2024 HGV 4E Prelim Paper 2

HILLGROVE SECONDARY SCHOOL PRELIMINARY EXAMINATION 2024 SECONDARY FOUR (EXPRESS) / FIVE (NORMAL ACADEMIC) CANDIDATE NAME ( ) CLASS - CENTRE NUMBER S INDEX NUMBER PRINCIPLES OF ACCOUNTS Paper 2 Candidates answer on the Question Paper. Additional Materials: Insert 7087/02 27 Aug 2024 2 hours 10.05 AM to 12.05 PM READ THESE INSTRUCTIONS FIRST Answer all questions. The number of marks is given in brackets [ ] at the end of each question or part question. For Examiner’s Use Marks 1 2 Parent’s/ Guardian’s Signature: ___________________ 3 Setter: Mdm Grace Ang 4 TOTAL This document consists of 15 printed pages.

2 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 Answer all questions. 1 Refer to the Insert for data for Question 1. REQUIRED (a) Prepare the statement of financial performance for the year ended 31 December 2023. Danish Hairstyling Limited Statement of Financial Performance for the year ended 31 December 2023

3 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 [8]

4 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 (b) Prepare the statement of financial position as at 31 December 2023. Danish Hairstyling Limited Statement of Financial Position as at 31 December 2023

5 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 [12] [Total: 20]

6 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 2 Shengxin Trading is a business that sells premium Japanese watermelons and apples. Shengxin Trading has been buying watermelons from Sean Fruits for the last 10 years and receives a 10% trade discount from Sean Fruits for being a loyal customer. The follow ledger account has been extracted from the books of Shengxin Trading. REQUIRED (a) Calculate the list price of the transaction on 15 June 2024. [1] (b) Interpret the transaction that took place on 25 June 2024. [2] On 1 July 2024, there were 50 boxes of apples costing $500 in Shengxin Trading. The following transactions took place. 2024 Jul 5 Bought 50 boxes of apples at $600 on credit from Shi Tong Trading. Jul 10 Sold 50 boxes of apples at $700 on credit to Hillgrove Secondary School. Jul 15 Bought 50 boxes of apples at $450 and paid by cheque. Jul 20 Sold 50 boxes of apples at $700 on credit to Zheng Yang Ltd. REQUIRED (c) Calculate the cost of sales for July 2024 using the FIFO method. [1] Trade payable: Sean Fruits Date Particulars Dr ($) Cr ($) Bal ($) 2024 Jun 1 Bal b/d 9 000 Cr Jun 15 Inventory 3 600 12 600 Cr Jun 25 Cash at bank 11 970 630 Cr Jun 25 Discount received 630 -

7 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 Shengxin Trading occasionally conducts workshops to teach secondary school students about entrepreneurship. The following ledger account has been extracted from the books of Shengxin Trading. REQUIRED (d) State the particulars for the entry on 1 July 2023. [1] (e) Prepare an extract of the statement of financial performance for the year ended 30 June 2024 to show the amount to be included for workshop income. Shengxin Trading Extract of Statement of Financial Performance for the year ended 30 June 2024 [2] Workshop income account Date Particulars Dr ($) Cr ($) Bal ($) 2023 Jul 1 ? 200 200 Cr 2024 Jun 30 Cash at bank 3 700 3900 Cr Jun 30 Workshop income receivable 800 4 700 Cr

8 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 At the end of each accounting year, Shengxin Trading makes adjustments for income earned but not yet received and income received but not yet earned in accordance to the revenue recognition theory and one other accounting theory. REQUIRED (f) State and explain the other accounting theory. Accounting theory: XX Explanation of accounting theory: XX [2] Shengxin Trading wants to purchase a new vehicle to deliver watermelons and apples to its customers. It is considering between two models of commercial vehicle, Toyota Hiace and Nissan NV350. REQUIRED (g) State two non-accounting information that should be considered by Shengxin Trading when deciding which model of commercial vehicle to purchase. 1 XX 2 XX [2] [Total: 11]

9 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 3 Hannah Trading hired an accounting intern, Justin, who unfortunately made some mistakes. Justin changed the depreciation method for motor vehicles from reducing-balance method to straight-line method because he felt that it was less time consuming to calculate annual depreciation expense using the straight-line method. REQUIRED (a) State and explain the accounting theory that Justin violated. Accounting theory: XX Explanation of accounting theory: XX [2] Hannah Trading had been receiving positive reviews from customers on its products. Justin recorded the positive reviews as $1 000 of current assets. REQUIRED (b) State and explain the accounting theory that Justin violated. Accounting theory: XX Explanation of accounting theory: XX [2] Justin showed improvement in his performance and is now employed as a permanent accountant of Hannah Trading. Justin has been preparing financial statements at the end of each financial year in accordance to the accounting period theory and one other accounting theory. REQUIRED (c) State and explain the other accounting theory that Justin applied. Accounting theory: XX Explanation of accounting theory: XX [2]

10 HGV PRELIMINARY EXAMINATION 2024 4E/5NA PRINCIPLES OF ACCOUNTS PAPER 2 Hannah Trading and Amirah Trading are in the same industry. The following information about both businesses have been made available. Hannah Trading Amirah Trading $ $ Cash at bank 10 000 - Trade receivables 3 000 2 900 Inventory 20 000 50 000 Prepaid expenses 4 000 3 900 Total current assets 37 000 56 800 Trade payables 10 000 9 700 Bank overdraft - 400 Current portion of long-term borrowings - 2 000 Total current liabilities 10 000 12 100 Working capital $27 000 ? Current ratio 3.70 ? Quick ratio 1.30 ? REQUIRED (d) Calculate the following for Amirah Trading. (i) Working capital [1] (i) Current ratio (to two decimal places) [1] (i) Quick ratio (to two decimal places) [1]