4E Damai PRELIMS 2022 P2 - Question

DAMAI SECONDARY SCHOOL Preliminary Examination 2022 CANDIDATE NAME CLASS INDEX NUMBER PRINCIPLES OF ACCOUNTS Paper 2 Secondary 4 Express / 5 Normal (Academic) Setter: Miss Cristy Lin 7087/02 26 August 2022 2 hours 60 Marks No Additional Materials are required. READ THESE INSTRUCTIONS FIRST An 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 paper, ask the invigilator for a continuation booklet. Answer all questions. The businesses described in this question paper are entirely fictitious. 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. All questions in this paper carry equal marks. This document consists of 6 printed pages. [Turn over

2 1 White House Pte Ltd has the following balances extracted from the books of its business on 31 October 2021. $ 6-Year Bank loan (repayable every 31 Dec) 60 000 Sales revenue 90 000 Cost of sales 22 000 Sales returns 4 000 General expenses 2 000 Salaries 80 900 Inventory 28 670 Trade receivables 14 000 Trade payables 7 500 Cash at bank 14 000 Rent income 11 000 Allowance for impairment of trade receivables 5 000 Motor vehicles at cost 55 000 Accumulated depreciation – Motor vehicles 11 000 Fixtures and fittings at cost 12 000 Accumulated depreciation – Fixtures and fittings 2 000 Land 140 000 Retained earnings 36 070 Share capital, 150,000 ordinary shares 150 000 Additional information 1. Inventory $7 000 was damaged and only 50% is claimable from the insurance company. This claim will be received by cheque on 12 December 2021. No records were made in the books. 2. Depreciation policy: • Motor vehicles – 10% per annum using the reducing balance method • Fixtures and fittings – 5 years using the straight-line method 3. A trade receivable owing $2 000 went bankrupt but has not been written off yet. 4. Following a review of the trade receivables, 5% of the trade receivables were estimated to be uncollectible. 5. Rent income $500 was received in advance, and commission income $700 for September 2021 was not received yet. 6. Salaries $3 300 were owing, and general expenses $150 were paid for five months ending 31 December 2021. 7. A credit purchase for goods with a list price $3 000, less 4% trade discount was debited to the inventory account and credited to the sales revenue account. 8. 50 000 ordinary shares at $1.00 each were issued and fully paid up during the year. 9. Dividends at $0.05 per share were declared and will be paid on 4 November 2021. 10. Interest on bank loan $1 800 has not been paid. REQUIRED (a) Prepare the statement of financial performance for the year ended 31 October 2021. [10] (b) Prepare the sta