KCPSS 4NA POA Prelim 2024 ANS

N’Level Revision Set O – Kuo Chuan Presbyterian N’Level Prelim 2024 SOLUTIONS -PAPER 1- Answer all the questions. 1 Kim Teck is a sole trader. As at 30 June 2023, his business had the following assets and liabilities. Current Assets Current Liabilities Non-current Assets Non-current Liabilities $50 000 $26 000 $80 000 $30 000 Required (a) State the meaning of each of the following terms: (i) Assets [1] Assets are resources a business owns or controls that are expected to provide future benefits. (ii) Liabilities [1] Liabilities are obligations owed by a business to others that are expected to be settled in the future. (iii) Equity [1] Equity refers to the claim by the owner on the net assets of a business. (b) Calculate the equity of Kim Teck’s business as at 30 June 2023. [3] [1] [1] Equity = $(50 000 +80 000) – (26 000 +30 000) = $74 000 [1]

2 The table shows the transactions that occurred in Kim Teck’s business. Show the effect of the following transactions on assets, liabilities and owners’ equity. Assets Liabilities Owners’ Equity Example: Kim Teck contributed $10 000 cheque into the business. Cash at bank +10 000 No effect Capital +10 000 Kim Teck’s business purchased goods worth $6 000 on credit from a supplier. Inventory +6 000 [1] Trade payable +6 000 [1] No effect Kim Teck withdrew $5000 cash from the business bank account for personal use. Cash at bank − 5 000 [1] No effect Drawings − 5 000 [1] [4] [Total: 10]

3 KCPSS 2024/Sec 4NA Prelim POA P1 [Turn Over 2 The trade receivable account for Terry Trading in the books of Lydia Wholesale is shown below. Trade receivable – Terry Trading Date Particulars Dr Cr Balance 2023 Jul 1 Bal b/d 14 000 Dr 9 Sales revenue 3 000 17 000 Dr 12 Sales return 400 16 600 Dr 23 Cash at bank 15 000 1 600 Dr Required (a) Interpret the entries in Trade receivable – Terry Trading account on: (i) 9 July 2023 [1] Sold goods at $3 000 to Terry Trading on credit. (ii) 12 July 2023 [1] Defective goods were returned to Terry Trading. (iii) 23 July 2023 [1] Received a cheque 0f $15 000 from Terry Trading.

4 (b) State the source document for each of the transactions on: (i) 9 July 2023: Invoice [1] (ii) 12 July 2023: Credit note [1] (iii) 23 July 2023: receipt [1]

5 KCPSS 2024/Sec 4NA Prelim POA P1 [Turn Over

6 The financial year of Lydia Wholesale ends on 31 July. The trade receivable balances are as follows: 31 July 2022 31 July 2023 Trade receivables $59 800 $65 000 On 31 July 2023, Terry Trading was declared bankrupt. Lydia Wholesale wrote off the debt of $1 600 owed by Terry Trading. Required (c) Prepare the journal entry to