4E5N Greendale POA Prelim P1 Sharing

Name:_________________________________ ( ) Class:________ This document consists of 11 printed pages. Greendale Secondary School 2022 GREENDALE SECONDARY SCHOOL Preliminary Examination 2022 PRINCIPLES OF ACCOUNTS 7087/01 SECONDARY 4 EXPRESS/ 5 NORMAL ACADEMIC 30 August 2022 Paper 1 1 hour Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your name, index number and class on all the work you hand in. 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. The use of an approved calculator is allowed. Answer all questions. The businesses described in this question paper are entirely fictitious. The number of marks is given in brackets [ ] at the end of each question or part question.

Greendale Secondary School 2 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 Answer all questions. 1 Elise owns a bicycle shop at West Coast Plaza. She provided the following information which took place during the year ended 30 June 2021. 2020 July 1 Balance in the capital account was $25 500. Aug 30 Elise withdrew $400 from the business bank account to pay for her son’s tuition. 2021 Jan 14 Elise issued a business cheque, $200, to pay for her apartment’s electricity bills. May 3 Elise contributed her personal laptop worth $800 for the shop’s use. Jun 30 Loss for the year ended 30 June 2021 was $3 000. REQUIRED (a) Prepare the capital account for the year ended 30 June 2021.

Greendale Secondary School 3 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 [5] (b) Name and explain the accounting theory which is applied to the treatment of drawings. Name: Explanation: [2] (c) Elise is thinking of changing the business structure to a private limited company. Give two advantages a company has over a sole proprietorship. [2] [Total: 9]

Greendale Secondary School 4 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 2 Mathew sells household products on credit. He sells goods to his credit customers on a 60-day credit term. The following information was provided. For the year ended 31 May 2021 $ Credit sales revenue 835 000 Credit sales returns 4 000 Cash sales 75 000 Net trade receivables as at 1 June 2020 143 000 Net trade receivables as at 31 May 2021 237 500 Additional information: The trade receivables collection period for 31 May 2020 was 75.64 days. REQUIRED (a) Calculate the trade receivables collection period for the year ended 31 May 2021. Show your answers to two decimal places. 31 May 2021 Workings Trade receivables collection period (days) [2]

Greendale Secondary School 5 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 (b) Evaluate the management of trade receivables by Mathew’s business over the two years ended 31 May 2020 and 31 May 2021. [3] On 1 June 2021, the trade receivables balance of Mathew’s business was $250 000. The business maintains an allowance for impairment of trade receivables at 5% of the trade receivables balance at the end of every financial year end. Allowance for impairment of trade receivables Date Particulars Dr ($) Cr ($) Balance ($) 2021 June 1 Balance B/d 12 500 Cr Aug 13 Trade receivables, Kenny 800 11 700 Cr 2022 May 31 Impairment loss on trade receivables 1 550 13 250 Cr (c) Explain, using a suitable accounting theory, why it is necessary for Mathew to account for allowance for impairment of trade receivables. [2]

Greendale Secondary School 6 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 (d) Interpret the entries in the allowance for impairment of trade receivables account on: (i) 13 August 2021 [1] (ii) 31 May 2022 [1] (e) State the effect on the profit for the year if allowance for impairment of trade receivables was not adjusted on 31 May 2022. [1] [Total: 10]

Greendale Secondary School 7 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 3 Jennifer sells goods to Natalie on credit. The following transactions took place in the month of March 2022. 2022 Mar 1 Balance owed to Jennifer is $6 150. Mar 13 Sold goods on credit to Natalie at a list price of $1 500, less 3% discount. Mar 15 Issued a cheque to Jennifer for the amount owed on 1 March, less 2% discount. Mar 17 Natalie returned damaged goods bought on 13 March, valued at list price $500. REQUIRED (a) Prepare Jennifer’s account in Natalie’s books for the month of March 2022. [6] (b) Explain the purpose of the discount on 13 March 2022. [1] (c) State the effect of the discount on 15 March 2022 on Jennifer’s profit for the year. [1]

Greendale Secondary School 8 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 (d) State the source document issued by Jennifer on 17 March 2022. [1] (e) Suggest a reason why Natalie purchases inventory on credit instead of paying cash for them. [1] The following balances were taken from Natalie’s books on 1 April 2021: $ Fixtures and fittings 56 000 Accumulated depreciation of fixtures and fittings 13 800 On 1 May 2021, Natalie sold one of the fixtures and fittings which cost $12 000 for $5 000 on credit to Lucas Pte Ltd. The fixtures and fittings sold was bought on 1 April 2019. On 1 January 2022, Natalie purchased fixtures and fittings and paid $13 600 by cheque. The business provides depreciation at 10% per annum using the straight line method. No depreciation is charged in the year of sale. (f) Calculate the gain or loss on the sale of non-current asset. [2]

Greendale Secondary School 9 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 (g) Calculate the depreciation of fixtures and fittings for the year ended 31 March 2022. [2] [Total: 14]

Greendale Secondary School 10 Secondary 4E5N Preliminary Examination 2022 Principles of Accounts Paper 1 4 On 1 May 2020, Leong Trading Pte Ltd obtained a bank loan of $200 000 at an interest rate of 3% per annum. The loan is to be paid equally over four years. The partial principal sum repayment and the interest are to be made on every year starting 30 April 2 021. The financial year of Leong Trading Pte Ltd ends on 31 December. REQUIRED (a) Prepare an extract of the statement of financial position as at 31 December 2020. Leong Trading Pte Ltd Statement of financial position as at 31 December 2020 (extract) [3] (b) Prepare the closing entry to record the interest expense incurred for the year ended 31 December 2021. A narration is not required. Journal Date Particulars Debit ($) Credit ($) [2]