2022 GMSS POA 4E5N PRELIM PAPER 2

GeylangMethodistSchool(Secondary)PreliminaryExamination2022 CandidateName Class IndexNumber PRINCIPLESOFACCOUNTSPaper2 Additionalmaterials:Writingpapers(4sheets) 7087/02Sec4Express/Sec5Normal(Academic) 2hours READTHESEINSTRUCTIONSFIRSTWriteyourindexnumberandnameinthespacesatthetopofthispage.Writeindarkblueorblackpen.Donotusestaples,paperclips,glueorcorrectionfluid/tape.Theuseofanapprovedcalculatorisallowed. Answerallquestions. Thebusinessesdescribedinthisquestionpaperareentirelyfictitious. Thenumberofmarksisgiveninbrackets[ ] attheendofeachquestionorpartquestion. Thetotalmarksforthispaperis60marks. Thisdocument consistsof 7printedpagesand1blankpage.

GMS(S)/POA/P2/PRELIM2022/4E/5N(A) 1 Thefollowingisalist of balancesfromthebooksof BeezeePteLimitedon30September 2021. $Sharecapital, 100000ordinaryshares 100000Retainedearnings, 1October 2020 15180Equipment, at cost 122000Motor vehicles, at cost 100000Accumulateddepreciation:Equipment 12000Motor vehicles 20000Tradepayables 6340Tradereceivables 29500Allowancefor impairment of tradereceivables 1300Cashat bank 18005%Bankloan 60000Salesrevenue 161250Salesreturns 900Cost of sales 91200Inventory 13500Commissionincome 20200Insuranceexpenses 28000Wagesandsalaries 9370 Additional information 1 Insuranceexpenses, $300, wereprepaid.2 Commission, $900, hadbeenreceivedinadvance.3 Equipment is depreciated at 10%using the straight-linemethod. Theestimatedscrapvalueis$2000.Motor vehiclesaretobedepreciatedat 20%per annumusingthereducing-balancemethod.4 The allowance for impairment of trade receivables is to be maintained at 4% of tradereceivables.5 Thenet realizablevalueof inventoryasat 30September 2021is$12500.6 Interest onthebankloanfor theyear ended30September 2021hadnot yet beenpaid.7 Thecompanydeclaredadividendof $0.02per share. It will bepaidon5October 2021. REQUIRED (a) Preparethestatement of financial performancefor theyear ended30September 2021. [9](b) Prepare the statement of financial position as at 30 September 2021.[11] [Total: 20] 2

GMS(S)/POA/P2/PRELIM2022/4E/5N(A) 2 The following information has been provided for Fashion Retail for the year ended 30 August2021. Net salesrevenue $268500Operatingexpenses $42100 Grossprofit margin 24.00%Returnonequity 40.68% REQUIRED(a) Calculatetotwodecimal places, wherenecessary, for theyear ended30August 2021:i. Gross profit[1]ii. Mark-up on cost[2]iii. Profit margin[1] The following profitability ratios were extracted from the books of Uptown Retail, a closecompetitor of FashionRetail.Grossprofit margin 18.00%Mark-uponcost 22.36%Profit margin 10.39%Returnonequity 53.44% REQUIRED(b) Evaluatetheprofitabilityof FashionRetail andUptownRetail for theyear ended30August2021. Usethegiveninformationandyour answer to(a). [6] Hazmi isconsideringtoinvest ineither FashionRetail or UptownRetail. REQUIRED(c) Recommend which business Hazmi should invest in. Use the given information to supportyour recommendation.[2] (d) Explaintheimportancetoabusinessof itsprofitability. [2][Total: