SWISS_COTTAGE_2022_4E5N_EXAM_POA_PRELIM_P1

SWISSCOTTAGESECONDARYSCHOOLSECONDARYFOURANDFIVEPRELIMINARYEXAMINATION O Name: ( ) Class: PRINCIPLESOFACCOUNTS Paper 1Candidatesanswer ontheQuestionPaper. 7087/01 Monday29August 20221hour READTHESEINSTRUCTIONSFIRST Writeyour name, classandindexnumber onall theworkyouhandin.Writeindarkblueor blackpen.YoumayuseanHBpencil for anyroughworking.Donot usestaples, paper clips, glueor correctionfluid.Theuseof anapprovedcalculator isallowed. Answer all questions. Thebusinessesdescribedinthisquestionpaper areentirelyfictitious. Thenumber of marksisgiveninbrackets[ ] at theendof eachquestionor part question. At theendof theexamination, fastenall your worksecurelytogether. Thisdocument consistsof 8printedpages. Setter: MrsFan-FongSookThengVetter: MsKarenAng [Turnover HomeofThoughtfulLeaders:ServewithHonour,LeadwithHumility

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31 Dazzling Home Supplies is in the business of selling householdlights. On31December 2021,the business had an inventory balance of $15 000. Unfortunately, thestorehadexperiencedafire due to electrical faults and some of the inventory was damaged. The selling price of theremaininginventorywas$8200. The insurance company had informed Dazzling Home Supplies that the business would beabletoreceiveacompensationof $5000. Asat 31December 2021, theclaimhadnot yet beenreceived. REQUIRED(a) Statethevaluationruleof inventory. ……………………………………………………………………………….…………………………[1] (b) Nametheaccountingtheoryappliedtothevaluationof inventory.……………………………………………………………………………….…………………………[1] (c) Calculatetheamount of inventorylossduetothefire. Showall workings.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[2] (d) Prepare the journal entries to adjust the value of the inventory on 31 December 2021.Narrationsarenot required. [3]JournalDate Particulars Debit ($) Credit ($) (e) State the effect on the profit for the year if the inventory was not adjusted as at 31December 2021.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1] [Total: 8]

42 The following information is extracted from the books of Kitty Palace Pte Ltd for the financialyearsended30June2021and2022. 2021$ 2022$Inventory 7800 21500Tradereceivables 6550 10900Cashinhand 3180 2900Cashat bank 15890 -Bankoverdraft - 4210Tradepayables 4900 5100Current portionof longtermborrowing 10000 10000LongTermborrowing 50000 40000 Current ratio 2.24 ?Quickratio 1.72 ? REQUIRED(a) Calculate, totwodecimal places, thefollowingfor theyear ended30June2022: (i) Current ratio ……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1] (ii) Quickratio ……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….……………………………………………………………