2023 SMSS POA 4E5N PRELIM P2 WITH ANS

ST. MARGARET’S SECONDARY SCHOOLPreliminary Examinations 2023CANDIDATE NAMECLASSREGISTER NUMBERPRINCIPLES OF ACCOUNTSPaper 2 Secondary 4 Express / 5 Normal (Academic)7087/0229 August 20232 hours Additional Materials: Writing papersREAD THESE INSTRUCTIONS FIRSTWrite your name, class and index number on all the work you hand in.Write in dark blue or black pen on both sides of the paper.Do not use staples, paper clips, highlighters, glue or correction fluid.You may use an approved calculator.Answer all questions.The businesses described in this question paper are fictitious.Where the columnar format is used, the running balance column should be updated for the first and last entries. Where applicable, the balance should be brought down to the next financial year.All calculations must be shown adjacent to the answer.At the end of the examination, fasten all your work securely together.The number of marks is given in brackets [ ] at the end of each question or part question.The total of the marks for this paper is 60.This document consists of 6 printed pages and a blank page.

2Answer all questions.1Dream Home is a business selling home accessories. The following balances were extracted from the books on 30 June 2022. $Share capital, 100 000 ordinary shares200 000Retained Earnings, 1 July 202155 9005% Bank Loan 100 000Motor vehicles 100 000Accumulated depreciation - Motor vehicles20 000Premise300 000Cash at bank 38 200Discount allowed2 180Trade receivables63 200Trade payables51 550Insurance expense17 500Sales revenue273 890Salaries expense42 800Sales returns23 400Cost of sales110 500Utilities expense13 840Rent income33 000Allowance for impairment of trade receivables7 400Inventory 27 620Interest on loan2 500Additional information:1Rent income of $3 000 was earned but not yet collected.2Insurance expense includes $7 500 for the three months ending 31 July 2022.3Utilities expense still outstanding stood at $800.4Interest on loan was not fully paid.5The premise carries a lease of 20 years.6Motor vehicles are depreciated at 20% per annum using the reducing balance method.7One of the credit customers who owed $2500 was declared bankrupt. The debt has yet to be written off.8The business reviewed its trade receivables and decided that 5% of the outstanding balance may be uncollectible.9The company declared a dividend of $0.15 per share. The dividend will be paid on 12 September 2022.REQUIRED(a)Prepare the statement of financial performance for the year ended 30 June 2022. [9](b)Prepare the statement of financial position as at 30 June 2022. [11] [Total: 20]

32The following information relates to Happy Games as at 31 July 2020, 2021 and 2022.202020212022$$$Non-current assets (net book value)188 800200 900220 000Net trade receivables 31 25044 60050 350Inventory 48 20054 68063 920Cash at bank 15 000 1 200-Rent income receivable 2 500-Long term borrowing--15 000Current portion of long-term borrowing--5 000Commission expense pay