UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level CANDIDATE NAME Diddahenr tities! cenTRE CANDIDATE NUMBER NUMBER Accounting Paper2 Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST \Write your Centre number, candidate number and name on all he work you hand in, ‘Writ in dark biue or black pen. ‘You may use a soft pencil for any diagrams or graphs. Do not use staples, paper cps, hichlahters,alue or correction fid DO NOT WRITE IN ANY BARCODES. Answer all questions ‘You may use a calculator. Where layouts are to be completed, you may not need all the lines for your answer ‘The businesses mentioned inthis Question Paper are fictitious. Atthe end of the examination, fasten all our work securely together ‘The number of marks is given in brackets {J a the end of each question or part question. For Examiner's Use (ALIN UNiverstry CAMBRIDGE Been arose International Examinations [Tur overREQUIRED (b) Starting with the closing balance from (a) update the bank columns in the cash book. Bring down the amended balance. Mohan Cash Book (Bank columns only) idea Dele So hag af Bale bl. Hoy nf Ctadth Tansfer.. Hoy... Balance: bi. Ce (c)_ Prepare the bank reconciliation statement at 1 May 2018. Mohan Palace pe cack CO ReConetition Statement at 1 May 2018 oe Allaspieceted equa Cash... {tae Less ancurls.cctyed celled sbowlaces- sve A a Balance pe bank idem. (io) 7 (d) Place a tick () in the appropriate box to show whether each of the following is an account, a book of prime entry or both an account and a book of prime entry. The first item has been completed as an example. ledger account! book of | a ledger account and | prime entry | a book of prime entry Inventory ‘ | 1 - Purchases journal | v | | at — Cash book = Provision for depreciation | _ eee I | evavers Cee4 2 Mohan is a trader. On 24 April 2018 he had a bank overdraft of $150. fw ‘The following transactions took place during the week ended 30 April 2018. Ose ‘April 25 Withdrew $200, by cheque, for personal use. April26 Paid by cheque the balances on the accounts owed to: Kerai, $400, less 3% cash discount Susan, $750, less 4% cash discount. | April 27 Cash sales, $630, paid into the bank. April 2B. Received a cheque from Loula for the balance of her account, $2000, less 49% cash discount. | April30__ Cashed cheque to pay wages, $430. | REQUIRED (a) Prepare the bank columns of Mohan's cash book for the week ended 30 April 2018, | Show the balance brought down on 1 May 2018. Mohan ‘Cash Book (Bank columns only) op AMIDE ong Details, | eaad. Apa. 4... [Balance b/d... 190... Ape) 25. rigs pil... Kt. | YApail 2... al. a {April 3... Balance. i 2580 On 1 May 2018 Mohan received the following bank statement: Bank Statement | Dr cr Balance s $ $s April 24 Balance / 150 Dr April 25 Chequey, 200 350 Dr April 28 Cheque / 3880 738 Or ‘April 29 Cheque / 720 1.458Dr April 29 Credit Transfer (Dividend) 24 4 434 Dr | April 29 Credit J 630 804 Dr(e) Name the accounting principle which is described in the following sentence. “The same accounting ‘treatment should be applied to similar items at all mes” Consisengy principle (f)_ In which final account would bank charges appear? Freee stlemett rani so seonenelt] (a) State one reason why a supplier of gands an eredit sands a statement of account to the customer. Tanti He cuctomer about He amouat duce pitneenensnnnennnel {1] (h) Name the account which is brought up to date before a bank reconciliation statement is prepared, Cashbook. uw (State one advantage of using a book of prime entry Taahercdlesuhbed belecen te aexecrtas (@) Explain how the double entry is completed for the items recorded in the analysis columns of the petty cash book, Tayatecatded ate ledger accousts of te items antedebitside. a [2] [Total: 17)3° Tanvir does