[ | CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE? EXAMINATION imam FILL IN ALL THE INFORMATION REQUESTED CLEARLY IN CAPITAL LETTERS. TEST CODE ° v s}ofoa|2 SUBJECT _ PRINCIPLES OF ACCOUNTS — Paper 032 PROFICIENCY GENERAL _ REGISTRATION NUMBER, | L | SCHOOL/CENTRE NUMBER NAME OF SCHOOL/CENTRE CANDIDATE'S FULL NAME (FIRST, MIDDLE, LAST) DATE OF BIRTH | | SIGNATUREones SOs z2Oe6. test cove 01239032 | FORM TP 2022110 MAY/JUNE 2022 CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE® EXAMINATION PRINCIPLES OF ACCOUNTS, Paper 032 — General Proficiency J hour 30 minutes READ THE FOLLOWING INSTRUCTIONS CAREFULLY. 1. Answer ALL questions. 2. Write your answers in the spaces provided in this answer booklet. 3. DO NOT write in the margins or above or below questions. 4. Show ALL working clearly. 5. You may use a silent, non-programmable calculator to answer questions. 6. _ Youare 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. Ifyou use the extra page(s) you MUST 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. RA MAT TMA rote PACE UNTIN VAT ADE TATA TA NACA01239032/MJ/CSEC 2022 L NOTHING HAS BEEN OMITTED. (0 eee OSU ose GO ON TO THE NEXT PAGE _lrc -5- 4 Instructions: — This paper consists of a case study and FIVE questions. Read the case and answer ALL the questions that follow in the spaces provided in this booklet. CASE STUDY 1. Asia Murrillon worked in the field of marketing for over 20 years. During the pandemic she lost her job. Asa result, Asia decided to start her own business — Asia Farming Adventures — using $500 000, drawn from a combination of her inheritance and redundancy pay. On 1 April 2022, Asia incurred the following expenditures during the start-up phase of the business venture. Item Details Paid legal fees for the purchase of land. Repaired fence for the animals. Acquired a vehicle for the farm. Purchased petrol for the month for the vehicle. (a) From the items of expenditure above, indicate ONE capital expenditure and ONE revenue expenditure item by writing the corresponding letter in the appropriate column in the table below. ‘Type of Expenditure Revenue Capital Item (2 marks)General Journal Date 2022 Details Debit Credit Folio $ $ 1 April Cash Investment Asia invested $100 000 in the business’ bank account to start off the business. 100 000 100 000 5 April Cash Capital Asia withdrew $500 from the bank for her private use. 500 500 15 April ‘Accounts receivable: T. James Cash Paid T. James, a creditor, $1 500 by cheque. 1500 1500 28 April Purchases Bank Purchased inventory costing $5 000; paid $2 000 by cheque and the remainder was charged on account. 5000 5.000 (b) Asia has asked you to review the bookkeeper’s journal entries above and to use the journal provided on page 7 to record the correct entries, as the bookkeeper should have originally recorded them, Narratives are not required. 01239032/MI/CSEC 2022 L ng meOs 2 Ce GO ON TO THE NEXT PAGE aGeneral Journal Date Details Folio Debit Credit (4 marks)(i) _ State the conclusion that can be drawn conceming the financial position of Asia Farming Adventures based on the current ratio of 0.86:1 (1 mark) (i) Recommend ONE strategy which Asia may use to improve the net profit to sales ratio of the business. (1 mark) ‘GO ON TO THE NEXT PAGE 01239032/MJ/CSEC 2022 L aug INOTHING HAS BEEN OMITTED.No. 1346 INVOICE Asia Farming Adventures 24 Morna Street Deerfield OMARING To: C&L Limited 22 April 2022 Stonehill Boulevard OMARING Quantity Description Unit Price L Total 400 Vegetable bags $5.00 $2000 Less: 10% Trade Discount (S 200) TOTAL $1800 (2) (Translate the source document above into a transaction description. (1 mark) (ii) Identify the journal which the seller would use to record this source document. ‘GO ON TO THE NEXT PAGE 01239032/MJ/CSEC 2022 L |-ll- 4 Asia Farming Adventures provided the following information for the month of May 2022. Date Details $ 1 May | Mauci Supermarket’s books showed that the company owed Asia | 5 4oy Farming Adventures. 3 May Asia Farming Adventures sold vegetables on credit to Mauci 8500 Supermarket. 