chij tpy 2023 m/s prelims

2023 4E5N Prelim Paper 2 Mark Scheme Q1(a) $ $ Sales revenue 195 430 Less: Sales returns (4 150) Net sales revenue 191 280 [1] Less: Cost of sales (70 200) Gross profit 121 080 [1] Add: Other income Commission income (+1 500) 13 800 [1] Less: Other expenses Rent expense (-600) 18 000 [1] Wages and salaries (+950) 23 400 [1] Utilities expense (-300) 9 500 [1] Depreciation on office equipment (10% of 53 000) 5 300 [1] Depreciation on motor vehicles [(80 000 - 24 000) x 30%] 16 800 [1] Interest on bank loan (25 000 x 5%) 1 250 (74 250) [1] Profit for the year 60 630 [1] OF Penalize up to one mark for wrong format or headings. Q1(b) Assets $ $ $ Non-current assets Cost Accumulated depreciation Net book value Office equipment 53 000 15 900 37 100 [1] Motor vehicles 80 000 40 800 39 200 [1] 76 300 Current assets Trade receivables 23 250 Inventory 30 500 Commission income receivable (+1 500) 1 500 [1] Prepaid rent expense 600 55 850 [1] Total assets 132 150 Equity and liabilities Owner's equity Capital (7 240 + 60 630 - 4 900 - 300) 62 670 [1] Non-current liabilities Long-term borrowings (4/5 x 25 000) 20 000 [1] Current liabilities Trade payables 35 180 [1] Bank overdraft 7 100 [1] Current portion of long-term borrowings 5 000 Interest on bank loan payable 1 250 [1] Wages and salaries payable 950 49 480 [1] Total equity and liabilities 132 150 Penalize up to one mark for wrong format or headings. Jacob Statement of financial performance for the year ended 31 December 2022 Jacob Statement of financial position as at 31 December 2022

Q2 (a) Date Particulars Dr ($) Cr ($) 2022 Jun-30 Sale of non-current asset 90 000 [1] Motor vehicle 90 000 [1] Jun-30 Accumulated depreciation of motor vehicle 32 400 [1] Sale of non-current asset 32 400 [1] Jun-30 Other receivable - Mr Ong 60 000 [1] Sale of non-current asset 60 000 [1] (b) Net book value = 90 000 - 32 400 = $57 600 [1] Gain on sale of non-current asset = 60 000 - 57 600 = $2 400 [1] (c ) It will be shown under the section of Add: Other Income as a gain on sale of non-current asset. [1] (d) Non-current assets are valued at cost less accumulated deprecation. [1] (e ) Purpose of non-current asset [2] Features of non-current asset Customer reviews of non-current asset Warranty Choose any two. Journal

Q3 (a) Days sales in inventory = Average inventory / Cost of sales X 365 days Average inventory = (16 000 + 25 000) / 2 = $20 500 [1] Days sales in inventory (2023) = 20 500 / 175 200 X 365 days = 42.71 days [1] (b) 2021 30.21 days 2022 37.49 days 2023 42.71 days The days sales in inventory for Larry's business is on a worsening trend over the three years ended 30 June [1] 2021, 2022 and 2023. The days sales has increased from 30.21 days in 2021 to 37.49 days in 2022 and to [1] 42.71 days in 2023. This means that the business is taking a longer time to sell all its inventory and is less efficient as managing [1] its inventory over the three years. This could be due to the business increasin