Prepared by D.

El-Hoss

Sole Trader
Final Accounts

www.igcseaccounts.com

All questions are the copyright of Cambridge International Examination Board.

 Prepared by D. El-Hoss
4 For
Examiner’s
Use
2 Danbi Wyske runs her business from rented premises. The following balances were
extracted from her books on 30 April 2003.

$
Stock 1 May 2002 4 000
Sales 80 000
Purchases 62 000
Debtors 10 000
Creditors 9 000
Electricity paid 3 000
General expenses 7 000
Cash at bank 5 000
Drawings 8 000
Rent and insurance paid 6 000
Equipment at cost 45 000
Provision for depreciation of equipment 16 000
Capital ?

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0452/02/M/J/03
All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
5 For
Examiner’s
Use
(a) Using the columns below, prepare Danbi’s trial balance as at 30 April 2003, showing her
Capital account balance.

Danbi Wyske

Trial Balance as at 30 April 2003

Dr Cr
$ $

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

www.igcseaccounts.com
––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– ............................. .............................

––––––––––––––––––––––––––––– –––––––––––––– –––––––––––––––

[14]
–––––––––––––– –––––––––––––––

(b) Name the ledger account to which a difference on a trial balance may be posted.

......................................................................................................................................[1]

0452/02/M/J/03 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
6 For
Examiner’s
Use
3 Andy Mann owns a general store. His Trading and Profit and Loss Account for the year
ended 31 March 2003 is shown below. Some words and figures are missing.

(a) In each of the boxes (i) to (vi) enter the missing word(s) or figure.

Andy Mann

Trading and Profit and Loss Account for the year ended 31 March 2003

$ $ $
Sales 200 000
Less Cost of goods sold
Opening stock (i)
Purchases 120 000
Less (ii) 2 000 118 000
–––––– ––––––
130 000
Less (iii) 10 000 120 000
–––––– ––––––

Gross Profit 80 000

Add Rent received (iv)
Discount (v) 3 000
––––––
88 000
Less Wages 12 000
Insurance 3 000
General expenses
Depreciation
www.igcseaccounts.com
(vi)
28 000
58 000
––––––
Net Profit 30 000
––––––
[6]

(b) Calculate Andy’s net profit as a percentage of his sales for the year. Show your
workings.

..........................................................................................................................................

..........................................................................................................................................

......................................................................................................................................[2]

0452/02/M/J/03
All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
7 For
Examiner’s
Use
3 (c) On 31 March 2003 Andy’s capital was $200 000. He also had a long-term loan from his
bank of $50 000.

Calculate Andy’s net profit as a percentage of the capital employed in his business.

Show your workings.

..........................................................................................................................................

..........................................................................................................................................

......................................................................................................................................[3]

(d) Give two reasons why it is important for Andy to know his net profit as a percentage of
the capital employed.

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

......................................................................................................................................[4]
www.igcseaccounts.com

0452/02/M/J/03 [Turn over

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 Prepared by D. El-Hoss
2
For
Examiner's
1 The following Trial Balance was extracted from the books of Salem Ahmed at 31 July 2006. Use

$ $
Capital 62 000
Drawings 7 200
Premises at cost 38 000
Fixtures at valuation 7 800
Equipment at cost 5 000
Provision for depreciation of equipment 950
Provision for doubtful debts 130
Debtors 9 000
Bad debts recovered 170
Creditors 7 970
Bank 4 755
Stock 1 August 2005 10 260
Sales 89 500
Purchases 65 700
Sales returns 1 100
Carriage outwards 210
Discount allowed 600
Discount received 610
Administration expenses 21 215
166 085 166 085

Additional information

1 During the year ended 31 July 2006 Salem took goods costing $1260 for his own use.

www.igcseaccounts.com
No entries had been made in the accounting records.

2 The provision for doubtful debts is to be maintained at 2 % of the debtors.

3 Equipment is to be depreciated at 10 % per annum using the reducing balance method.

4 Fixtures were valued at $7250 on 31 July 2006. No fixtures were bought or sold during
the year ended 31 July 2006.

5 Because of illness, Salem was unable to value the stock on 31 July 2006. Salem’s
gross profit margin is 25 %.

REQUIRED

Prepare the Trading and Profit and Loss Account of Salem Ahmed for the year ended
31 July 2006.

The value of the stock on 31 July 2006 should be clearly shown in the Trading Account.

A Balance Sheet is not required.

© UCLES 2006 0452/03 O/N/06

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
3
For
Examiner's
Salem Ahmed Use
Trading and Profit and Loss Account for the year ended 31 July 2006

www.igcseaccounts.com

[18]

[Total: 18]

© UCLES 2006 0452/03 O/N/06 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
4 For
Examiner's
Use
2 (a) Insert the missing words and figures in the following trading and profit and loss
account.

