2022_MSHS_Prelims_S4_POA_Paper 2_MS

POA S4 Prelim 2022 Paper 2 Mark Scheme 1(a) Spencer Pte Ltd Statement of financial performance for the year ended 30 June 2021 $ $ Sales revenue 85 800 Less: Sales returns 4 300 Net sales revenue 81 500 ✓ Less: Cost of sales 57 700 Gross profit 23 800 ✓ Add: Other income Rent income (6 000/15 x 12) 4 800 ✓ Less: Other expenses General expenses (3 600+2 700) 6 300 ✓ Salaries and wages expense (11 800 – 900) 10 900 ✓ Depreciation of office equipment (15% x 80 000) 12 000 ✓ Depreciation of motor vehicles [(20% x (105 000 – 17 000) 17 600 ✓ Interest expense (7% x 40 000) 2 800 ✓ Reversal of impairment loss on trade receivables [3% x 23 800 – 1 700] (986) 48 614 ✓ Loss for the year (20 014) ✓ [10✓ x 1m = 10m]

POA S4 Prelim 2022 Paper 2 Mark Scheme 1(b) Spencer Pte Ltd Statement of financial position as at 30 June 2021 Assets $ $ $ Non-current assets Cost Accumulated Depreciation Net book value Office equipment (5 000 + 12 000) 80 000 17 000 63 000 ✓ Motor vehicles (17 000 + 17 600) 105 000 34 600 70 400 ✓ 185 000 51 600 133 400 Current assets Trade receivables 23 800 Less: Allowance for impairment of trade receivables (3% x 23 800) 714 23 086 ✓ Cash at bank 31 500 Inventory 44 900 Prepaid wages and salaries 900 100 386 ✓ Total assets 233 786 Equity and liabilities Shareholder’s equity Share capital, 100 000 ordinary shares 140 000 Retained earnings [49 400 – 20 014 – (0.08 x 100 000) 21 386 161 386 ✓ Non-current liabilities Long-term borrowings 40 000 ✓ Current liabilities Trade payables 17 700 General expenses payable 2 700 ✓ Rent income received in advance (6 000/15 x 3) 1 200 ✓ Interest expense payable 2 800 ✓ Dividends payable (0.08 x 100 000) 8 000 32 400 ✓ Total equity and liabilities 233 786 [10✓ x 1m = 10m] [Total: 20m]

POA S4 Prelim 2022 Paper 2 Mark Scheme 2(a) Yr 1: 20% x 38000 = 7600 Yr 2: 20% x (38000 – 7600) = 6080 Total depreciation = 7600 + 6080 = $13 680 ✓ Loss on sale = 38000 – 13680 – 23700 = $620 ✓ [2m] 2(b) Journal Date Particulars Dr Cr 2021 $ $ Jun 30 Sale of non-current assets ✓ 38 000 Motor vehicles ✓ 38 000 Accumulated depreciation of motor vehicles ✓ OF 13 680 Sale of non-current assets ✓ OF 13 680 Cash at bank ✓ 23 700 Sale of non-current assets ✓ 23 700 [6m] 2(c) Jackson Enterprise Statement of financial performance for the year ended 31 March 2022 (extract) $ Less: Other expenses Depreciation of motor vehicles ✓ 20% x (38000 – 7600 – 6080) 4 864 Loss on sale of non-current asset ✓ OF 620 [2m] 2(d) According to the matching theory, expenses incurred must be matched against the income earned in the same period to determine the profit for the period. ✓ As the n