2024 Sec 4 POA Prelim Bukit Panjang Government High with Answer

Name of Candidate: ««««««««««««««««« ( ) Class: ««««« This paper consists of 10 printed pages [Turn over BUKIT PANJANG GOVERNMENT HIGH SCHOOL PRELIMINARY EXAMINATION 2024 SECONDARY 5 GCE 'O' LEVEL SYLLABUS PRINCIPLES OF ACCOUNTS Paper 1 7087/01 15 August, 2024 1 hour 0750 h ± 0850 h READ THESE INSTRUCTIONS FIRST Do not turn over the cover page until you are told to do so. Write in dark blue or black pen on both sides of the paper. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper chips, glue or correction fluid. The use of an approved calculator is allowed. Answer all the questions. The businesses described in this question paper are entirely fictitious. The number of marks is given in brackets [ ] at the end of each question or part question. )25(;$0,1(5¶686( Question 1 / 16 Question 2 / 8 Question 3 / 16 Total: / 40 Candidates answer on the Question Paper No Additional Materials are required.

2 © BPGHS Preliminary Examination 2024 7087/01 1 Xin Catering specialises in food catering services. On 1 January 202 3, the business purchased a delivery van and paid the following by bank transfer. $ Purchase price of delivery van 120 000 Delivery cost of delivery van 6 500 Import tax 2 800 Annual road tax 1 250 REQUIRED (a) Explain the difference between capital expenditure and revenue expenditure. [2] (b) Prepare the journal entries to record the capital and revenue expenditures . Narrations are not required. Journal Date 2023 Particulars Debit $ Credit $ Jan 1 [4] The financial year end of Xin Catering ends on 30 June. The following balances were extracted on 1 July 2023. $ Motor vehicles 275 000 Accumulated depreciation of motor vehicles 92 250

3 © BPGHS Preliminary Examination 2024 7087/01 [Turn over On 1 October 2023, one of the motor vehicles was sold. The following ledger account was provided. Sales of non-current asset account Date Particular Debit Credit Balance 2023 $ $ $ Oct 1 Motor vehicles 62 000 62 000 Dr Oct 1 Accumulated depreciation of motor vehicles 32 000 ? Oct 1 Other receivable ± Misty Trading 27 000 ? 2024 Jun 30 Income summary ? ? ? ,W LV WKH FRPSDQ\¶V SROLF\ WR GHSUHFLDWH PRWRU YHKLFOHV DW20% per annum using the reducing- EDODQFHPHWKRG$IXOO\HDU¶VGHSUHFLDWLRQLVFKDUJHGLQWKH\HDURIpurchase and no depreciation in the year of sale. REQUIRED (c) Calculate the following for the motor vehicle that was sold. (i) Net book value [1] (ii) Gain or loss on sale of non-current asset [1] (d) Prepare the journal entries t hat took place on 30 June 2024. Narration is not required. Journal Date 2024 Particular Debit $ Credit $ Jun 30 [2]

4 © BPGHS Preliminary Examination 2024 7087/01 (e) Calculate the depreciation of motor vehicles for the year ended 30 June 2024. [2] (f) Using an appropriate accounting theory, explain why a business should depreciate its non-current assets. Accounting theory Explanation [2] (g) Explain why the reducing-balance method is more suitable in depreciating motor vehicles. [2] [Total: 16]

5 © BPGHS Preliminary Examination 2024 7087/01 [Turn over 2 Yee Lin runs a retail shop selling high heels. She provided the following information for the year ended 31 July 2024. Account balances as at 1 August 2023 $ Prepaid advertising expense Commission income receivable 7 900 1 600 The business had the following transactions. Date $ 2024 Feb 5 Received commission income by bank transfer 4 000 Jun 18 Paid for advertising expense by cheque 6 860 Additional information 1 Commission income of $1 500 received was meant for the month of August 2024. 2 Advertising expense of $900 has yet to be paid as at 31 July 2024. REQUIRED (a) Explain what is meant by commission income receivable. [1] (b) Using an accounting theory, explain why it is necessary for Yee Lin to make adjustments for prepaid advertising expense. [2]

6 © BPGHS Preliminary Examination 2024 7087/01 (c) Analyse the effect of not making an adjustment for prepaid advertising expense on 1 August 2023 on: (i) Profit for the year [1] (ii) Statement of financial position [1] Yee Lin also rents out part of the business premises. The rental income received during the year ended 3 1 July 2024 was $ 7 000. There were no amounts outstanding at 1 August 2023. The tenant owed $800 as at 31 July 2024. REQUIRED (d) Prepare an extract of the statement of financial performance for the year ended 31 July 2024 to show the amounts to be included for commission income, rental income and advertising expense. Yee Lin Extract of Statement of Financial Performance for the year ended 31 July 2024 [3] [Total: 8]

7 © BPGHS Preliminary Examination 2024 7087/01 [Turn over 3 Wei Xun is in the business of selling cameras. He provided the following business cash at bank account for the month of May 2022. Cash at bank account Date Particular Cheque Number Debit Credit Balance 2022 $ $ $ May 1 Balance b/d 2 100 Dr 7 Hui Loft Houses 24002 750 1 350 Dr 10 Iman Shoot Studio 1 000 2 350 Dr 14 Bern Foundation 24003 1 600 750 Dr 20 Sales revenue 950 1 700 Dr 24 Lai Leh Furnishing 24004 800 900 Dr 29 Micheal Kor Kor 780 1 680 Dr Jun 1 Balance b/d 1 680 Dr The bank statement received for May 2022 is as follows: Bank statement Date Particular Withdrawal Deposit Balance 2022 $ $ $ May 1 Balance b/d 2 800 Cr 2 Cheque no: 24001 700 2 100 Cr 21 Cash deposit 950 3 050 Cr 22 Cheque no: 24003 1 600 1 450 Cr 23 Credit transfer: Ah Tan Trading 540 1 990 Cr 26 Cheque no: 24004 900 1 090 Cr 28 Direct deposit: Rent 600 1 690 Cr 31 Interest 20 1 670 Cr Additional information: The bank informed Wei Xun that it made an error for cheque number 2400 4 and recorded a wrong amount. REQUIRED (a) Explain the purpose of bank reconciliation. [1]

8 © BPGHS Preliminary Examination 2024 7087/01 (b) Prepare the adjusted cash at bank account for May 2022. Cash at bank account [3] (c) Prepare the bank reconciliation statement as at 31 May 2022. Bank reconciliation statement as at 31 May 2022 [5]

9 © BPGHS Preliminary Examination 2024 7087/01 [Turn over The following information was extracted from the books of Wei Xun¶VEXVLQHVVDVDW June 2022 and 2023. Year ended 30 June 2022 Year ended 30 June 2023 $ $ Sales revenue 220 000 280 000 Less: Cost of sales (89 280) (100 560) Gross profit 130 720 179 440 Additional information: $ Inventory as at 30 June 2021 20 200 Inventory as at 30 June 2022 24 570 Inventory as at 30 June 2023 25 480 REQUIRED (d) Calculate the days sales in inventory for the two years ended 30 June 2022 and 2023. Show your answers to two decimal places. Year ended 30 June 2022 Year ended 30 June 2023 Working [2]

10 © BPGHS Preliminary Examination 2024 7087/01 (e) (YDOXDWHWKHPDQDJHPHQWRILQYHQWRU\E\:HL;XQ¶VEXVLQHVVRYHUWKHWZR\HDUV ended 30