Shin Lee
Trading and Profit and Loss Account
for the year ended 31 March 2007

Sales 130 000

Less: sales returns (i)

125 000

Cost of goods sold

Stock at (ii) 42 000

Add: purchases (iii)

carriage (iv) 2 000

124 000

Less: Stock at 31 March 2007 36 000

www.igcseaccounts.com
88 000

Gross profit (v)

Rent 1 200

Electricity 600

Water charges 350

Wages (vi)

Provision for depreciation 1 450

9 200

(vii) (viii)

[8]

© UCLES 2007 0452/02/M/J/07

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
5 For
Examiner's
Use
(b) From the information in part (a) calculate to two decimal places Shin Lee’s rate of
stock turnover for the year ended 31 March 2007.

Show your workings.

[4]

(c) Give one example of a business with:

(i) A high rate of stock turnover;

www.igcseaccounts.com
(ii) A low rate of stock turnover.

[4]

[Total: 16]

© UCLES 2007 0452/02/M/J/07 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12

4 Gorman Limited has prepared the following trial balance from the company’s accounting For
records for the year ended 30 September 2010. Examiner's
Use

Gorman Limited
Trial Balance at 30 September 2010

$ $
Bank (overdrawn) 2 200
Revenue (sales) 92 000
Ordinary goods purchased (purchases) 70 300
Carriage inwards 600
Inventory (stock) at 1 October 2009 13 900
Rent payable 2 600
Property tax 1 500
Electricity 850
Wages and salaries 5 250
Equipment and office fittings 17 000
Provision for depreciation
on equipment and office fittings 1 700
Repairs and maintenance 1 100
Administrative expenses 4 000
Retained profit at 1 October 2009 28 000
Share capital 9 000
Trade receivables (debtors) 17 600
Trade payables (creditors) 1 800
134 700 134 700

www.igcseaccounts.com
Additional information

1 Inventory (stock) at 30 September 2010 was $14 300.

2 Wages accrued but unpaid were $500.

3 Property tax prepaid was $300.

4 The bank statement for 30 September showed bank charges of $120. This has not
been entered in the books.

5 Depreciation of $1700 is to be provided for the year.

REQUIRED

(a) Define a trial balance.

[3]

© UCLES 2010 0452/13/O/N/10

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
13

(b) Prepare Gorman Limited’s income statement (trading and profit and loss account) for For
the year ended 30 September 2010. Examiner's
Use

Gorman Limited
Income Statement (Trading and Profit and Loss Account)
for the year ended 30 September 2010

www.igcseaccounts.com

[13]

© UCLES 2010 0452/13/O/N/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
14

(c) Name the accounting principle which has been applied to the amount included in the For
income statement (trading and profit and loss account) for each of the following. Examiner's
Use

(i) Inventory (stock)

(ii) Property tax

[4]

(d) From your answer to (b) calculate Gorman Limited’s rate of inventory (stock) turnover.

Show your workings.

[5]

(e) Gorman Limited had a bank overdraft at 30 September 2010. Suggest one way in which
the company could reduce or eliminate the overdraft.
www.igcseaccounts.com

[2]

[Total: 27]

© UCLES 2010 0452/13/O/N/10

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
8

3 Stella Maris started a business as a bookseller on 1 May 2008 with initial capital of $10 000 For
which she deposited in a new business bank account. Examiner's
Use

She is not an experienced bookkeeper but has drawn up the following trial balance at
31 October 2008. Stella has put certain balances in the wrong column and may have made
other errors.

Trial Balance at 31 October 2008

Debit Credit
$ $

Capital 10 000
Shelving and equipment 5 000
Purchases 24 000
Rent payable 6 000
Sales 34 900
Stock at 31 October 2008 5 300
General expenses 2 500
Cash at bank 7 400
Difference 300
47 700 47 700

REQUIRED

(a) State which accounting principle Stella was following when she deposited her initial

www.igcseaccounts.com
capital into a new business bank account.

[2]

(b) Name the account in which an unexplained difference on a trial balance should be
entered.

