Temasek Sec 2024 Prelims 5N POA P1 QP

No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. Name: Index Number: Class: _______ TEMASEK SECONDARY SCHOOL Preliminary Examination 2024 Secondary Five Normal Academic PRINCIPLES OF ACCOUNTS 7087/01 Paper 1 1 hour Question and Answer Booklet No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Do not open the booklet until you are told to do so. You are required to submit this booklet at the end of the paper. Write your name, index number and class on all the work you hand in. Write in dark blue or black pen. You may use a HB pencil for any rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. You may use a calculator. Where layouts are to be completed, you may not need all the lines for your answer. The businesses mentioned in this question paper are fictitious. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 9 printed pages and 1 blank page.

2 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. 1 Amirul is a trader who gives 10% trade discount to all his customers. He has provided the following account for the month ended 31 July 2024: Zaiton’s account Date Particulars Debit $ Credit $ Balance $ 2024 July 1 Balance b/d 3 000 Dr 5 Sales revenue 3 960 6 960 Dr 14 Cash at bank 2 850 4 110 Dr 14 Discount allowed 150 3 960 Dr 17 Cash at bank 2 850 6 810 Dr 17 Discount allowed 150 6 960 Dr 25 Allowance for impairment of trade receivables 6 960 - REQUIRED (a) Compute the list price of the goods that were sold to Zaiton on 5 July 2024. Assets are resources that a [1] (b) Compute the percentage of discount given to Zaiton on 14 July 2024. to [1] (c) Interpret the entries in Zaiton’s account on: (i) 17 July 2024 Interest of $ $1 500 was incurred in the year ended 30 September 2020 paid in the year ended 30 September 2021. [1] [2]

3 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. (d) Name and explain the accounting theory which was applied when the entry on 25 July 2024 was recorded in the books. Name: are resources that a business owns or controls that are expected to provide Explanation: [2] (e) State the effect on profit if the entry on 25 July 2024 had not been made. Assets are resources that a business owns or controls that [1] [Total: 8] (ii) 25 July 2024 Interest of $3 000 was paid with a cheque. [1] [1]

4 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. 2 Bodie runs a trading business with a financial year end of 30 June. He extracted the following information from his accounting books on 1 July 2023: $ Motor vehicles 100 000 Accumulated depreciation of motor vehicles 38 000 On 4 January 2024, the business sold a delivery van, costing $23 000, and received a cheque of $10 000. The delivery van was purchased on 9 August 2021. Bodie contributed his own motorcycle valued at $15 000 into the business on 8 May 2024. The business depreciates motor vehicles using the reducing -balance method of depreciation at 20% per annum. A full year depreciation is charged in the year of purchase but none in the year of sale. REQUIRED (a) Explain why Bodie used the reducing-balance rather than the straight-line method to depreciate its motor vehicles. [1] (b) Prepare the journal entry to record the sale of the delivery van on 4 January 2024. A narration is not required. Debit $ Credit $ [4]

5 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. (c) Calculate the depreciation expense for the year ended 30 June 2024. [2] (d) Prepare an extract of the statement of financial position as at 30 June 2024, showing the non-current assets section. Extract of statement of financial position as at 30 June 2024 Assets are resources that a business owns or controls that are [3] [Total: 10]

6 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. 3 Chong is a trader and uses the First-In-First-Out (FIFO) method of inventory valuation. The following transactions took place for the year ended 31 August 2024. 2023 Sep 1 Beginning inventory of 10 units at $500 Nov 8 Purchased 10 units at $580 Dec 12 Sold 10 units for $900 2024 Feb 1 Purchased 20 units at $1 320 May 4 Sold 10 units for $880 REQUIRED (a) Compute the following for Chong’s business for the financial year ended 31 August 2024. Chong also provided information about the business’ days sales in inventory for the two years ended 31 August 2022 and 2023. 31 August 2022 31 August 2023 290.32 days 298.87 days REQUIRED (b) Calculate the days sales in inventory for the year ended 31 August 2024. Show your answer to two decimal places. (i) Cost of sales Interest of $ $1 500 was incurred in the ye [1] (ii) Gross profit Interest of $3 000 was paid with a cheque. [1] [2] Interest of $3 000 was paid with a cheque. [1] [2]

7 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. (c) Comment on the trend in days sales in inventory for Chong’s business over the three years ended 31 August 2022, 2023 and 2024. Suggest possible reasons for the change. (d) Suggest two ways in which Chong could improve the business’ efficiency in managing inventory. Give one example of a specific action Chong could take. [3] [Total: 13] Interest of $3 000 was paid with a cheque. [1] [5]

8 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. 4 The following information has been provided for Don’s business for the two years ended 30 June 2023 and 30 June 2024. 30 June 2023 30 June 2024 $ $ 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 REQUIRED (a) Calculate the following to two decimal places: 30 June 2023 30 June 2024 (i) Current ratio (ii) Quick ratio [4]

9 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. (b) Evaluate the change in liquidity of Don’s business between 30 June 2023 and 30 June 2024. [5] [Total: 9] END OF PAPER

10 No part of the paper is to be reproduced without the approval of the Principal of Temasek Secondary School. BLANK PAGE