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CSEC POA January 2018 P2

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FORM TP 2018025
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TEST CODE
CARIBBEAN EXAMINATIONS
OI239O2O
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JANUARY 20I8
COUNCIL
CARIBBEAN SECONDARY EDUCATION CERTIFICATE@
EXAMINATION
PRINCIPLES OF ACCOUNTS
Paper 02 - General Proficiency
3 hours
READ THE FOLLOWING INSTRUCTIONS CAREFULLY.
I
This paper consists of FIVE questions. Answer ALL questions.
2
Write your answers in the spaces provided in this booklet.
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Do NOT write in the margins.
4
Show
5
You may use a silent, non-programmable calculator to answer questions.
6
You are advised to take some time to read through the paper and plan your answers.
7
If you need to rewrite any answer and there is not enough space to do so on the
original page, you must use the extra lined page(s) provided at the back of this
booklet. Remember to draw a line through your original answer,
8
rf you
ALL working clearly.
use the extra page(s) you MUsr write the question number clearly in
the box provided at the top of the extra page(s) and, where relevant, include
the question part beside the answer.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO.
Copyright @ 2017 Caribbean Examinations Council
All rights reserved.
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0123902003
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AnswerALL questions.
Write your answers in the spaces provided in this booklet.
I
The following is a list of balances extracted from the ledger accounts of Best Bake, a small pastry
shop, at its year end,
3l December
2017.
$
Inventories
Accounts payable
Buildings at book value
Loan payable 2018
Accounts receivable
Motor vehicles at book value
Bank
Prepaid expenses
Machinery at book value
Cash athand
Capital
Wages owing
Bank loan (2025)
(a)
25 000
54 500
250 000
35 000
22 000
89 000
17 000
4 000
120 000
8 000
?
2 500
275 000
Prepare a Classified Statement of Financial Position (Balance Sheet)
31 December 2017, using the order of liquidity.
for the year ended
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0t239020llANUARY 2018
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0123902004
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5
(10 marks)
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0I239020{JANUARY 2018
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0123902005
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-6(b)
In the table below, state the effect of the following transactions on the balance
sheet
equation. (Transaction (i) is done for you as an example.)
(i)
The owner deposited an additional $7 000 into the business bank account.
(ii)
The owner paid accounts payable of$500 from his personal savings.
(iii)
The owner took goods valued at $400 for his personal use.
(iv)
The owner bought stationery on credit from Paper Plus Limited costing
Liabilities
Assets
(i)
$l
200.
Capital
Increase
Increase
(ii)
(iiD
(iv)
(4 marks)
(c)
The following transactions for the business took place in May. Using the form on
page7, prepare the cash account and balance the account at the end ofthe month.
1-May
Transferred $6 000 from the business bank account into a cash account
7-May
Paid rent
9-May
Made sales of $4 800
l2-May
Received cash from an accounts receivable of$3 000
l6-May
Deposited
26-May
Brought office supplies for $800 in cash
29-May
Paid wages of $5 000 by cash
of$l
$l
200 by cash
400 cash into the business bank account
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0t239020llANUARY 2018
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01239020lJANUARY 2018
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0123902007
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-8-
Factory workers at the Sharp-Brake Ltd are paid $40 an hour, Monday to Friday, and time and a half
on weekend days. The time card below shows the number of hours worked by each employee during
a given week.
2.
U. Marsh
I. Stop
D. Park
II. Drive
Sunday
4
4
4
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Monday
8
8
8
8
Tuesday
7
7
7
6
7
8
8
7
7
6
8
8
4
4
4
Wednesday
Thursday
8
Friday
6
Saturday
Deductions include the following:
(a)
National insurance:
Contribution to pension fund
5% ofgross pay
3% ofgross pay
Income tax:
25% of pay after deducting national insurance and pension
fund contributions
(D
Complete the form below by inserting the information for the four employees.
Employee
Hours
Worked
(MondayFriday)
Total Pay
(MondayFriday)
$
Total Pay
Hours
(Saturday
Worked
(Saturday
and Sunday)
and Sunday)
$
Gross Pay
$
U. Marsh
I. Stop
D. Park
H. Drive
(5 marks)
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0123902008
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-9
(ii)
Prepare the payroll for the four employees.
Gross
Pay
Employee
$
NI
Pension
Deductions
Deduction
(5"h)
(3"/o)
$
$
Taxable
Income
$
Income
Tax
Net Pay
(21Vo)
$
$
U. Marsh
I. Stop
D. Park
H. Drive
(6 marks)
(b)
(i)
State ONE example of a statutory deduction.
(1 mark)
(ii)
Define the term bonus.
(2 marks)
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01239020/JANUARY 2018
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-10(c)
Two former factory employees, Parris and London, created a partnership. They agreed to
charge l0%o interest on drawings and capital
share any remaining profits equally.
The table below shows the incomplete current accounts for the year ended 31 December
2017 in which the partnership earned a net income of $30 000.
Details
Parris
Balance b/d
Drawing
l8 000
I
Parris
Details
London
London
12 000
800
Balance b/d
100
lnterest on capital
2 000
3 000
Required:
Draw up the Appropriation Account for the partnership of Parris and London for the year
ended 3l December 2017.