[1]

© UCLES 2008 0452/02/O/N/08

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
9

(c) Prepare a corrected trial balance at 31 October 2008. For

Examiner's
Use
Stella Maris
Trial Balance at 31 October 2008

Debit Credit
$ $

www.igcseaccounts.com

[10]

© UCLES 2008 0452/02/O/N/08 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
10

(d) Using the information above, complete Stella’s trading and profit and loss account for For
the six months ended 31 October 2008. Examiner's
Use

Stella Maris
Trading and Profit and Loss Account for the six months ended 31 October 2008

$ $

Sales

Stock at 1 May 2008 nil

Purchases

Stock at 31 October 2008

Cost of sales

www.igcseaccounts.com
Gross profit

Expenses

Rent

General expenses

Net profit

[9]

[Total: 22]

© UCLES 2008 0452/02/O/N/08

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12

5 Gordon has prepared the following trial balance after calculating his net profit for the year For
ended 31 March 2009. Examiner's
Use

Gordon
Trial balance at 31 March 2009

$ $
Bank 700
Bank loan repayable 2011 6 000
Capital at 1 April 2008 6 400
Creditors 2 100
Debtors 3 400
Drawings 12 000
Motor vehicles 4 000
Net profit for the year 12 900
Plant and equipment 8 000
Provision for depreciation
Plant and equipment 1 600
Motor vehicles 1 000
Stock at 31 March 2009 1 900
30 000 30 000

REQUIRED

(a) Prepare Gordon’s capital account for the year ended 31 March 2009.

www.igcseaccounts.com
Gordon
Capital account

[4]

© UCLES 2009 0452/02/M/J/09

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
13

(b) Prepare Gordon’s balance sheet at 31 March 2009. For

Examiner's
Use
Gordon
Balance sheet at 31 March 2009

www.igcseaccounts.com

[8]

© UCLES 2009 0452/02/M/J/09 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
14

(c) From Gordon’s balance sheet, calculate each of the following ratios to two decimal For
places. Show your workings. Examiner's
Use

(i) Current ratio

(ii) Quick ratio

[6]

www.igcseaccounts.com
(d) Place a tick (
) in one of the boxes below to show which of these two ratios Gordon
should use to decide if he can afford to pay his creditors.

current ratio

quick ratio

[2]

[Total: 20]

© UCLES 2009 0452/02/M/J/09

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
9

4 Timpani Ltd makes machine parts and their financial year ends on 31 March. After For
preparing the income statement (trading and profit and loss account) for the year ended Examiner's
Use
31 March 2010 the trial balance showed the following items.

$
Bank 500 Dr
Bank loan (repayable 2011) 2 800
Trade payables (creditors) 700
Trade receivables (debtors) 1 000
Plant and equipment 20 000
Provision for depreciation 12 000
Inventory (stock) at cost 3 000
Share capital 5 000
Profit for the year 4 000

Timpani Ltd found that the inventory (stock) could be sold for only $2700.

REQUIRED

(a) (i) State the basis on which inventory (stock) should be valued at the end of a
financial year.

[3]

www.igcseaccounts.com
(ii) State the value that Timpani Ltd should use for inventory (stock) in the balance
sheet at 31 March 2010.

[1]

(iii) State the effect on the company’s profit for the year of adjusting the value of
inventory (stock).

[2]

© UCLES 2010 0452/11/M/J/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
10

REQUIRED For
Examiner's
Use
(b) Prepare Timpani Ltd’s balance sheet at 31 March 2010.

Timpani Ltd
Balance Sheet at 31 March 2010

www.igcseaccounts.com

[11]

© UCLES 2010 0452/11/M/J/10

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
11

Timpani Ltd must repay its bank loan by 31 March 2011. The company is not sure if it will For
be able to repay the loan. Examiner's
Use

Timpani Ltd decides to take some action to enable it to repay the bank loan when it
becomes due.

REQUIRED

(c) For each proposed action place a tick (
) under the correct heading to show if it might
be successful.

Successful Not successful

Reduce dividend paid

Reduce depreciation

Reduce trade payables (creditors)

[6]

(d) (i) Name the accounting principle which states that a business is assumed to
continue to operate indefinitely.

www.igcseaccounts.com
[1]

(ii) If a business is not expected to continue, state the value at which its assets should
be valued in the balance sheet.

[2]

[Total: 26]

© UCLES 2010 0452/11/M/J/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
11

4 The following summary list of balances was taken from the books of Deali, a sole trader, on For
31 March 2010. Examiner's
Use

$
Revenue (sales) 125 000
Inventory (stock) 14 500
Ordinary goods purchased (Purchases) 76 000
Bank (overdraft) 2 300 Cr
Equipment 9 000
Trade receivables (debtors) 1 700
Trade payables (creditors) 2 800
Expenses 37 500
Capital 15 500
Drawings 8 000

REQUIRED

(a) Give one reason for preparing a trial balance.

www.igcseaccounts.com
[1]

© UCLES 2010 0452/12/M/J/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12

(b) Prepare Deali’s trial balance at 31 March 2010. For

Examiner's
Use
Show any difference you find as a balance on a suspense account.

