4E5N CHIJ Katong Prelim 2022 P1 QP

This question paper consists of 10 printed pages [Turn over CHIJ KATONG CONVENT PRELIM EXAMINATION 2022 SECONDARY 4 EXPRESS / 5 NORMAL (ACADEMIC) CANDIDATE NAME CLASS INDEX NUMBER PRINCIPLES OF ACCOUNTS 7087/01 Paper 1 August / 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. 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. For Examiner’s Use 1 2 3 4 Total

2 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N Answer all questions. 1 Koh Rong runs a retail shop. The following information on wages for sales staff for the year ended 30 April 2022 is taken from the business. $ On 1 May 2021 Wages owed to staff 850 On 30 April 2022 Wages owed to staff 1 030 During the year ended 30 April 2022, wages paid in cheques to sales staff was $25 200. REQUIRED (a) Calculate the wages to be reported on the statement of financial performance for the year ended 30 April 2022. [3] (b) Prepare journal entries to record wages owed to staff on 30 April 2022. Narration is not required. Debit $ Credit $ [2] (c) State the effect on profit for the year if wages owed to staff on 30 April 2022 is not adjusted. [2]

3 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N Koh Rong also provided the following ledger account for the year ended 30 April 2022 on the business’ commission income. Commission income account Debit Credit Balance $ $ $ 2021 May 1 Commission receivable 570 570 Dr 2022 March 31 Cash at bank 9 760 9 190 Cr April 30 Commission receivable 660 9 850 Cr REQUIRED (d) Interpret the entries in the commission income account on: (i) 1 May 2021 [1] (ii) 31 March 2022 [1] (iii) 30 April 2022 [1]

4 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N (e) Name and explain the accounting theory applied when adjusting the commission receivable at year-end. [2] [Total: 12]

5 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N 2 The following information is taken from the accounts of a trading business owned by Pitas. Year ended 30 April 2021 Year ended 30 April 2022 Gross profit margin 25% 18% Profit margin 9% 12% In 2022, Pitas found that goods were piling up in the storeroom. He then introduced a promotion campaign to sell off the goods and reduced the quantity purchased from suppliers. Pitas also made other business decisions to improve the business’ profit. REQUIRED (a) Comment on the gross profit margin of the business over the two years. [3] (b) Comment on the profit margin of the business over the two years. [2] [Total: 5]

6 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N 3 Sumbawa is an importer of yoga clothes and related equipment. She uses the FIFO (First-in -first-out) method of inventory valuation. The business had 22 pieces of yoga pants costing $528 on 1 May 2022. In May 2022, the business had the following transactions. Inventory bought in May 2022 Date Pieces of yoga pants Cost 2022 $ May 4 14 364 16 22 638 24 18 558 The business sold on credit 36 pieces of yoga pants on 25 May 2022 for $1 115. REQUIRED (a) Name the source document used to record the transaction on 25 May 2022. [1] (b) Calculate the cost of sales of yoga pants in May 2022. [2] (c) Calculate the gross profit margin on yoga pants for the month of May 2022. [2]

7 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N On 31 May 2022, Sumbawa found that 20 floor mats bought for $224 were damaged in a recent heavy downpour and could only be sold for $136. The remaining 180 floor mats were not damaged. These were bought for $2 160 and could be sold for $2 592. REQUIRED (d) Calculate the value of floor mats that should be included on the statement of financial position as at 31 May 2022. [2] Sumbawa decided not to adjust the inventory on 31 May 2022 for the damaged floor mats and to maintain their value at $224. REQUIRED (e) State the effect of Sumbawa’s decision on equity as at 31 May 2022. [2] [Total: 9]

8 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N 4 Macleod provided the following cash at bank details for the month ended 31 July 2021 taken from the accounts of his business. Cash at Bank Debit Credit Balance $ $ $ 2021 July 1 Balance b/d 450 Dr 6 York cheque 1247 630 180 Cr 15 Liao 170 10 Cr 22 Gove cheque 1248 558 568 Cr 27 Bicol 680 112 Dr 31 Sales revenue 172 284 Dr 31 Yamal cheque 1249 326 42 Cr On 4 August 2021, the bank statement for the month ended 31 July 2021 was received. Bank Statement for the month ended 31 July 2021 Withdrawals Deposits Balance $ $ $ 2021 July 1 Balance b/d 660 Cr 3 Cheque 1246 210 450 Cr 8 Cheque 1247 630 180 Dr 17 Cheque deposit - Liao 170 10 Dr 24 Cheque 1248 558 568 Dr 28 Cheque deposit - Bicol 860 292 Cr 31 Bank charges 35 257 Cr It was found that the cheque received from Bicol on 27 July 2021 has been wrongly recorded in the business’ cash at bank account.

9 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N REQUIRED (a) Prepare an updated cash at bank account for the month ended 31 July 2021. [3] (b) Prepare a bank reconciliation statement as at 31 July 2021. [4]

10 CHIJ Katong Convent Prelim Examination 2022 Principles of Accounts Paper 1 Sec 4E/5N (c) Explain the historical cost concept. [1] (d) Name one purpose of internal control. [1] Macleod’s financial year ends on 31 December. Macleod took up a bank loan of $20 000 on 1 April 2020. The loan is repayable in 4 equal instalments on every 31 March. Interest rate is at 4% per annum. The first repayment of $5 000 was made on 31 March 2021. REQUIRED (e) Calculate the interest expense for the year ended 31 December 2021. [5] [Total: 14] END OF PAPER