2022 SMSS 4E5N PRELIM P2 with ANS

ST. MARGARET’S SECONDARY SCHOOL Preliminary Examinations 2022 CANDIDATE NAME CLASS REGISTER NUMBER PRINCIPLES OF ACCOUNTS Paper 2 Secondary 4 Express / 5 Normal (Academic) 7087/02 29 August 2022 2 hours Additional Materials: Writing papers READ THESE INSTRUCTIONS FIRST Write your name, class and index number on all the work you hand in. Write in dark blue or black pen on both sides of the paper. Do not use staples, paper clips, highlighters, glue or correction fluid. You may use an approved calculator. Answer all questions. The businesses described in this question paper are fictitious. Where the columnar format is used, the running balance column should be updated for the first and last entries. Where applicable, the balance should be brought down to the next financial year. All calculations must be shown adjacent to the answer. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. The total of the marks for this paper is 60. For Examiner’s Use 60

2 This document consists of 5 printed pages and a blank page. Answer all questions. 1 Infocom Pte Ltd is a company providing poster design services. The following balances were extracted from the books on 31 May 2022. $ Share capital, 70 000 ordinary shares 210 000 Retained Earnings, 1 June 2021 45 930 Bank Loan 80 000 Fixtures and fittings 130 000 Motor vehicles 84 000 Accumulated depreciation: Fixture and fittings 52 000 Motor vehicles 15 960 Cash at bank 215 702 (Dr) Discount allowed 2 250 Trade receivables 170 000 Trade payables 44 590 Insurance expense 2 550 Salaries expense 40 000 Design fee revenue 188 450 Utilities expense 13 840 Motor vehicles repair 3 788 Rent income 17 000 Allowance for impairment of trade receivables 8 200 Additional information: (i) Commission income of $1 700 was earned but not yet collected. (ii) Insurance expense had been paid for 15 months up to 31 August 2022. (iii) Motor vehicle repairs of $800 had been incorrectly debited to the utilities expense account. (iv) The bank loan was obtained on 1 June 2021 and will be repaid equally over 10 years. Interest on loan is charged at 5% per annum. (v) Fixtures and fittings are depreciated at 20% per annum on cost. (vi) Motor vehicles are depreciated at 10% per annum using the reducing balance method. (vii) The business reviewed its trade receivables and decided that 3% of the outstanding balance may be uncollectible. (viii) The company declared a dividend of $0.13 per share. The dividend will be paid on 3 November 2022. REQUIRED: (a) Prepare the statement of financial performance for the year ended 31 May 2022. [9] (b) Prepare the statement of financial position as at 31 May 2022. [11] [Total 20m]

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