TMU vi . S8mpden Pa ee ; tesrcope 01239020 FORM TP 2013106 hare ‘@ CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE® EXAMINATION PRINCIPLES OF ACCOUNTS, Paper 02 — General Proficiency 3 hours 24 MAY 2013 READ THE FOLLOWING INSTRUCTIONS CAREFULLY. 1. Answer ALL questions in Section I and TWO questions from Section I. | 2. Begin EACH answer on a separate page 3. Keep ALL parts of EACH answer together. 4, Silent electronic non-programmable calculators may be used, but ALL necessary working should be clearly shown. 5. EACH question is worth 20 marks. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO. Copyright © 2012 Car All rights reserved.22- SECTION I Answer the THREE questions in this section. ConEet is a retailer of mobile phones. All of its revenue comes from a percentage of the sales value of VeryBerry mobile phones which it delivers to customers’ homes and workplaces. At the end of the financial year, 31 January 2012, the following balances were presented. s Capital 88 000 ’ Delivery van at cost 60.000 Provision for depreciation: Delivery van 12.000 Bank 121 400 , Sales commissions received 115 500 7 Sales commissions outstanding 14100 Rent 13.300 Rent owing 3.000 Insurance 7100 Insurance prepaid 1 800 Delivery expenses 11 500 Salesmen’s wages 46 700 5-year bank loan 50 000 Loan interest 5500 NOTE: The business calculates annual depreciation expense at a rate of 20% on the reducing balance basis. Using the information provided, prepare for ConEct: (a) An Income Statement for the year ended 31 January 2012 (12 marks) (bd) Aclassified Balance Sheet as at 31 January 2012 (8 marks) Total 20 marks GO ON TO THE NEXT PAGE 01239020/F 20132G) () (c) ae The table below shows sources of the Debtors’ Ledger Control Accounts. Souree of Information Book of Original Entry Total refund to debtors Cash Book Total dishonoured cheques Total credit sales Total retums inwards Receipts from debtors Total discounts allowed ‘Total bad debis| Copy the table in your answer booklet and complete it to show the Book of Original Entry for EACH source of information. An example is given. (6 marks) L, Somerset presented the following information for the month of October 2012: s Creditors ledger control account credit balance b/d 25.400 Creditors ledger control account debit balance b/d 1.450 Returns outwards 1200 Purchases for the quarter 123 900 Payments to creditors 100 300 Refund by cheque from ereditor due to damaged item 1180 Discounts received 2500 Cheque returned by creditor — presented too late to bank 3300 Set off of credit amount between debtors ledger and creditors ledger 620 Received from creditor due to overpayment 284 Prepare the Purchases Ledger Control Account for L. Somerset for the month of October 2012. (9 marks) On 1 November 2012, L. Somerset discovered the following errors in the accounts. (A purchase of equipment worth $2 100 had been included in the purchases figure. (ii) The cheque used to pay a creditor had been entered in the bank account as $12 960 instead of $12 690. Use the general journal to correct the TWO errors above. Narrative for EACH journal entry is required. (S marks) ‘Total 20 marks GO ON TO THE NEXT PAGE 01239020/F 20133. The accountant employed by Reisse Holdings provided the owner with the following report for the financial year ended 30 June 2012. “Reisse Holdings showed a current ratio of 4:1 on its current assets of $60 000. This is a very positive sign because for the year ended 30 June 2011, the ratio was 2:1 on current liabilities of $12,000. (a) Using the formula for current ratio, calculate for Reisse Holdings: (i) The current assets as at 30 June 2011 Gi) The current liabilities as at 30 June 2012 (2 marks) (2 marks) ‘The owner of Reisse Holdings requested additional information on the performance of . the business. The accountant presented the following information for the year ended 30 June 2012. Sales