Deali
Trial Balance at 31 March 2010

www.igcseaccounts.com

[11]

After the trial balance had been prepared, it was found that an error had been made in the
books of account. Sales of $1100 had been entered in the cash book but not posted to the
ledger.

REQUIRED

(c) Show the journal entry, with narrative, to correct this error.

Dr Cr
Date
$ $

[5]

© UCLES 2010 0452/12/M/J/10

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
13

(d) Deali had inventory (stock) of $18 000 at 31 March 2010. For
Examiner's
Use
Assuming that the journal entry in part (c) has been posted, complete Deali’s summary
income statement (trading and profit and loss account) for the year ended 31 March
2010.

Deali
Summary Income Statement (Trading and Profit and Loss Account)
for the year ended 31 March 2010

$ $

Revenue (sales) (i)

Inventory (stock) at 1 April 2009 (ii)

Ordinary goods purchased (Purchases) (iii)

www.igcseaccounts.com
Inventory (stock) at 31 March 2010
(iv)

Cost of sales (v)

Gross profit (vi)

Expenses (vii)

Net profit (viii)

[8]

[Total: 25]

© UCLES 2010 0452/12/M/J/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
2

1 The following trial balance was extracted from the books of Robbie McDonald at For
30 September 2010. Examiner's
Use

Dr Cr
$ $
Capital 85 000
Drawings 5 100
Premises at cost 58 000
Motor vehicle at cost 6 000
Equipment at valuation 3 000
Provision for depreciation of motor vehicle 1 200
Provision for doubtful debts 372
Trade receivables (debtors) 17 600
Bad debts recovered 160
Trade payables (creditors) 16 250
Bank overdraft 7 728
Inventory (stock) 1 October 2009 19 500
Revenue (sales) 216 000
Purchases 176 000
Wages 28 200
Property tax and insurance 8 900
Administration expenses 4 410 ______
326 710 326 710

Additional information

www.igcseaccounts.com
1 Because of an oversight the inventory (stock) on 30 September 2010 was not
valued. Robbie marks up all his stock by 25%.

2 During the year ended 30 September 2010 Robbie took goods costing $1900 for
his own use. No entries have been made in the accounting records.

3 The motor vehicle is being depreciated at 20% per annum using the reducing
balance method.

4 Equipment was valued at $2340 on 30 September 2010. There were no sales or

purchases of equipment during the year.

5 The provision for doubtful debts is to be maintained at 2% of the trade receivables

(debtors).

6 A bank statement received on 30 September 2010 included an entry for bank

interest of $1550. No entries have been made in the accounting records.

7 The property tax and insurance includes $2400 for insurance of the premises. This
represents insurance cover for the sixteen months to 31 January 2011.

REQUIRED

Prepare the income statement (trading and profit and loss account) of Robbie McDonald for
the year ended 30 September 2010.

The value of the inventory (stock) on 30 September 2010 should be clearly shown in the
income statement (trading and profit and loss account).

© UCLES 2010 0452/21/O/N/10

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
3

Robbie McDonald For

Income Statement (Trading and Profit and Loss Account) for the Examiner's
Use
year ended 30 September 2010

www.igcseaccounts.com

[20]

[Total: 20]

© UCLES 2010 0452/21/O/N/10 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
6

2 The following trial balance was extracted from the books of Sabena Khan at For
31 January 2011. Examiner's
Use

$ $
Capital 1 February 2010 55 686
Drawings 4 800
Premises at cost 30 000
Equipment at valuation 4 500
Fixtures and fittings at cost 5 400
Provision for depreciation of fixtures and fittings 1 080
Inventory 1 February 2010 7 500
Trade receivables 4 900
Bad debts 50
Bad debts recovered 150
Provision for doubtful debts 116
Carriage outwards 700
Revenue 58 200
Purchases 51 400
Purchases returns 2 300
Trade payables 5 100
Bank 5 240
Administration expenses 7 960
Discount allowed 182
122 632 122 632

Additional information:

www.igcseaccounts.com
1 Sabena Khan did not value her inventory on 31 January 2011 due to an oversight.
Her gross profit margin is 20%.

2 The provision for doubtful debts is to be maintained at 2% of trade receivables.

3 Equipment was valued at $3800 on 31 January 2011. No equipment was bought or

sold during the year ended 31 January 2011.

4 Fixtures and fittings are to be depreciated by 10% per annum on cost.

REQUIRED

Prepare the income statement of Sabena Khan for the year ended 31 January 2011.