(6 marks)
Total20 marks
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0t239020llANUARY 2018
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0123902010
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Fire destroyed the records of Sweet Serve Company. You were able to ascertain the following records
3.
for the period up to the fire:
Beginning inventory
$200 000
sl25 000
$ 40 000
Gross profit margin
30%
Sales
Purchases
(a)
Prepare a trading account for the Sweet Serve Company for the period, showing clearly
inventories, cost ofgoods sold and gross profit.
Sweet Serve Company
Trading account for the period just ended
$
$
(4 marks)
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0t239020lIANUARY 20r 8
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-12(b)
The following is a summary of Sweet Serve's bank account for the year ended
3l
December
2017.
Bank Account
Bal b/d
Sales
20 000
Purchases
120 000
220 000
Insurance
45 000
Sundry expenses
60 000
Rent received
24 000
Drawings
l5 000
Bal c/d
24 000
264 000
264 000
Bal b/d
24 000
The following additional information is also available
3yt2l20t6
2 000
Rent revenue outstanding
Insurance expense owing
I
500
3t/12/2017
l
000
700
Using the T:account forma! prepare the following accounts for Sweet Serve for the year ending
December 3l 2017.
(D
Rent Revenue a/c
(5 marks)
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0I239020{JANUARY 2018
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0123902012
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(ii)
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13 -
lnsurance Expense a/c
(5 marks)
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01239020/JANUARY 2018
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-t4(c)
A company started business on I January 2015 and decided to maintain a provision for bad
debts of 4% of its year-end accounts receivable. Accounts receivable for the first three years
of operations were as follows:
$
3l December2015
3l December2016
3l December?0lT
Accounts Receivable
72 000
Accounts Receivable
84 000
Accounts Receivable
80 000
Prepare the company's Provision for Bad Debts Account for the three years,
20154017
(6 marks)
Total20 marks
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0I239020|JANUARY 2018
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Green Land Ltd specializes in the production of fruits and vegetables. The company has plans to
purchase an additional ten acres of land. The authorized share capital of the company was
4.
each
each
I 000 000 ordinary shares @ $l
500 000 5oZ preference shares @ $2
$l
$l
000 000
000 000
ln order to raise the funds on I January 2017 the company made an issue of: 200 000 ordinary shares
at $1.50 each, and $100 000 in 2olo debentures.
Allthe
(a)
shares and debentures were
fully subscribed.
Preparejournal entries to record the issue ofthe shares and debentures on
(Narratives are not required.)
I
January 2017
Journal Entries
Dr
Details
Cr
(5 marks)
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0t239020lJANUARY 2018
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-16(b)
At the end of the first half of the company's business year, the accountant provided you with
the following balances.
$
l 50 000
Retained profits
Ordinary shares @
5olo
$l
each
preference shares
300 000
s0 000
30 000
00 000
125 000
General reserve
2olo debentures
Share premium
I
Net income
140 000
The accountant informs you that debenture interest had not been included in calculating net
lncome.
The board of directors has recommended the following appropriation of profits:
(i)
(ii)
(iii)
(iv)
$20 000 to be transferred to general reserve
$50 000 to be transferred to a fixed assets replacement reserve
An ordinary dividend of $0.05 per share to be paid
Payment of the preference dividend
Prepare a statement to show the appropriation of profits for the six months ending 30 June
2017.
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0t239020tlANUARY 20r8
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0123902016
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-17-
(9 marks)
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01239020/IANUARY 2018
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-18(c)
Prepare the capital reserve section
(Balance Sheet) as at 30 June 2017.
of Green Land's Statement of Financial Position
Green Land Ltd
Balance Sheet (extract) as at 30 June 2017
(6 marks)
Total20 marks
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0I239020|JANUARY 20r
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NOTI{ING HAS BEEN OMITTED.
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0t239020llANUARY 2018
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0123902019
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The Rose Hall Golf Club has been in existence for several years. Members pay an annual
subscription which entitles them to use the facility for the year. The following is the receipt and
payment account for the year ended 3l December 2017.
J.
Rose
HallGolf Club
Receipt and Payment Account
For the year ended 3l December 2017
$
$
Balance
l5 000
b/f
3 500
Donations
Members' subscriptions
12 000
l
Sales of competition tickets
Visitors'fee
Rent and rates
3 500
Extension to clubhouse
4 000
Secretarial expenses
5 000
300
Suppliers for competition prizes
600
Stationery
3 500
Equipment purchase
6 000
500
200
Refreshments for competition
32
Repairs
5 600
Bal c/f
4
100
2*L
4oO
The following information is also available
I Jan 17
I 500
r 800
Subscriptions in advance
Subscriptions in arrears
3l
Dec 17
800
t
200
15 200
l9 600
Inventory of competition prizes
300
200
Amount owing to suppliers of competition prizes
150
50
Equipment
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(a)
Prepare a Statement of Affairs for the club as at
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January 2017.
(5 marks)
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01239020/JANUARY 2018
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Using the T-account format, prepare the Subscriptions Account for the year ended
3l December2017.
(6 marks)
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01239020/JANUARY 2018
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-23 (c)
Prepare a statement showing the profit or loss made on the competition taking account
of
the following:
(i)
(ii)
The cost of prizes totalled $400.
The secretary spent
5olo
of her time organizing the competition.
(9 marks)
Total20 marks
END OF TEST
IFYOU FINISH BEFORE TIME IS CALLED, CIIECK YOI'R WORK ON TIIIS TEST.
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