Less: Cost of sales Opening stock Purchases Cost of goods available for sale Less: Closing stock Cost of sales Gross Profit ‘Less: Expenses Rent Maintenance and repairs Discount allowed Wages Depreciation expense Interest on bank loan at 10% per annum, Net Profit 6 800 116.000 122 800 (4.400) 11520 1890 1680 38 500 2570 3540 $ 250.000 118 400) 131 600 (61.700) 01239020/F 2013 GO ON TO THE NEXT PAGE(e) © (d) (e) Using the appropriate formulae, calculate for Reisse Holdings: (i) Average stock (2 marks) Gi) Stock tum (2 marks) ii) Gross profit percentage (@ marks) Show all working clearly. ‘The following additional information was given: Current assets. = $ 60000 Fixed assets = $125 000 Total liabi = $ 67400 Capital = $ 71.600 Drawings = $ 23900 Prepare a summatized balance sheet for Reisse Holdings as at 30 June 2012. Show all necessary details in the capital section. (6 marks) Calculate the return on capital employed for Reisse Holdings for the year ended 30 June 2012. (2 marks) Using any of the ratios calculated above, comment on the performance of Reisse Holdings for the year ended 30 June 2012. (2 marks) ‘Total 20 marks * ~ GO ON TO THE NEXT PAGE 01239020/F 2013LATHOOS MAMSNV ANOA OL GAHOVLLY 34 OL 107 4/0Z06E710 STVLOL sa1ysey juepuane sores s s $s s s s s s s | samoy | step s sed | suonanpap| xey | amoom | puny | Anamsag | ced aed sed} amp | sosinoy | ayer | axojdury PN reo, | auoouy | aiquxey, | uoysuog | yepos | ssory | ompsorg | wuson| axQ | wun | eg PLOT Wady 97 Papua 499A A) 40g yeas noskea Sad Sad ue) “oN worsen Aauarsyorg [es9u9s) — 79 10deq SINNOD9V dO SATAINRId NOLLVNIWVXa «ALVOWMLLAAD NOLLVINGA AUVGNOOAS NVAGIIAVD TIONQDO09 SNOILVNIWVXG NVAGaIavo 3 ao @, y10Z ANAL/AVIN e€OTr107 dL WHOA OZ06ETLO 4409 1841 . %SECTION I Answer any TWO questions from this section. 4. Fashion Forward is a manufacturer of clothing. For the year ended 31 December 2012, the enterprise produced 4 500 dresses. The following relates to the manufacturing operations for the period. Some figures are missing Inventory at 1 January 2012 Raw material ~ 300 metres of printed material at $19 per metre Work in progress $ 2010 Inventory at 31 December 2012 Raw material 340 metres of printed material at $24 per metre Work in progress $ 3790 Purchase of raw material 4 500 metres at $19 per metre 2 150 metres at $24 per metre Retums outwards of raw material 100 metres at $24 per metre Carriage on raw material Direct labour (wages) Cutters (4 500 dresses at $15 each) Stitchers (4 120 dresses at $12 each) Pressers (4.000 dresses at $5 each) > Salary of factory manager Direct expenses Factory power $ 8 400 General factory expenses ‘Annual depreciation on plant and machinery $ 3.400 $38 050 S$ 8.900 $18 050 $16 000 (a) After calculating missing figures, prepare an account or statement for Fashion Forward to show the cost of raw materials consumed. (8 marks) (6) After calculating missing figures, prepare a cost of direct labour statement for Fashion Forward for the year ended 31 December 2012. (4 marks) (©) Starting with cost of raw materials consumed and direct labour cost calculated in (a) and (b), prepare the Manufacturing Account for the year ended 31 December 2012. Show all working clearly. 01239020/F 2013 (8 marks) ‘Total 20 marks GO ON TO THE NEXT PAGE7. 5. Mark and John are employed by EI’s creation. They are paid at $30.00 per hour for a basic 40 hour week. Work done in excess of 40 hours is paid at the rate of time and a half. (2) During a given week, Mark worked 27 hours and John worked 46 hours. Calculate the gross pay for (i) Mark (3 marks) (ii) John (7 marks) The following additional information relates to the payment of Mark and John, Social Security contributions are tax deductible and are calculated on gross pay atthe rate of 5%. Income Tax deductions are calculated on taxable income at the rate of 10% (b) Using your answers from (a) above and the additional