10 May | Mauci Supermarket informed Asia Farming Adventures that some of the vegetables received last week were rotten and had to be 150 thrown away. Asia Farming Adventures sent Mauci Supermarket accredit note. 29 May | Mauci Supermarket settled the outstanding balance from | May by cheque, after taking a cash discount of 3%. (b) Prepare the account of Mauci Supermarket for May 2022 as it would appear in Asia Farming Adventures’ sales ledger. Balance the account and bring down the balance on 1 June 2022. Mauci Supermarket Date Details $ Date Details (6 marks)ate Date Documents Details For fertilizer and seeds, $4 600 less 20% trade 2 June Invoice No. 234 . discount 8 June Credit note No. 507 For goods returned, $80 For payment by cheque of the amount owing, 30 June,_ | PeeeipeNe. 36% less 2 14% cash discount (a) _ Record the THREE transactions above in the books of Asia Farming Adventures. Forms have been provided below and on page 13 for your answers. BOOKS OF ASIA FARMING ADVENTURES Purchases Journal Date Details Invoice Folio $ (2 marks) Purchases Returns Journal i Credit . Date Details NoteNo. | Folio 8 (1 mark) GO ON TO THE NEXT PAGE, | 01239032/MJ/CSEC 2022 L-B- ] Cash Book Discount . Date Details Allowed | B8* | pate Details Discount | Bank $ Received |S marks) (b) ()_ Identify the name of the ledger account to which the total of the purchases journal would be posted. a mark) (ii) Identify the name of the ledger account to which the total of the returns outwards journal would be posted. mark)account. The accountant then discovered the following errors. Errors The total of the purchases account had been undercast by $90. The balance of the petty cash book, $200, had been omitted from the trial balance. The cash discounts totals from the cash book for the month of May had not been posted to the general ledger accounts. The figures were as follows: + Discount allowed $50 + Discount received $150 (a) Beginning with the difference found in the trial balance, write up the suspense account at 31 May 2022 to correct the errors discovered by the accountant. Total and rule the suspense account. A ledger account form has been provided below for your answer. Suspense Account Date Details $s Date Details $ 01239032/MJ/CSEC 2022 L (6 marks) GO ON TO TIIE NEXT PAGE gu _!-15- ~] (b) State the effect that correcting Error C would have on Asia Farming Adventures’ original net profit. (2 marks)ren Third Quarter Sales Forecast 2022 Units July 2.000 August 3.500 September 4.000 October 6.000 The selling price of each cocoa stick during the third quarter period is budgeted to be $5 per unit for the first two months. The selling price will then increase to $5.50 per unit in September 2022. (a) Use the form provided below to prepare a sales budget for the third quarter period ending September 2022. Asia Farming Adventures Sales Budget for the Third Quarter Period July August | September Units Units Units (3 marks) GO ON TO TIIE NEXT PAGE 01239032/MJ/CSEC 2022 L in =-17- 4 Asia’s policy is to maintain closing inventory levels at 10% of the following month’s forecasted sales units. The inventory on 1 July 2022 (b) _ Use the form provided below to prepare a production budget for the third quarter period ending September 2022. END OF TEST Asia Farming Adventures Production Budget for the Third Quarter Period July August | September Units Units Units (5 marks) Total 40 marks IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST.ae a ee oe sate Cannes pengey J Ue SR cre nee nenee peeunnnees Senteennrws Steen ay ce cone Seen eee Question No. 01239032/MJ/CSEC 2022 L Ig _beset 3, ce tee eet cute Gene sanaue stneneauen a tapuouese Caves ay aan Sanpeaee resrcove: | 0] 12] 3] 0} 3 SUBJECT: PRINCIPLES OF ACCOUNTS ~ Paper 032 PROFICIENCY: GENERAL REGISTRATION NUMBER: | | | | | FULL NAME: (BLOCK LETTERS) Signature: Date: Ensure that this slip is detached by the Supervisor or Invigilator and given to you when you hand in this booklet. Keep it in a safe place until you have received your results. INSTRUCTION TO SUPERVISOR/INVIGILATOR: Sign the declaration below, detach this slip and hand it to the candidate as his/her receipt for this bookle collected by you. I hereby acknowledge receipt of the candidate’s booklet for the examination stated above. Signature: Supervisor/Invigilator Date: