PHSS 2022 POA 4E5N Prelim P1

NAME: ( ) CLASS: TEACHINGGROUP: MARKS /40 PEIHWASECONDARYSCHOOL PRELIMINARYEXAMINATIONS2022 SecondaryFourExpress/ FiveNormalAcademic PrinciplesofAccounts 7087/01 Paper1 13September2022 AdditionalMaterials:- 1hour READTHESEINSTRUCTIONSFIRST 1. Writeyourname,class,teachinggroupandindexnumberonallquestionpapersandanswerscripts. Writeallanswersindarkblueorblackink. Youmayuseasoftpencilforanydiagramsorroughworking. Donotusestaples,paperclips,highlighters,glueorcorrectionfluid. 2. Answerallquestions. 3. Writeallanswersinthequestionbooklet.

2 1 Cassandra is the owner of Jazz Ezz, a business that specialises in Chinese activitysetsfor children. On1July2022, therewere20setscosting$110eachintheshop. 2022Jul 4 Credit purchase of 30 activity sets fromTBTrading with 10%off the list priceof $100each. Jul 9 Returnedthe10activitysetspurchasedon4July2022duetodefects. Jul 15 Credit salesof 20activitysetstoBKindyat $200less5%discount. Jul 21 A fire broke out in the neighbouring shop. All the activity sets were damagedand could no longer be sold. The insurance company agreed to a claim of$600whichwill bepaidout on10August 2022. REQUIRED (a) Preparetheinventoryaccount for July2022. [6] _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 4. Theuseofanapprovedcalculatorisexpected,whereappropriate. 5. Youareremindedoftheneedforclearpresentationinyouranswers. 6. Thenumberofmarksisgiveninbrackets[ ] attheendofeachquestionorpartquestion. Thisquestionpaperconsistsof9printedpages.

3 _________________________________________________________________________ _________________________________________________________________________ (b) Describehowbusinessesmanageinventories. [3] _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________(c) Suggest one possible problem a business may face if it holds on to too muchinventoryonhand.[1] _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ [Total: 10marks]

4 2 Lori is the sole proprietor of Arwen Archery School. Lori has hired an inexperiencedbookkeeper for the business. Shediscoveredthefollowingerrorsat thefinancial year ended30April 2022. (i) A cheque of $2 900 received fromMatthewin full settlement of the $3 000 debthasnot beenrecorded. (ii) $420cashpaidtocredit supplier, SLAhasbeenrecordedasLSA. (iii) Again on the sale of non-current asset of $360 has been wrongly transferred tocapital at year end. (iv) Acheque of $1 280 used topayfor officerent wasrecordedasadebit tocashatbankandacredit torent expense. REQUIRED (a) Prepare the journal entries to correct the above errors. Narrations are not required.[5]_________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

5 (b) State the effect and value of the effect of errors on the profit and total assets.Completethetablebelow.[4] Error Effectsof error on Profit Total Assets (i) (ii) (iii) (iv) (c) Stateonepurposeof sourcedocumentsinabusiness.[1] _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ [Total: 10marks]

6 3 BGNMedical isaclinicthat providespaediatriccare. Thefinancial year of thebusinessendson 31 May each year. The following shows information about the medical equipment in theclinicon1June2021: Medical equipment $380000Accumulateddepreciationof medical equipment $100500 On 1 January 2022, one of the medical equipment purchased on 15 September 2019 for$25000, wassoldfor $11650whichwasbankedintotheowner’spersonal bankaccount. It isthebusiness’ policytochargeafull year’sdepreciationintheyear of purchaseandnonein the year of sale. The business depreciates medical equipment at 20%per annumusingthereducingbalancemethod. REQUIRED (a) Defineaccumulateddepreciation.[1] _________________________________________________________________________ _________________________________________________________________________ (b) State the valuation method for non-current assets in the financial statements of abusiness.[1] _________________________________________________________________________ _________________________________________________________________________ (c) Explain why the reducing balance method is a suitable method of calculatingdepreciationof medical equipment.[1] _________________________________________________________________________ _________________________________________________________________________ (d) Prepare the journal entry to record the proceeds on thesaleof non-current asset on1January2022. Narrationsarenot required.[2] _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________

7 _________________________________________________________________________ _________________________________________________________________________(e) Prepare an extract of the statement of financial performance for the year ended31May2022, showingtherelevant portions.[2] _________________________________________________________________________ __________________________________________________________