance for the year ended 31 December 2022. [10]

2 GESS S5NA POA P2 PRELIM 2023 LSY7087/02/A/S/2023 (b)Prepare the statement of financial position as at 31 December 2022. [10][Total: 20]

3 GESS S5NA POA P2 PRELIM 2023 LSY7087/02/A/S/2023[Turn over 2Samuel runs an interior design business. The business has a financial year which ends on 31 December each year. He provided the following information about his business for the years 2020 to 2022. 31 December 202031 December 202131 December 2022AssetsMotor vehicles50 000100 000200 000Trade receivables40 000 90 000100 000Prepaid expenses 1 500 3 500 18 500Cash at bank 5 000 7 000-LiabilitiesTrade payables 11 000 34 00050 000Insurance payable 1 100 4 20010 020Bank overdraft- -42 025Current ratio3.84??Quick ratio3.72??REQUIRED(a)Calculate the current ratio and quick ratio of the business for each of two years ended 31 December 2021 and 2022. [4](b)Evaluate the trend in liquidity of the business over the three years ended 31 December 2020, 2021 and 2022. Use the given information and your answer to (a). [8][Total: 12]

4 GESS S5NA POA P2 PRELIM 2023 LSY7087/02/A/S/2023[Turn over

5 GESS S5NA POA P2 PRELIM 2023 LSY7087/02/A/S/2023 3Siva is a sole trader. His business buys and sells kitchen appliances. When preparing the business financial statements for the year ended 31 May 2023, he discovered the following errors: 1Siva took a kitchen appliance worth $1 000 from the business for his personal use but this had been omitted from the books. 2Insurance, $800, paid in cash had been debited t