Temasek Sec 2024 Prelims 5N POA P1 and P2 Ans

TEMASEK SECONDARY SCHOOL Preliminary Examination 2024 Secondary Five Normal Academic Principles of Accounts Paper 1 (7087/1) Marking Scheme Question 1(a) 3 960/90% = $4 400 √ [1] Question 1(b) 150 / (2 850 + 150) x 100 = 5% √ [1] Question 1(c)(i) The cheque of $2 850 received from Zaiton on 14 July was dishonoured √ Business withdrew the discount of $150 given to her √ [2] Question 1(c)(ii) Business wrote off the debt of $6 960 owing from Zaiton √ [1] Question 1(d) Prudence theory √ Business do not overstate its trade receivable balance when a debt becomes uncollectible √ [2] Question 1(e) no effect √ [1] [Total: 8]

Question 2(a) benefits of motor vehicles decreases as they get older √ [1] Question 2(b) Dep (30/6/2021) = 20% x (23 000 - 0) = 4 600 20% x (23 000 - 4 600) = 3 680 Debit $ Credit $ Cash at bank 10 000 √ Accumulated depreciation - motor vehicles (4 600 + 3 680) 8 280 √ Loss on sale of motor vehicles 4 720 √ Motor vehicles 23 000 √ [4] Question 2(c) Dep (30/6/2021) = 20% x [(100 000 - 23 000 + 15 000) √ - (38 000 - 8 280) √ ] = $12 456 0 [2] Question 2(d) Non-current assets Cost Motor vehicles 92 000 √ [3] (100 000 - 23 000 + 15 000)) [Total: 10] 42 176 √ 49 824 √ (38 000 - 8 280 + 12 456) Dep (30/6/2022) = Extract of statement of financial position as at 30 June 2024 Accumulated Depreciation Net Book Value

Question 3(ai) 500 + 580 = $1 080 √ [1] Question 3(aii) (900 + 880) √ - 1 080 √ OF = $700 [2] Question 3(b) average inventory = (500 + 1 320)/2 = 910 √ cost of sales = 1 080 √ days sales in inventory = 910/1 080 x 365 = 307.55 days [2] Question 3(c) The days sales in inventory for Chong’s business has worsened from 290.32 days in 2022 to 298.87 days in 2023 to 307.55 days in 2024. √ This means that the business is managing inventory less efficiently over the three years. √ The worsening days-sales-in-inventory indicates that the business is taking longer to sell its goods. √ This may be due to the business buying too many goods and unable to sell them. √ The business may be paying more for its goods as unit price has increased from $50(Jul 1) to $58(Sep 8) to $66 (Feb 1) √ [5] Question 3(d) decrease inventory √ or increase sales √ provide trade discounts to encourage bulk purchases which leads to higher sales and improved inventory turnover √ buy in bulk to get trade discount to lower the cost of inventory purchased √ [3] [Total: 13]

Question 4(a) 30-Jun-23 30-Jun-24 Cash at bank 8,500 Bank overdraft 10,800 Income received in advance 800 2,300 Trade receivables 41,700 52,400 Allowance for impairment of trade receivables 834 1,048 Inventory at cost 40,400 82,800 Prepaid expenses 800 250 Trade payables 35,900 45,700 Expenses payable 5,600 3,600 CA 90,566 134,402 QA 49