. rest cove 01239020 FORM TP 2007120 /MAYIJUNE 2007 CARIBBEAN EXAMINATIONS COUNCIL SECONDARY EDUCATION CERTIFICATE EXAMINATION PRINCIPLES OF ACCOUNTS a Paper 02 General Proficiency 3 hours 22 MAY 2007 (a.m) 6-3 . y -4 1. Answer ALL the questions in Section Land TWO questions from Section TI. 2. Begin EACH answer on a separate page. 3. Keep ALL parts of EACH unswer together. 4. Silent electronic 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 © 2006 Caribbean Examinations Council ®, All rights reserved. (012390207F 2007SECTIONI Answer ALL questions inthis section. 1. (@)_List THREE distinguishing features of a partnership concer. (marks) ©) Skerriteand Cymbal aren Partnership sharing profits and losses inthe ratiocof their capital balances. The following balances were left over in their books afte the preparation ofthe ‘Trading and Profit and Loss Account on September 30, 2006, s Capital Accounts: ‘Skerrit 30000 Cymbal ‘40.000 Current Accounts Skerritt (G00) Cymbal 1300 Drawings Skerritt 1200 . ‘Cymbal 5.000 ‘Motor Vehicles at cost 43.000 Buildings at cost 232.000 Debvors 23 300 Creditors 17 000 Stack at September 30, 2006 18.000 Cash at bank 27000 Additonal information to be taken into consideration (1) The net profit forthe year ended September 30, 2006 is $250 000. (@) Each partner ess an annual salary of $60 000. (@) Interest on capital i to be paid atthe rate of % per annum. (4) Interest on ravings isto be charged atthe rate of 10% per annum. Skeritt drew ‘cash on October 31, 2005 and Cymbal drew cash on March 31,2006, (5) Accumulated depreciation on Motor Vehicles to September 30, 2006 i $8 600. Required: (Prepare the Profit and Loss Appropriation Account of Skerit and Cymbal fr the year ended September 30, 2006. (6marks) (ii) Prepare the Current Accounts of Skerstt and Cymbal on September 30, 2006. (Smarks) Gi) Prepare the Balance Sheet of Skervtt and Cymbal as at September 30, 2006, showing the working capital. (Do not show details ofthe current accountsin the Balance Sheet. Transfer only the closing balances from the partners’ current accounts.) (marks) GO ON TO THE NEXT PAGE (012390207F 20073 2 (@) Write up Mahabeer’s THREE column cash book fom the transactions below, and balance the cash book appropriately. April 1 Balances brought forward, cash $350; bank overdraft $5 000. 2. Singh who had an account balance of $8 000 paid in fll by cheque, after % deducting $% cash discount 3. Paid rent by cheque $700. 7 Paid Townsend $970 by cheque, having deducted 3% cash discount. 10 Received a cheque of $3 000 from a fiend as a loan. 15 Paid wages in cash $300 16 Transferred $1700 from bank to cash 25 Cash sales $450, 5 27 Cash withdrawn foc personal use $150. 28 Paidin full, McBean’s outstanding balance of $709, ess 5% cash discount, (10 marks) (6) In June Mahabeer received his bank statement which showed that he had an overdrawn, balance of $7 225 on his bank account. His cash book showed an overdrawn balance of 2.000. Tn checking his cash book with this bank statement balance, Mahabeer made the following observations {UAt) —_Endofthé month hank charge of $6enteredon the bank statement is otintoded inthe cu book AD) _Acheque made payable to McBean for $798 hasbeen entered corey inthe bank Statement but was entered inthe cash book a $789. DY —_Achequerecsived andenteredin the cash book from Singh for $5 700 was returned bythe bank stating "words and figures donot agree”. No correction ha et Deen radon the cash bok LAS Depositsof$13 000 mad tothe bank accounton March 8 and recordedinthe cash book, do not apear on the bank statement. (8) Cheques #22156 for $3500 and #22158 for $2000 have noteen presented the tank for payment (6) DWVidendsof $8 000psidirety to Mahsheers bank acount isshownon hebank Statetnent but has not been recorded in the ash Rook Required: Stating with he overdrawncash book balance of $2000, rit upthe bank account to ring it uptodate (marks) Gi) Prepare Mahabeer’s Bank Reconciliation Statement as on 30th June, 2006. (marks) GO ON TO THE NEXT PAGE (012390200 20073. (@) State (the most appropriate source document and (i) the book of orginal entry which Pinto should use foreach ofthe tansactonsbelow. (Write your response in your answer booklet ‘Transaction Source Document | Book of Original Entry = 8) Pinto returned some goods previously purchased. They ‘were the wrong order by) Sent acheque 10S. Morgan for goods purchased (©) Sold an old computer (a0 longer suited fr the : business) on ereit 10 Longsdsle Primary School, 8) Acaustomer returned damaged ‘goods previously bought from Pinto. (4 marks) (©) On January 1, 2006 the $ & $ Company had $7 00 balance ints Provision for Bad Debts sccount. The company’s policy is to provide 5% of debtors as bad debis provision. The ‘company’s year ended December 31. ‘The debtors forthe following 3 years were as follows: ‘December 31, 2004 180 000 ‘December 31,2005 $135 000 December 31,2006 5145 000 Required: Prepare the Provision for Bad Debts Account and the Balance Shoot extracts forthe three years. (16 marks) GO ON TO THE NEXT PAGE 012390201F 2007SECTION I Answer any TWO questions in this section. 4G) The Sharks Bay Fishermen's Cooperative Society has a share capital of $150 000. The Income and Expenditure Account forthe year ending March 31,2006 shows a surplus of $836 200. Undistributed surplus brought forward from the previous year is $6 000, The ‘management committee decided thatthe surplus shouldbe shred inthe following manner (189% is to be transfered to a statutry reserve account. (3) 15% is © be placed in a scholarship fund for fishermen’ children. Gi) Dividends should be paid to members atthe rate of ten cents tothe dollar Gv) Adonation of $10 000s to be made to members who suffered hurricane damages. + Prepare the Appropriation Account of the Sharks Bay Fishermen's Cooperative Society (Tmarks) (©) The following list of balances was taken from the books of the Teachers’ Cooperative Credit Union on April 30, 2006. Use the information to prepare the Balance Sheet of the credit union. Sultable headings and grouping ofthe items must be observed. The ‘working capital must be shown. s Long Term Liability: Loan fromD & B Investment Co. 250.000, Bank balance 354 000 Cash in hand 40.000 ‘Accounts Payable (Creditors) 175.000 Share Capital 20540000 ‘Long term Investments 700 000 Statutory Reserve 55.000 Loans to members 1500 000, Surplus 33.000 Members deposits 27000 (13 marks) GO ON TO THE NEXT PAGE (01239020/F 20075. Thefollowing Teal Balance was extracted from the books of K. Boorasingh on December 30,2006: K. Boorasingh ‘Trial Balance on December 30, 2006 DR cR ee 8 s Capital 20600 Drawings 4550 ‘Stock GJanvary 1, 2006) 2130 Debiors _ 4380 Creditors im General expenses 9.602 Sales 66190 Purchases 33.205 Motor Vehicle at cost 15000 Provision for depreciation on motor vehicles 5500 Bank 31620 - 100507 “The Trial Balance docs not balance. On investigation, the following errors wore discovered. (1) Acredit sale to Briggs for $68 had been omitted completely from the books. (2) purchase of 5160 feom Simmonds was entered in Simmonds’ account but omitted fom, purchases account. ee @) Acted sale to Lee-Chin for $129 was entered in the books as $120. (4) Drawings of $100 were recorded as S000. (5) Areceipt from McBeth for$1 500 being bad debts recovered was entered inthe cash book but not eredited to any account. (©) Aninvoice of $145 from S. Harrcharan was credited in eror to oth S. Haricharan and 8. Hamilton, Required: (@) Record the journal entries necessary to correct each ofthe errors. Narrations are not required. (marks) (©) Open the suspense account and enter the difference on the tril lance. Post the relevant centres and close the account. (Gimarks) (©) Redraft the corrected trial balance. (marks) GO ON TO THE NEXT PAGE (012390201 2007 ye6, Sally Walkeris a sole trader who operates a variety store. Trading started on March 1, 2006. The Tollowing tansuetions ina certain product occurred during the month. March 1 Purchased 20units, = @ = $4 each 3 Purchased = 30units, « @ = SS cach 3 Sold Dsus = @ = ST each 6 Purchased GO units, «— @ «$5.50 each 7 Sold Munits @ = $8 exch 8 Sold B0units = @ = $8.20 each Required: @ © © © ‘Complete the stock form provided using the FIFO method of stock valuation to determine the number of units and cost per unit of stock remaining on March 8. (1Smarks) Calculate the vale of the remaining units (stock) using the FIFO Method. (1 mark) Assume that the units sold on March 7 were those bought on March 6: {© Calculate the gross profit made on the units sold on March 7. (Show workings.) Gi) What method of stock valuations being assumed? (3marks) Name ONE other method of stock valuation, (Cimark) GO ON TO THE NEXT PAGE (0123902008 2007‘The Bridgeway Theatre Club is an amateur dramatie club that rents premises in which it has established a theatre and bar forthe use of members. The club's treasurer has produced the following summary ofthe club's receipts and payments during the year ended 31 May 2006: Bridgeway Theatre Club Receipts and Payments Account For year ended May 31, 2006 s Cash and Bank balance WE 2.240 ‘Members subscriptions 3920 Donations 1000 Bar takings ‘51 800 ‘Ticket sales 34.640 Grants and subsidies 27.600 126200 ‘The following information is lso availabe: Subscriptions in arrears Subscriptions in advance Owing to bar suppliers Bar Stock Production expenses owing Valuation of theatre equipment Required (a) Prepare the Subscriptions Account fr the year ended May 31, 2006. (©) Prepare the Bar Suppliers Account to determine purchases. s Secretarial Expenses 1100 Rent of Premises 3.980 Production Expenses 37600 Bar suppliers 29.400 Bar expenses 8360 Fees of guest artistes 1800 Stationery and printing 2200 Purchase of Motor Vehicle 30200 Other expenses 9.640 ‘Cash and bank balance 1920 126200 June 1, 2008 ‘May 31,2006 s 8 700 9204 320 / 120 2600 3 300 5340 4660 4980 3.080 70000 62000 (marks) (marks) (©) Prepare the Bar Trading Account for the year ended May 31,2006, showing clearly profit or Toss made by the bar. (Smarks) (€) Prepare the Theatre Productions Account showing the surplus or deficit made on produc- tions forthe year ended May 31, 2006. END OF TEST (@marks) (012390200 2007