information provided in the table above, complete the payroll form which is provided as an insert. (8 marks) (©) State ONE di ference between ‘statutory deductions’ and ‘voluntary deductions’. (2 marks) Total 20 marks GO ON TO THE NEXT PAGE | 01239020/F 2013 |6 (a) _Sautee Credit Union has 1500 members. On I January 2013, the following are some of the account balances on the books of Sautec Credit Union. s Loans to members (due 2016) 145 000 Interest outstanding on loans to members 2250 Stock of stationery supplies 4370 Telephone bill unpaid 1350 Interest income received in advance 2010 Long-term investments in other co-operatives 78900 5 Net book value of equipment : 20000 Mortgage 90 000 Mortgage interest outstanding 2.000 Bank 42 500 Members welfare fund 60 000 Education fund 30000 ‘Unappropriated profits 42 860 (@) List the items which are considered fixed assets of Sautec Credit Union. (2 marks) (ii) List the items which are considered current liabilities of Sautec Credit Union. (2 marks) (iii) Draft the Balance Sheet extract to show the Capital section of the Balance Sheet for Sautec Credit Union as at I January 2013. (G marks) GO ON TO THE NEXT PAGE 01239020/F 2013(b) The board of directors of Sautec Credit Union decided to raise more capital by advertising fornew and old membersto purchase shares. They have provided the following information on receipts and payments 2 January 2013 = Advertisements $31 000 = Additional office expenses $6 000 = Sold 100 000 one dollar ($1) shares — Received registration fees of $5 EACH from 2 100 new members — _Allreceipts and payments were made by cheque (Prepare the journal entries to record the sale of shares and the receipt of registration fees. (7 marks) : (ii) Prepare the Bank Account of Sautec Credit Union to record the above receipts and payments. Be sure to include the balance at bank as at | January 2013. (6 marks) ‘Total 20 marks GO ON TO THE NEXT PAGE 01239020/F 2013-10- 7. Bacolet Gray owns a small factory which makes items from coconut shells. During her first month of operation, she simply wrote down all of her transactions. Her newly-hired accountant has found the following details of transactions for the month of January 2013. — The factory was started with the following asset and liabil Bank balance of $ 31 890 which included a loan of $25 000 from the credit union ~ All purchases of raw materials for the month were made on credit from S. Francis. Three large orders were made as follows: “1 January $13 300 15 January $ 9.600 29 January $7100 On 22 January, Bacolet paid S. Francis the total amount owed at that time, by cheque. On : 31 January Bacolet issued a cheque for $5 000 to S. Francis on account and was given a discount of 3% of the $5 000. ~ All sales were made on a credit basis to V. Taylor in three large sales orders as follows: 8 January $14 300 16 January $10 090 27 January S15 800 V. Taylor retumed $1 390 worth of goods on 10 January. On 30 January, the amounts owed to Bacolet for sales on 8 January and 16 January minus the returns were paid off by cheque. Bacolet granted V. Taylor a discount of 2% on this payment. — On3/ January, Bacolet recorded the following cheque payments: 8.000 in factory wages $ 3 500 in salary to the factory manager $1 040 in electricity bills $ 2.600 in rent $13 620 for a packaging machine $1 000 on credit union loan GO ON TO THE NEXT PAGE 01239020/F 2013-u- (@) From the above transactions, identify ONE item of revenue expenditure and ONE item of capital expenditure for Bacolet Gray. (2 marks) (>) @_Open the T-accounts in the appropriate ledgers, for EACH of the following: a) S. Francis b) V. Taylor ©) Bank marks) (i) In EACH account opened, record the transactions which affect that account. Balance the accounts at the end of the month, (15 marks) Total 20 marks END OF TEST IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST. 01239020/F 2013