MI 2023 Prelim Examination P1 QP and Ans

2023 Preliminary Examination Pre-University 3 PRINCIPLES OF ACCOUNTING 9593/1 Paper 1 30 August 2023 3 hours READ THESE INSTRUCTIONS FIRST An answer booklet will be provided with this question paper. You should follow the instructions on the front cover of the answer booklet. If you need additional paper, ask the invigilator for a continuation booklet. Section A Answer all questions. Section B Answer all questions. Start each answer on a new page. You may use a calculator. All calculations must be shown adjacent to the answer. 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. [Turn over

2 Section A Answer all questions in this section 1 Kuat Pte Limited imports and programmes components for the electronics industry. On 31 March 2023 , a short -circuit caused an electrical fire which burnt part of the warehouse of Kuat Pte Limited. Only $47 000 worth of inventory was salvaged. The accountant, Riya was able to get the following financial information, based on records kept in the office. 31 December 2022 31 March 2023 Inventory $145 000 ? Trade Receivables $70 000 $55 000 Trade Payables $62 000 $65 000 Riya was also able to provide the following information for the above period, based on records that were kept in another office: $ Cash sales 45 000 Receipts from credit customers 110 000 Payments to credit suppliers 134 000 The company maintains a mark-up of 25% on cost. REQUIRED (a) Determine the value of inventory damaged on 31 March 2023. [7] (b) During a recent meeting between managers in the purchasing department and production department, concerns about holding large quantity of inventory in the warehouse was surfaced. Other than damage to inventory due to fire, state three other concerns which management might have with keeping large amounts of inventory. [3]

3 Additional information Following the preparation of the company’s accounts, it was discovered that some adjustments needed to be made. 1 There were 3 units that had been valued at a cost of $20 00 each. However, these units had not been programmed correctly. Each unit will require an upgrade that will cost $150 to make them into a saleable condition. These units can only be sold for $1500 each. 2 Of the units held in inventory, 2 units that cost $2000 each were damaged and had to be scrapped. 3 The company had received goods on credit to the value $3500 during the last week of April and had recorded them correctly. This inventory, however, had not been included in the inventory count. 4 There were 4 completed units costing