The income statement should clearly show the gross and net profits for the year and the
value of the inventory on 31 January 2011.

You may use the space below for your workings.

© UCLES 2011 0452/22/M/J/11

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
7

Sabena Khan For

Income Statement for the year ended 31 January 2011 Examiner's
Use

www.igcseaccounts.com

[18]

[Total: 18]

© UCLES 2011 0452/22/M/J/11 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
4 For
Examiner’s
Use
2 The following trial balance was extracted from the books of Amir Sadiq as at 31 March 2003.

$ $
Capital 33 000
Drawings 2 500
Buildings at cost 20 000
Fixtures and equipment at valuation 3 400
Motor vehicles at cost 8 000
Provision for depreciation of motor vehicles 3 250
Provision for doubtful debts 200
Debtors 7 500
Creditors 6 700
Bank overdraft 2 880
Motor vehicle expenses 1 240
General expenses 2 030
Wages 11 940
Insurance 1 470
Carriage inwards 700
Discount received 250
Sales 92 100
Purchases 68 500
Sales returns 1 200
Stock 1 April 2002 9 900
––––––– –––––––
138 380 138 380
––––––– –––––––

Additional information www.igcseaccounts.com

1. At 31 March 2003:
Stock was valued at $10 200.
Wages outstanding amounted to $1080.
Insurance prepaid amounted to $210.

2. During the year ended 31 March 2003 Amir took goods costing $300 for his own use.
No entries had been made in the accounting records.

3. The provision for doubtful debts is to be maintained at 2% of the debtors.

4. Motor vehicles are to be depreciated at 20% per annum using the reducing balance
method.

5. Fixtures and equipment were valued at $2800 on 31 March 2003. No fixtures and
equipment were bought or sold during the year ended 31 March 2003.

0452/03/M/J/03
All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
11 For
Examiner’s
Use
(a) Prepare Elmer Gantry’s Trading and Profit and Loss Account for the year ended
30 September 2003.

Elmer Gantry

Trading and Profit and Loss Account for the year ended 30 September 2003

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

www.igcseaccounts.com
..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

....................................................................................................................................[18]

0452/02/O/N/03 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12 For
Examiner’s
Use
(b) (i) State what is meant by the accounting concept of matching.

...................................................................................................................................

...................................................................................................................................

...................................................................................................................................

...................................................................................................................................

...................................................................................................................................

...............................................................................................................................[2]

(ii) Explain how the matching principle is applied to insurance in Elmer’s Profit and
Loss Account.

...................................................................................................................................

...................................................................................................................................

...................................................................................................................................

...................................................................................................................................

...............................................................................................................................[2]

www.igcseaccounts.com

0452/02/O/N/03
All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
3 For
Examiner’s
Use
2 Martha Adebuyo owns a retail shop. Her financial year ends on 31 August. Her Trading and
Profit and Loss Account for the year ended 31 August 2004 is shown below. Some words
and figures are missing.

(a) In each of the boxes (i) to (vii) enter the missing word(s) or figures.

Trading and Profit and Loss Account for the year ended 31 August 2004

$ $ $
Sales 106 000
Less Sales returns (i) 100 000
––––––

Less Cost of goods sold

Opening (ii) 12 000
Purchases (iii)
Less Purchase returns 4 000
––––––
67 000
Plus Carriage (iv) 5 000 72 000
–––––– ––––––
84 000
Less Closing stock (v) 70 000
–––––– ––––––

Gross profit 30 000

Add Rent (vi) 6 000
www.igcseaccounts.com ––––––
36 000
Less Wages 14 000
Insurance 3 000
General expenses (vii) 24 000
–––––– ––––––
––––––
Net profit 12 000
––––––
[7]

(b) Calculate, showing your workings, Martha’s

(i) gross profit as a percentage of her sales for the year;

...................................................................................................................................

...................................................................................................................................

...............................................................................................................................[2]

(ii) net profit as a percentage of her sales for the year.

...................................................................................................................................

...................................................................................................................................

...............................................................................................................................[2]

© UCLES 2004 0452/02/O/N/04 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
4 For
Examiner’s
Use
2 Bonnie Clyde makes parts for cars and her financial year ends on 31 March. After preparing
her Trading and Profit and Loss Account for the year ended 31 March 2005 her trial balance
shows the following items.

$
Bank 500 Dr
Bank loan repayable 2008 2 800
Creditors 700
Debtors 1 000
Machinery 20 000
Provision for depreciation on machinery 12 000
Stock 3 000
Drawings 4 500
Capital account at 1 April 2004 6 000
Profit for the year 7 500

REQUIRED

(a) Prepare Bonnie’s Balance Sheet at 31 March 2005.

