JYSS 4E5N POA PRELIM 2022 P1

This document consists of 11 printed pages and 1 blank page. [Turn over JUNYUAN SECONDARY SCHOOL PRELIMINARY EXAMINATION 2022 SECONDARY FOUR EXPRESS/ FIVE NORMAL ACADEMIC CANDIDATE NAME CLASS PRINCIPLES OF ACCOUNTS 7087/01 13 September 2022 1 hour Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your name, class and index number in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. For examiner’s use only Question number Mark 1 / 9 2 / 12 3 / 12 4 / 7 Total /40 INDEX NUMBER Paper 1

2 7087/01/4E5N/PRELIM/2022 1 Sparkling Hardware Pte Ltd provided the following account balances on 1 August 2021. Shareholders’ equity $ Share capital, 200 000 ordinary shares 500 000 Retained earnings 143 600 The financial year of Sparkling Hardware Pte Ltd ends on 31 July 2022. REQUIRED (a) Explain the following terms: (i) retained earnings ................................................................................................................................. .............................................................................................................................[1] (ii) dividends ................................................................................................................................. .............................................................................................................................[1] The following transactions took place for the year ended 31 July 2022. Date 2021 Nov 8 50 000 shares were issued at $2.50 per share. All the shares were sold and fully paid. 2022 May 15 Dividends of $0.03 per share were declared. The amount would be paid on 31 August 2022. July 31 Profit for the year was $22 790. REQUIRED (b) Prepare the journal entry to record the issuance of shares on 8 November 2021. A narration is not required. Particulars Debit $ Credit $ [2]

3 7087/01/4E5N/PRELIM/2022 [Turn over (c) Prepare the retained earnings account for the year ended 31 July 2022. Retained earnings account ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... …………………………………………………………………………………………………… …………………………………………………………………………………………………… ......................................................................................................................................... .....................................................................................................................................[3] (d) State one difference between a private limited company and a sole proprietorship. ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... ......................................................................................................................................... .....................................................................................................................................[2] [Total: 9]

4 7087/01/4E5N/PRELIM/2022 2 Funzone is a retail business selling toys and uses the First -In-First-Out (FIFO) method of costing inventory. On 1 May 2021, Funzone had 500 units of toys costing $9 900. The following transactions took place in May 2021. All transactions were paid or received by cheque. Date Quantity of toys $ Purchase of goods May 8 300 7 300 16 500 6 000 27 400 4 800 Sale of goods May 29 800 42 000 REQUIRED (a) Calculate the total cost of sales for the month ended 31 May 2021. ........................................................................................................................................ ....................................................................................................................................[1] (b) Calculate the gross profit for the month ended 31 May 2021. ........................................................................................................................................ ....................................................................................................................................[1] (c) State one source of non-accounting information that a business migh t use when deciding which inventory to buy. ........................................................................................................................................ ....................................................................................................................................[1]

5 7087/01/4E5N/PRELIM/2022 [Turn over On 8 June 2021, a fire broke out and destroyed some of the toys in the shop. $2 000 worth of toys was damaged. REQUIRED (d) Name and explain the accounting theory applied in valuing inventory. Theory: ............................................................................................................................. Explanation: ..................................................................................................................... .......................................................................................................................................... ......................................................................................................................................[2] (e) Complete the following table to indicate the effect of not adjusting t he da maged inventory. Place a tick (✔) in the appropriate column. Effect on Understated Overstated No effect Current asset ✔ Income Profit [2]

6 7087/01/4E5N/PRELIM/2022 Funzone and Happy Land are two similar businesses t hat are in the same industry . The following information relate to the businesses for the year s ended 31 December 2020 and 2021. Funzone Happy Land Year ended 31 Dec 2020 31 Dec 2021 31 Dec 2020 31 Dec 2021 Rate of inventory turnover 17 times 20 times 17 times 15 times Days sales in inventory 21.47 days 18.25 days 21.47 days 24.33 days REQUIRED (f) Evaluate on the inventory management for both businesses for both years. .......