Anderson Sec Prelim 2022 P2 - Answer Scheme

Setter: Mdm June Liau O ANDERSON SECONDARY SCHOOL Preliminary Examination 2022 Secondary Five Normal Academic CANDIDATE NAME: ANSWER SCHEME CLASS: / INDEX NUMBER: PRINCIPLES OF ACCOUNTS Paper 2 7087/02 26 August 2022 2 hours No Additional Materials are required. READ THESE INSTRUCTIONS FIRST 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 the questions. The number of marks is given in brackets [ ] at the end of each question or part question.

2 PRELIM 5NA POA 2022 7087/02 This document consists of __ printed pages and ___ blank pages. Answer all questions. Qn 1 (a) Xin Yi Pte Ltd Statement of financial performance for the year ended 31 March 2022 $ $ Sales Revenue 184 470 Less: Sales Returns 11 000 Net Sales Revenue 173 470✔ Less: Cost of Sales 78 050 Gross Profit 95 420✔ Add: Other Income Discount Received 3 850✔ 99 270 Less: Other Expenses Impairment loss on inventory 1 100✔ Wages expense (-4400) 26 400✔ Depreciation of motor vehicle [15%X (152000-50000)] 15 300✔ Impairment loss on trade receivables [5250 – (5000- 3500)] 3 750✔ Motor vehicle expenses 12 000 Interest on loan 8 000✔ Discount allowed 2 050✔ Rent expense 6 000 74 600 Profit for the year (OF✔) 24 670 [10]

3 PRELIM 5NA POA 2022 7087/02 (b) Xin Yi Pte Ltd Statement of financial position as at 31 March 2022 Assets $ $ $ Non-Current Assets Cost Accumulated Depreciation Net Book Value Motor vehicles 152 000 65 300 86 700✔ Total non-current assets 152 000 65 300 86 700 Current Assets Trade receivables (-3500) 105 000✔ Less: Allowance for impairment of trade receivables 5 250✔ 99 750 Inventory 89 000✔ Prepaid wages 4 400✔ Cash at Bank (+20000) 71 200✔ Total current assets 264 350 Total Assets 351 050 Shareholders’ Equity Issued share capital (+20000) 180 000✔ Retained earnings (36870+24670-9000) 52 540✔ Total shareholders’ equity 232 540✔ Non-Current Liabilities Long-term Borrowings 50 000 Current Liabilities Trade Payables 59 510 Dividend payable 9 000✔ 68 510 Total equity and liabilities 351 050 [10] (c) Two purposes of internal controls are : Safeguard assets of the business

4 PRELIM 5NA POA 2022 7087/02 Ensure that business transactions are recorded accurately Comply with laws and regulations. Detect fraud (Any 2) [2] [Total: 22] Qn 2 (a) Liquidity refers to the ability of the business to convert current assets into cash to pay current liabilities. Or Liquidity measures the ability of t