Bonnie Clyde
Balance Sheet at 31 March 2005.

..........................................................................................................................................

www.igcseaccounts.com
..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

..........................................................................................................................................

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© UCLES 2005 0452/02 M/J/05

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
5 For
Examiner’s
Use

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....................................................................................................................................[12]

(b) (i) Define working capital.

...............................................................................................................................[1]

(ii) From your answer to (a) above, calculate Bonnie’s working capital at
31 March 2005.

...................................................................................................................................

...................................................................................................................................
www.igcseaccounts.com
...............................................................................................................................[3]

[Total: 16]

© UCLES 2005 0452/02 M/J/05 [Turn over

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6 For
Examiner’s
Use
3 Smith has a business selling washing machines. He buys the goods from the manufacturers
and sells them to stores and other suppliers.

He keeps full accounting records and his trial balance at 30 June 2005 is shown below.

Smith
Trial balance at 30 June 2005

Dr. Cr.
$ $
Advertising 400
Bank 3 200
Carriage inwards 700
Creditors 8 600
Debtors 14 800
Provision for depreciation of fixed assets 2 800
Drawings 24 000
Fixtures & Fittings 5 600
General expenses 390
Insurance 420
Lighting and heating 600
Motor car 12 000
Motor expenses 860
Office expenses 280
Rent 720
Postage and stationery 180
Purchases 75 600
Sales
Capital
www.igcseaccounts.com
102 000
40 000
Stock at 1 July 2004 8 400
Wages and salaries 5 250 _______
153 400 153,400

The following additional information is available.

1 Stock at 30 June 2005 was valued at $7 100.

2 Motor expenses of $350 are to be accrued.
3 Depreciation of $700 for the year is to be charged.
4 Purchase invoices of $4 000 have not been included but the goods are included in the
closing stock valuation.

0452/02 O/N/05
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Examiner’s
Use
(a) Prepare Smith’s Trading and Profit and Loss Account for the year ended 30 June 2005

Smith
Trading and Profit and Loss Account for the year ended 30 June 2005

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www.igcseaccounts.com
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All questions are the copyright of Cambridge International Examination Board.
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8 For
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Use
(b) (i) Calculate to two decimal places Smith’s gross profit percentage for the year. Show
your workings.

...................................................................................................................................

...............................................................................................................................[2]

(ii) Calculate to two decimal places Smith’s net profit percentage for the year. Show
your workings.

...................................................................................................................................

...............................................................................................................................[2]

(c) Jones has a similar business and his gross profit percentage is higher than Smith’s.
Suggest two reasons for this difference.

(i) ...................................................................................................................................

...................................................................................................................................

(ii) ...................................................................................................................................

...............................................................................................................................[4]

[Total: 24]

www.igcseaccounts.com

© UCLES 2005 0452/02 O/N/05

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12 For
Examiner’s
Use
5 Anvil has prepared the following trial balance (after calculating net profit) for the year ended
31 August 2005.

Anvil
Trial Balance at 31 August 2005
$ $
Plant and equipment 45 000
Motor cars 22 000
Provision for depreciation
Plant and equipment 12 000
Motor cars 5 400
Accruals 3 300
Bank and cash 22 400
Bank loan repayable 2009 15 000
Creditors 32 000
Debtors 52 000
Prepayments 1 800
Stock at 31 August 2005 16 000
Capital 91 000
Drawings 30 000
Net profit _______ 30 500
189 200 189 200

(a) Prepare Anvil’s Balance Sheet at 31 August 2005.

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www.igcseaccounts.com
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© UCLES 2005 0452/02 O/N/05
All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
13 For
Examiner’s
Use

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....................................................................................................................................[16]

(b) From Anvil’s Balance Sheet, calculate the following ratios to two decimal places.

(i) Current ratio www.igcseaccounts.com

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...............................................................................................................................[3]

(ii) Quick ratio

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[Total: 22]

© UCLES 2005 0452/02 O/N/05

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
6
For
Examiner's
3 Hilota has a business supplying spare parts for cars. His financial year ends on 31 March. Use
At 31 March 2006 his accounts showed the following balances:

$
Fixed assets at cost 22 000
Provision for depreciation 9 300
Stock (at 1 April 2005) 3 200
Balance at bank (Dr) 1 550
Sales 56 500
Sales returns 500
Purchases 34 200
Carriage outwards 950
Rent 4 000
Wages 7 200
General expenses 2 600
Capital 20 000
Drawings 9 600

REQUIRED

(a) Prepare Hilota’s Trial Balance at 31 March 2006.

