Deyi 4E5NA Ans Prelim Paper 2 2024

Deyi Secondary School Principles of Accounts Secondary 4E5NA Prelim Exam 2024 Mark Scheme : Paper 2 Question 1 1(a) [10] Clifford Legal Pte Limited Statement of Financial Performance for the year ended 31 March 2024 $ $ Service fee revenue ($35 800 – $500) 35 300 [1] Other income: Commission income ($6 200 - $600) 5 600 [1] Gain on sale of non-current asset 500 [1] 41 400 Less: Other expenses Rent expense (12 000 - $2 400) 9 600 [1] Wages and salaries 18 600 [1] General expense 1 200 [1] Interest expense ($8 000 + $2 500) 10 500 [1] Depreciation of office equipment 14 000 [1] Depreciation of motor vehicles 16 200 [1] Impairment loss on trade receivables 3 775 [1] 73 875 Loss for the year (32 475)

1b. [10] Clifford Legal Pte Limited Statement of Financial Position as at 31 March 2024 $ Cost $ Accumulated Depreciation $ Net Book Value Assets Non-current assets Office equipment 96 000 42 000 (28 000 + 14 000) 54 000 [1] Motor vehicles 248 000 156 200 (140 000 + 16 200) 91 800 [1] 145 800 Current assets Trade receivables ($80 300 - $2 000) 78 300 Less: Allowance for impairment of trade receivables (5% x $78 3000 (3 915) [1] 74 385 Prepaid rent expense 2 400 [1] Cash at bank 8 000 Cash in hand 3 200 87 985 Total Assets 233 785 Equity and liabilities Shareholder’s equity Share capital, 100 000 ordinary shares 100 000 Retained earnings ($50 160 -$3 000 – $32 475) 14 685[1] 114 685 Non-current liabilities Long-term borrowings (105 000 – 21 000) 84 000 [1] Current liabilities Trade payables 8 000 Commission income received in advance 600 [1] Interest expense payable 2 500 [1] Dividend payable 3 000 [1] Current portion of long-term borrowings 21 000 [1] 35 100 Total equity and liabilities 233 785

Question 2 2(a)(i) [1] On 30 November 2022, the business provided services for $21 000 to customers on credit. [1] 2(a)(ii) [2] On 30 September 2023, the business received service fee revenue of $ 1 000 in advance for service that it has not rendered for the accounting year [1]. On 30 September 2023, the business earned service fee revenue of $83 000 for the current accounting year [1]. 2(b) [2] Revenue recognition theory [1]. Revenue is earned when goods have been delivered or when services have been provided [1]. OR Accrual basis of accounting [1] According to the accrual basis of accounting, income is recognised when it is earned rather than when the amount is received [1] OR Matching theory [1] Expenses incurred must be matched against income earned in the same period to determine accurate profit for the period [1] 2(c) [6] Journal Date Debit $ Credit $ 2023 Sep 30 Trade payable Raja 100 [1] Discount received 100 [1] Sep 30 Loan interest expense 5 000 [1]