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 ……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1] (b) Identify one stakeholder who would be interested in Kitty Palace PteLtd’sliquidity. Explainwhythestakeholder identifiedisinterestedintheinformation.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[2]

5 (c) Comment onKittyPalacePteLtd’sliquidityfor theyearsended30June2021and2022.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[3] (d) Suggest twowaystoimprovetheliquidityof KittyPalacePteLtd.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[2] [Total: 9]

63 Kelly started a sole proprietorship So Good Baking Supplies, a baking supplies business, in2020. Thebusinessprovidedthefollowingledger accountsfor theyear ended31March2022. Drawingsa/cDate Particulars Debit Credit Balance2021 $ $ $Dec1 Cashat bank 500 500Dr2022Jan1 Inventory 450 950DrMar 31 Capital 950 - Capital a/cDate Particulars Debit Credit Balance2021 $ $ $Apr 1 Balanceb/d 10500CrDec31 Cashat bank 5000 15500Cr2022Mar 31 Incomesummary 9400 24900Cr31 Drawings 950 23950Cr REQUIRED (a) Describethetransactionsinthedrawingsaccount onthefollowingdates.(i) 1December 2021 ……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1](ii) 31March2022 ……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1] (b) Describethetransactioninthecapital account on31December 2021.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[1] (c) Statewhether thebusinesshadmadeaprofit or alossfor theyear ended31March2022.……………………………………………………………………………….…………………………[1]

7ExtremelyGoodBakersPteLtdprovidedthefollowingaccount balanceson1April 2020. $Sharecapital, 10000ordinaryshares 50000Retainedearnings 25450 Thefinancial year of ExtremelyGoodBakersPteLtdendson31March.Thefollowingtransactionstookplacein2021and2022.Date Transaction2021Feb1 Dividendsof $0.05per shareweredeclared.Mar 31 Profit for theyear was$9300.Apr 5 ThedividendsdeclaredonFebruary1werepaid.Oct 10 10000shareswereissuedat $2per share.2022Jan31 Dividendsat $0.05per shareweredeclaredandpaidinfull.Mar 31 Lossfor theyear was$1000. REQUIRED (d) Preparethesharecapital account for theyearsended31March2021and2022.Sharecapital a/c……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[3]

8(e) Preparetheretainedearningsaccount for theyearsended31March2021and2022.Retainedearningsa/c……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[7] (f) Statetwoadvantagesof aprivatelimitedcompany.……………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………………………………………………………………………………………….…………………………[2] [Total: 16]

94 After preparing the trial balance, the accountant of Koko Trading prepared the financialstatementsfor theyear ended31December 2021. Thefollowingerrorswerediscovered. 1 Amotor vehiclerepairsinvoice$150waspostedtothemotor vehiclesaccount.2 Credit salesof $1500toPangPangwasrecordedinPongPong’saccount.3 Debit note of $800 issued to a customer has been recorded in the debit column ofthesalerevenueaccount andthecredit columnof thetradereceivablesaccount. Theprofit for theyear beforediscoveringtheerror was$25000. REQUIRED(a) Preparejournal entriestocorrect theerrors. Narrationsarenot required.Journal……………………………………………………………………………….…………………………………………………………………………………………………………