not keep a full set of double entry accounts, ‘The following information is available for the year ended 30 April 2018. Receipts from customers Sale uf nur-cuirent asset Balance old Additional information: Inventory ‘Trade receivables ‘Trade payables $ 60500 750 3 g Non-current assets (book value) Lighting and heating 66% Bank loan repayable 30 April 2023 Capital ‘Summarised Bank account Balance bid Payments to suppliers Wages Lighting and heating Drawings Purchase of non-current asset General expenses 1 May 2017 $ 5250 9750 10500 40.000 600 Prepaid 20.000 25000 ‘The non-current asset sold during the year had a book value of $1 000. REQUIRED (a) Calculate for the year ended 30 April 2018: (i) Sales Sales=37R0.+8''00:+ loca = $19 I. $ 100 34 900 15.000 2500 5.000 8 000 6.000 71 500 30 April 2018 $ 11.000 8.400 9300 42.000 250 Accrued 20000 2 we eames ‘ie(ii) Purchases: Pachases.= 8aca tle Bae +9 002827800 scm {b) Prepare the income statement for the year ended 30 April 2018. Tanvir rl 2018 ae ee Ate Se Pit for eyo. 31350 [ire $1350 rene le4 Mary is in business buying and selling goods on credit. The following information was available at 30 Apri! 2018. $ Inventory 1 May 2010 5500 Inventory 30 April 2018 7.500 Capital 30 April 2018 75000 Operating expenses for the year 23.500 Purchases for the year 72.000 Mark up 50% REQUIRED (a) Calculate for the year ended 30 April 2018: © Coduloes nat Yloma-6c0.24%ocee, Glass pratt s. Sele x%enn0= $3 000. Revenue. = 35 can + Yan 1} | (ii) Rate of inventory turnover (correct to one decimal place) Rated. inusitiny dutonnehs Tose __ = das Bh (ae 50+ Fees) 2 il) Profit for the year (net profi) a eat fot legate Son ar BSc. a 210 (iv) fein Net profit revenue (correct to one decimal place) Rcentige nel petit nena 28222 aloo =BD2¥ %. 008 (v) Percentage net profit / capital (oomrectt to one decimal place). SMe x loa n.FB: F..0 = 105.000 parreniaga net profit to revenue. For each ot the options below, place a (/) to indicate whether the option would increase | or decrease the rate of inventory turnover. 183} (b) Explain why businesses with a high rate of inventory tumover often have a low {2} (c)_ Mary is considering ways in which she might increase her rate of inventory tumover. fr (31 | Increase rate of Decrease rate of inventory turnover_| inventory turnover (i) Hold a ‘Sale’ and reduce Prices by 20%. | (ii) Increase the inventory by | $20 000. (iii) Raise selling prices by 10%. | BIun (d) Identity by ticking the appropriate box, (/) whether each payment is capital expenditure or revenue expenditure. Capital expenditure | Revenue expenditure Purchase of spares for machinery | Installation of additional machinery Repairs to office furniture Purchase of louse touts (4) Total: 23)2 Answer Question 5 on the following pages. Fu, Li and Yang are partners in a retail business. The partnership agreement states that they share profits and losses in the ratio 2:2:1 Interest on capital is allowed at the rate of 4% per annum and interest is charged on drawings at the rate of 5% per annum on the balances at 30 April 2018. The following balances were extracted from the books on 30 April 2018. Capital accounts 6 Fu 40 000 ui 35 000 Yang 25.000 ‘Current accounts Fu 2.500 Cr ui 1500 Cr Yang 1000 Dr Drawings Fu 40 000 ui 10 000 Yong 12.000 Premises 44 750 Motor vehicles (cost) 16 v0 Fixtures and fitings (cost) 30.000 Provisions for depreciation ‘Motor vehicles 3200 Fixtures and fittings 17 500 Trade payables 54700 Trade receivables 45000 Provision for doubtful debts 1500 Bank 7560 Dr Purchases 111.200 Revenue (sales) 209 500 Retums outward 4750 Inventory at 1 May 2010 30.650 Salaries and wages 42 100 Heat and light 3.890 General expenses 16 750 Discount received 5300 Marketing expenses 12.050 Rent 7.500