SASS Prelims 2022 4E5N P2 Q.docx

IndexClass Number Candidate’sName_____________________________________ STANDREW’SSECONDARYSCHOOLPRELIMINARYEXAMINATION2022SECONDARY4EXPRESS/ 5NORMAL(ACADEMIC) PRINCIPLESOFACCOUNTS 7087/02 Paper 2 25August 2022 2hours NoAdditional Materialsarerequired. READTHESEINSTRUCTIONSFIRST An answer booklet will be provided with this question paper. You should followthe instructions on the frontcover of the answer booklet. If you need additional answer paper ask the invigilator for a continuationbooklet. Answer all questions. Theuseof anapprovedcalculator isallowed. Thebusinessesdescribedinthisquestionpaper areentirelyfictitious. Thenumber of marksisgiveninbrackets[ ] at theendof eachquestionor part question. For Examiner’sUse 1 202 153 114 14Total 60 Thisdocument consistsof 6printedpages.

2 POA7087KBC©SAS Answer all questions. 1 GWSPteLimitedbuysandsellsmedical equipment. Thefollowingbalanceswereextractedfromitsbookson31December 2021. $Accumulateddepreciationof motor vehicles 51200Allowancefor impairment of tradereceivables 7600Cashat bank 9400 CreditCommissionincome 12600Cost of sales 320400Discount allowed 8400Equipment 50000General expense 50200Interest on5%bankloan 3000Inventory 73600Motor vehicles 341000Rent expense 65200Retainedearnings1January2021 56600Salesreturns 20600Salesrevenue 505800Sharecapital, 200000ordinaryshares 200000Tradepayables 35600Tradereceivables 464005%Bankloan 100000 Additional information: 1 Commissionincome, $1500, hasyet tobereceived. 2 Therent expenseincludes$20000for thefivemonthsending31March2022. 3 Interest onthe5%bankloanwasnot fullypaid. 4 One-quarter of the5%bankloanisrepayableon30June2022. 5 The allowance for impairment of trade receivables is to be maintained at 10% of tradereceivables. 6 Motor vehiclesaretobedepreciatedat 10%per annumusingthereducing-balancemethod. 7 Equipment is to be depreciated using the straight-line method over a useful life of ten years.Theestimatedresidual valueis$5000. 8 Thecompanydeclaredadividendof $0.05per shareandit will bepaidon15January2022. REQUIRED (a) Preparethestatement of financial performancefor theyear ended31December 2021. [8] (b) Preparethestatement of financial positionasat 31December 2021. [12]

3 [Total: 20]2 Wai SohDimownsabusinessimportingpremiumlightingproducts. ThefollowinginformationrelatestoWai SohDim’sbusinessat 30April 2021and2022. 30April 2021 30April 2022$ $Allowancefor impairment of tradereceivables 2300 5540Capital 50770 69790Cashat bank 1950 -Bankoverdraft - 3400Inventoryat cost 6800 17600Long-termbankloan 50000 70000Motor vehicles(net bookvalue) 90000 126000Prepaidgeneral expenses 720 630Tradepayables 5100 14700Tradereceivables 8700 19200 Additional information: Included in motor vehicles at 30 April 2022 was a payment, $38 000, during the year for a newdeliveryvan. REQUIRED (a) Explainwhat ismeant bytheliquidityof abusiness. [1] (b) Calculatethefollowingfor Wai SohDim’sbusinessfor theyear ended30April 2022. (i) Current ratio [2] (ii) Quickratio [2] Giveyour a