Professional Documents
Culture Documents
1 The following balances were extracted from the books of Jacey Trading at
30 September 2016.
$
Capital 1 October 2015 20 000
Drawings 8 100
4% Bank loan, payable 31 May 2020 15 000
Sales revenue 63 800
Cost of sales 26 700
Sales returns 2 000
Inventory 16 450
Cash at bank (overdrawn) 710
Cash in hand 9 400
Salaries expense 6 200
Rent and insurance expenses 8 100
Discount allowed 600
Discount received 150
Water and electricity 2 350
Commission income 1 090
Fixtures and fittings 25 000
Accumulated depreciation of fixtures and fittings 1 October 2015 4 750
Trade receivables 6 500
Trade payables 5 800
Allowance for impairment of trade receivables 100
Additional information
1 The net realisable value of inventory at 30 September 2016 was $15 700.
2 Owner’s withdrawal of cash $600 during the month of September 2016 was
wrongly debited to the salaries expense account.
4 Included in the rent and insurance expenses figure above was $750 of rent paid
for three months ended 31 October 2016.
5 Fixtures and fittings are to be depreciated at a rate of 10% per annum using the
reducing balance method.
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
3
7 Interest on the bank loan was outstanding. The loan was taken out on
1 April 2016.
8 The bank statement for the month of September 2016 was received in early
October 2016 and it showed a sum of $20 for bank charges. This amount was
not yet recorded in the books.
REQUIRED
(a) Prepare the income statement for the year ended 30 September 2016. [11]
[Total: 20]
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
4
2 The following information was extracted from the books of Ryan Trading for the year
ended 31 December 2016.
$
Net sales revenue 120 900
Total operating expenses 13 400
Inventory at 1 January 2016 9 600
Inventory at 31 December 2016 11 800
REQUIRED
(a) Calculate the following for Ryan Trading for the year ended 31 December 2016.
Correct your answers to one decimal place.
The books of Ryan Trading showed the following financial information for the year
ended 31 December 2015.
REQUIRED
(b) Compare and comment on the changes in the profitability of Ryan Trading from
31 December 2015 to 31 December 2016. [5]
(c) Suggest two ways that Ryan Trading can improve its inventory turnover rate. [2]
[Total: 14]
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
5
3 SG Bike Shop deals in bicycles. The business did not keep a proper set of
accounting records. At the end of its financial year on 31 December 2015, the
following information was available.
Transactions that took place during the year ended 31 December 2015:
$
Payments to suppliers 21 500
Returning of damaged goods to suppliers 2 850
Delivery fees charged by suppliers 910
Cash discount received from suppliers 400
Additional information
2 A piece of old fixtures and fittings which has a net book value of $600 was sold
for $150 on 31 May 2015. In addition, new fixtures and fittings costing $5 000
was bought on 1 June 2015.
REQUIRED
(a) Prepare the total trade payables account to show the amount of inventory
purchased for the year ended 31 December 2015. [4]
(b) Calculate the depreciation expense for fixtures and fittings for the year ended
31 December 2015. Ledger account is not required. [2]
On 1 January 2015, SG Bike Shop bought office equipment at a cost of $10 000. The
business depreciated office equipment using the straight-line method at 20% per
annum. On 31 December 2016, office equipment costing $3 000 was sold for cash
$1 600.
REQUIRED
(c) Explain with the use of an accounting concept why SG Bike Shop charges
depreciation for office equipment in its books. [2]
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
6
SG Bike Shop bought tools for $180 to be used for servicing customers’ bicycles and
decides to include this expenditure as general expenses of the business.
REQUIRED
(e) Name and explain the accounting concept which SG Bike Shop is applying
when the tools are treated as general expense. [2]
[Total: 14]
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
7
4 The following information was extracted from the books of Shema Pte Ltd.
2016 $
August 1 Trade receivables ledger balances 10 430
Trade payables ledger balances 8 200
Additional information:
An entry in the sales returns journal was wrongly recorded as $400 instead of $40.
REQUIRED
(a) Prepare the trade receivables control account of Shema Pte Ltd for the month
of August 2016. [7]
(d) State the sources where the following information is obtained from to prepare a
trade receivables control account.
[Total: 12]
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination
8
Receipts:
Commission income 3 600
Additional Information
1 Rent expense, $1 700 remained unpaid for the month of December 2016.
REQUIRED
(a) Prepare the following accounts for the year ended 31 December 2016.
(b) Give one reason why Jeiya Enterprise should adjust its expenses and income
for accruals and prepayments at the end of the financial year. Support your
answer with an accounting concept. [2]
[Total: 12]
End of Paper
Yishun Town Secondary School 7175/02 Principles of Accounts 2017 Preliminary Examination