Hilota
Trial Balance at 31 March 2006

Dr Cr

www.igcseaccounts.com
$ $

[12]

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All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
7
For
Examiner's
Hilota has stock on hand at 31 March 2006 amounting to $3800. Use

REQUIRED

(b) From the information above and in part (a), prepare Hilota’s Trading Account for the
year ended 31 March 2006.

Hilota
Trading Account for the year ended 31 March 2006

www.igcseaccounts.com

[7]

(c) (i) Calculate Hilota’s gross profit percentage for the year, to two decimal places.

[3]

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All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
8
For
Examiner's
(ii) On the basis that Hilota had no sales returns in the period, calculate his revised Use
gross profit percentage to two decimal places.

[3]

[Total: 25]

www.igcseaccounts.com

© UCLES 2006 0452/02/M/J/06

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
6 For
Examiner's
Use
3 Morgan is in business as a printer. He has prepared the following Trial Balance (after
calculating net profit) from his accounting records for the year ended 31 August 2006.

Morgan
Trial Balance at 31 August 2006
$ $
Machinery at cost 7 000
Office equipment at cost 2 500
Provision for depreciation
Machinery 1 400
Office equipment 1 000
Accrued expenses 300
Bank 2 200
Cash 200
Creditors 1 800
Debtors 3 500
Loan from Nicola repayable 2011 5 000
Prepayments 600
Stock at 31 August 2006 3 900
Capital 9 000
Drawings 21 000
Profit for the year _____ 18 000
38 700 38 700

REQUIRED

www.igcseaccounts.com
(a) State which accounting principle has been applied in the treatment of each of the
following items:

(i) Profit for the year;

(ii) Stock.

[4]

© UCLES 2006 0452/02/O/N/06

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
7 For
Examiner's
Use
(b) Prepare Morgan’s Balance Sheet at 31 August 2006.

Morgan
Balance Sheet at 31 August 2006

www.igcseaccounts.com

[13]

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 Prepared by D. El-Hoss
8 For
Examiner's
Use
(c) Morgan’s business has a bank overdraft at 31 August 2006. Suggest one way in which
he could reduce or eliminate the overdraft.

[2]

(d) Nicola has given Morgan an additional long term loan of $2000 paid into the bank on
1 September 2006.

In the table below, place a tick (
) under the correct heading to indicate the effect of
the additional loan on the following items in Morgan’s Balance Sheet:

Effect of additional loan

Increase Decrease No effect

(i) Bank overdraft

(ii) Loan account

(iii) Working capital

(iv) Profit for the year

(v) Capital
www.igcseaccounts.com
[5]

[Total: 24]

© UCLES 2006 0452/02/O/N/06

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
14

5 The following is the trial balance of Rachel Smith at 31 March 2012. For
Examiner's
Use
$ $
Bank 5280
Cash 160
Purchases 42 500
Revenue 63 100
Inventory at 1 April 2011 3 100
Carriage inwards 1 050
Carriage outwards 540
Purchase returns 1 900
Premises 38 600
Equipment 9 600
Provision for depreciation of equipment 3 840
Trade receivables 5 000
Trade payables 3 900
Bad debts 190
General expenses 1 620
Property tax 6 000
Wages 7 100
Capital 48 000
120 740 120 740

The following additional information is available at 31 March 2012.

1 Inventory was valued at $3750.

www.igcseaccounts.com
2 A bonus of $180 is to be accrued in the wages account.

3 Property tax includes $1200 paid in advance.

4 Depreciation of $1920 is to be provided for the year.

5 A provision for doubtful debts of 3% of the trade receivables is to be created.

REQUIRED

(a) Prepare the income statement for the year ended 31 March 2012.

© UCLES 2012 0452/12/M/J/12

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
15

Rachel Smith For

Income Statement for the year ended 31 March 2012 Examiner's
Use

www.igcseaccounts.com

[16]

© UCLES 2012 0452/12/M/J/12 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
16

(b) (i) From your answer to (a), calculate the percentage of gross profit to revenue. Show For
your workings and give your answer to two decimal places. Examiner's
Use

[2]

(ii) Suggest one way in which Rachel Smith could improve this percentage.

[2]

(c) (i) From your answer to (a), calculate the percentage of profit for the year to revenue.
Show your workings and give your answer to two decimal places.

www.igcseaccounts.com [2]

(ii) Suggest one way in which Rachel Smith could improve this percentage.

