KCPSS 4NA POA Prelim 2024

N’Level Revision Set O – Kuo Chuan Presbyterian N’Level Prelim 2024 -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] (ii) Liabilities [1] (iii) Equity [1] (b) Calculate the equity of Kim Teck’s business as at 30 June 2023. [3]

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. Kim Teck withdrew $5000 cash from the business bank account for personal use. [4] [Total: 10] 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] (ii) 12 July 2023 [1]

3 (iii) 23 July 2023 [1] (b) State the source document for each of the transactions on: (i) 9 July 2023: _________________________ [1] (ii) 12 July 2023: _________________________ [1] (iii) 23 July 2023: _________________________ [1] 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 record the debt written off on 31 July 2023. A narration is not required. [2]

4 Lydia Wholesale maintains an allowance for impairment of trade receivables based on 5% of its trade receivable at the end of every financial year. Required (d) Prepare the journal entry to record the adjustment of allowance for impairment of trade receivable for the financial year ended 31 July 2023. Narration is not required. [2] [Total: 10] 3 Jeremy is an accountant preparing the financial statements of a business on 31 December 2023. Required (a) Complete the following table indicating with a tick (√) on which side of a trial balance each item would appear. Debit Credit Prepaid rent expense Accumulated depreciation of office equipment Sales return Discount received [4] After preparing the trial balance as at 31 December 2023, the following errors were discovered by Jeremy. (1) Payment of $2 100 by cheque for advertising has been recorded as $1 200 in the books. (2) Goods sold for $5 000 has been debited to the sales revenue account and credited to the credit customer Tammy Store. (3) The maintenance expense of $300 for the van was debited to the motor vehicle account.

5 Required (b) Prepare journal entries to correct the errors in each of (1), (2) and (3). Narrations are not required. [6] (c) State one purpose of the trial balance. [1] [Total: 11]

6 4 The financial year of Jon Bakery ends on 31 December. On 1 July 2022, Jon Bakery took a loan of $150 000 from ABC Bank at an interest rate of 2% per annum. The loan has a repayable period of 10 years. Both the partial repayment of the loan and payment of interest are to be made on every 1 July of each financial year. Required (a) Calculate the amount of loan that is to be repaid on every 1 July of each financial year. [1] (b) Calculate the amount of interest expense incurred on 31 December 2022. [1] (c) Prepare the journal entry to record the adjustment to the interest expense as at 31 December 2022. A narration is required. [3]

7 (d) Prepare an abstract of the statement of financial performance for the year ended 31 December 2022, showing only the expense section. [1] Statement of financial performance for the year ended 31 December 2022 (e) Prepare an abstract of the statement of financial position as at 31 December 2022, showing only the liabilities section. [3] Statement of financial position as at 31 December 2022 [Total: 9] [End of Paper]

8 -PAPER 2- Data for Question 1 Toy Mart Ltd is a business that buys and sells toys. The following balances were extracted from the books of Toy Mart Ltd on 30 June 2023. $ Capital, 1 July 2022 105 630 Drawings 2 000 Cash at bank 68 000 Trade receivables 7 000 Office equipment 50 000 Motor Vehicles 180 000 Accumulated depreciation of motor vehicles 28 800 Accumulated depreciation of office equipment 10 000 Wages and salaries 38 000 Sales revenue 302 000 Cost of sales 100 800 Sales returns 2 600 Insurance expense 17 000 Trade payable 15 000 Rent and rates 12 000 Commission Income 15 970 The following information was made available on 30 June 2023. 1 $1 000 of commission income was received in advance. 2 $3 000 of insurance expense was prepaid. 3 An allowance for impairment of trade receivable is to be provided at 10% of trade receivables. 4 Depreciation policy for Office equipment: 5% per annum using straight line method. Motor vehicles: 10% per annum using reducing balance method.

9 Answer all the questions. 1 Refer to the insert for data for Question 1. Required (a) Prepare the statement of financial performance for the year ended 30 June 2023. Toy Mart Ltd Statement of financial performance for the year ended 30 June 2023 [10]

10 (b) Prepare the statement of financial position as at 30 June 2023. Toy Mart Ltd Statement of financial position as at 30 June 2023 [10] [Total: 20]