SPS 4E Paper 2

NAME CLASS INDEX NO. ST. PATRICK'S SCHOOL PRELIMINARY EXAMINATION 2022 SUBJECT : Principles of Accounts Paper 2 (7087/02) DATE : 12 AUGUST 2022 LEVEL : Secondary 4 Express Secondary 5 Normal (A) DURATION : 2 hours 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 answer paper ask the invigilator for a continuation booklet. Answer all questions. The use of approved calculators is allowed. The number of marks is given in the brackets [ ] at the end of each question or part question The total for this paper is 60 marks. This question paper consists of 7 printed pages, including the cover page.

2 Answer all questions. 1 The following balances were extracted from the books of Shane Gabriel Limited on 31 December 2021. Additional information: 1 At 31 December 2021 (i) Salaries expenses payable amounted to $2 040. (ii) Rental expenses $5 700 was paid for the three months ended 31 January 2022. (iii) Interest on the bank loan was not fully paid up. (iv) Commission earned for the year ended 31 December 2021 amounted to $1 600. $ Issued share capital (100 000 ordinary shares) 150 000 Retained earnings 10 530 Sales revenue 129 920 Sales returns 9 500 Inventory 22 980 Commission income 1 250 Trade payables 13 740 Trade receivables 20 410 Cost of sales 31 480 Salaries expenses 22 960 Interest expenses 1 100 Cash at bank 25 720 Rental expenses 30 500 Fixtures and fittings, at cost 60 200 Motor vehicles, at cost 120 000 Accumulated depreciation: Fixtures and fittings 2 910 Motor vehicles 16 500 8% bank loan (repayable 30 September 2024) 20 000

3 2 Depreciation is to be provided as follows: (i) Fixtures and fittings at 10% per annum using the straight-line method. (ii) Motor vehicles at 20% per annum using the reducing balance method. 3 A credit customer was declared bankrupt and his debt of $410 is to be written off. 4 A review of trade receivables showed that 4% debts may be uncollectible. 5 The following transactions which happened during the year were not recorded: (i) Additional 50 000 ordinary shares at $1.60 each were paid and issued on 1 July 2021. (ii) A dividend of $0.05 cents for each ordinary share was declared on 28 December 2021. Payment will be made on 12 February 2022. 6 A repayment of $5 000 is to be made on the 8% bank loan on 31 March 2022. REQUIRED (a) Prepare the Statement of Financial Performance of Shane Gabriel for the year ended 31 December 2021. [9]