[2]

[Total: 24]

© UCLES 2012 0452/12/M/J/12

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
10

3 Mark Mutanda is a business consultant. His financial year ends on 31 January. He provided For
the following information on 31 January 2012. Examiner's
Use

$
Income from clients 82 100
Insurance 5 630
Wages and salaries 33 000
Rent received 2 600
Rates paid 5 200
Provision for doubtful debts 1 February 2011 154
Loan interest paid 900
Office expenses 17 177
Cash drawings 16 000
Capital 1 February 2011 200 000

Additional information

1 On 31 January 2012 insurance prepaid amounted to $2320 and wages of $3200 are to be
accrued.

2 The rent received covers a period of 13 months to 28 February 2012.

3 The office expenses includes $214 for Mark Mutanda’s home telephone bill.

4 A 10-year loan of $20 000 was received on 1 February 2011. Interest is charged at 6%
per annum. www.igcseaccounts.com
5 The provision for doubtful debts is maintained at 2% of the trade receivables.
On 31 January 2012 the trade receivables totalled $6800.

6 Fixtures and fittings cost $5250. They are depreciated at 10% per annum on the
straight line method.

7 Office equipment was valued at $1900 on 1 February 2011.

Additional office equipment costing $600 was purchased during the year.
There were no sales of office equipment during the year.
On 31 January 2012 the office equipment was valued at $2100.

© UCLES 2012 0452/21/M/J/12

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 Prepared by D. El-Hoss
11

REQUIRED
For
(a) Prepare the income statement of Mark Mutanda for the year ended 31 January 2012. Examiner's
Use

Mark Mutanda
Income Statement for the year ended 31 January 2012

www.igcseaccounts.com

[18]

© UCLES 2012 0452/21/M/J/12 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
12

(b) Write up the capital account of Mark Mutanda for the year ended 31 January 2012. For
Examiner's
Use
Where a traditional “T” account is used it should be balanced and the balance brought
down on 1 May 2012.

Where a three-column running balance account is used the balance column should be
updated after each entry.

Mark Mutanda
Capital account

[6]

www.igcseaccounts.com
(c) Calculate the return on capital employed (ROCE) for Mark Mutanda.

Use the total capital employed on 1 February 2011.

Show your workings and give your answer to two decimal places.

[3]

(d) Explain the importance of the return on capital employed (ROCE).

[2]

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All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
13

(e) The return on capital employed (ROCE) is lower than it was in the previous year.
Suggest one reason for this. For
Examiner's
Use

[2]

[Total: 31]

www.igcseaccounts.com

© UCLES 2012 0452/21/M/J/12 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
17

(d) Prepare the balance sheet of the Dhavari Sports Club at 31 March 2012.
For
Examiner's
Dhavari Sports Club Use
Balance Sheet at 31 March 2012

www.igcseaccounts.com

[12]

[Total: 24]

© UCLES 2012 0452/21/M/J/12 [Turn over

All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
18

5 Tania Yousaf sells office equipment. She values her inventory at the lower of cost and net For
realisable value. Examiner's
Use

REQUIRED

(a) Explain the meaning of the term “cost”.

[2]

(b) Explain the meaning of the term “net realisable value”.

[2]

(c) Explain how valuing inventory at the lower of cost and net realisable value is an
application of the principle of prudence.

www.igcseaccounts.com
[2]

(d) After the preparation of her financial statements for the year ended 31 December 2011,
Tania Yousaf discovered that the closing inventory had been overvalued by $400.

Complete the table below to show the effect of this.

The first one has been completed as an example.

overstated understated no effect

gross profit for the year ended
(i)
31 December 2011

profit for the year ended 31
(ii)
December 2012
credit balance on capital
(iii)
account on 1 January 2013
[4]

© UCLES 2012 0452/21/M/J/12

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 Prepared by D. El-Hoss
19

After correcting the financial statements, Tania Yousaf provided the following information: For
Examiner's
Use
$
Revenue for the year ended 31 December 2011 87 000
Inventory at 1 January 2011 6 000
Inventory at 31 December 2011 7 400

Gross profit margin 20%

REQUIRED

(e) Calculate the rate of inventory turnover.

Show your workings and give your answer to two decimal places.

www.igcseaccounts.com [3]

(f) The rate of inventory turnover was better in 2011 than in 2010. Suggest one reason for this.

[2]

(g) State one factor that Tania Yousaf should consider before comparing the results of her
business with those of another business.

[1]

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All questions are the copyright of Cambridge International Examination Board.
 Prepared by D. El-Hoss
20

(h) State two reasons why Tania Yousaf is interested in the financial statements of her For
credit customers. Examiner's
Use

(i)

(ii)

[2]

(i) State one reason why each of the following business people are interested in Tania
Yousaf’s financial statements.

(i) Employee

(ii) Bank manager

[2]
www.igcseaccounts.com [Total: 20]

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