TWGHs CHEN ZAO MEN COLLEGE First-term Examination ( )

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1 TWGHs CHEN ZAO MEN COLLEGE First-term Examination ( ) Level: S4 Subject: Principles of Accounts No of pages: 4 Date: 7 January 2008 (Monday) Time allowed: 2 hours (8:20-10:20 am) Exam No: Answer ALL questions. Show your workings. Marks are awarded for clarity of expression and neatness of presentation. QUESTION 1 (A) State how the following transactions affect the assets, liabilities, capital, revenues and expenses. has been done for you. The first one Transactions Effect 1. Paid rent by cheque. Expenses of rent increased Asset of bank decreased 2. Giving a cheque of $80 to a trade creditor for settlement of a d debt of $ Drew cheque for office cash. 4. Purchase of stock out of the proprietor s private money. 5. Repayment of loan by offering a used machine. 6. Receiving a cheque of $230 from a trade debtor for settling a debt of $250. (6 marks) (B) Classify the following into appropriate categories. Transactions Capital Fixed 1. Amount introduced by the proprietor to set up the business. 2. Construction of an extension to the office premise. 3. Amount owed by Mary for trading of stock.. 4. Receiving a loan from the bank. Repayment is to be made in nine months time. 5. Bank overdraft. 6. Inventories for resale purpose. 7. A mortgage loan from the bank. Repayment is made by 60 monthly instalments. 8. Installation of a production machine in the plant. 9. Amount owed to Paul for purchase of stock on credit. Long-term (4 marks) TWGHs CHEN ZAO MEN COLLEGE S4 Principles of Accounts First-term Examination ( ) S4 P/A First-term Exam (07-08) P.1

2 QUESTION 1 SUGGESTED ANSWERS (C) State how the following transactions affect the assets, liabilities, capital, revenues and expenses. has been done for you. The first one Transactions Effect 1. Paid rent by cheque. Expenses of rent increased Asset of bank decreased 2. Giving a cheque of $80 to a trade creditor for settlement of a d debt of $100. Asset of bank decreased of creditor decreased Revenue of discounts received increased 3. Drew cheque for office cash. Asset of bank decreased Asset of cash increased 4. Purchase of stock out of the proprietor s private money. Asset of stock increased Capital increased 5. Repayment of loan by offering a used machine. Asset of machinery decreased of loan decreased 6. Receiving a cheque of $230 from a trade debtor for settling a debt of $250. Asset of bank increased Asset of debtor decreased Expense of discounts allowed increased (D) Classify the following into appropriate categories. Transactions Capital Fixed 1. Amount introduced by the proprietor to set up the business. Long-term (6 marks) 2. Construction of an extension to the office premise. 3. Amount owed by Mary for trading of stock. 4. Receiving a loan from the bank. Repayment is to be made in nine months time. 5. Bank overdraft. 6. Inventories for resale purpose. 7. A mortgage loan from the bank. Repayment is made by 60 monthly instalments. 8. Installation of a production machine in the plant. 9. Amount owed to Paul for purchase of stock on credit. (4 marks) S4 P/A First-term Exam (07-08) P.2

3 QUESTION 2 The list of balances of Hong Co as at 31 December 2007 was as follows: Required: $ Office Equipment 24,000 Premises 106,000 Motor Vehicles 7,950 Debtors 12,840 Creditors 11,500 Stock 1 January ,500 Stock 31 December Sales 91,800 Purchases 6,300 Returns Inwards 550 Returns Outwards 140 Carriage Inwards 130 Carriage Outwards 400 Wages and Salaries 1,940 Rent and Rates 800 Cash in Hand 720 Bank Overdraft 360 Discounts Allowed 450 Discounts Received 300 Drawings 700 Loan from Ting 6,800 Sundry Expenses 1,240 Rent Received 1,480 Insurance 820 Postage and Stationery 120 Lighting and Heating 710 Bad Debts 150 Capital? (a) Prepare a trial balance as at 31 December 2007 and find out the amount of capital. (7 marks) (b) Prepare the trading, profit and loss accounts for Hong Co for the year ended 31December (10.5 marks) (c) Prepare the balance sheet as at 31 December (7.5 marks) S4 P/A First-term Exam (07-08) P.3

4 QUESTION 3 Keroro, a sole trader, had the following transactions for the month of January Year 8: Year 8 Jan 1 Started business with $5000 cash, $2000 stock and $7000 in the bank. 2 Withdrew $1500 from the bank and paid to the petty cashier for cash payments under $ Bought goods on credit from Tweety for $5000. A 10% trade discount was received. Tweety promised a 2% cash discount if payment was to be made within ten days. 4 Sold goods on credit to Snoopy for $5000. A cash discount of 2½% was allowed if payment was to be made within fifteen days. 6 Bought some machines from Office Machines for $2000 cash. 8 Paid rent by cheque for $1500 and travelling expenses for $80. 9 Paid cheque to Tweety for the amount due. 10 Paid the following expenses: Newspapers $95 Petrol $80 Pens $90 12 Received cash from Snoopy for the amount owing. 14 Bought a motor van for $ from Better Motors on credit. 15 Cash sales for $2500 paid direct into the bank. 17 Paid the following expenses: Foolscap paper $75 Magazines $80 Taxi fares $60 20 Bought goods for cash from Kitty for $6000, a 10% trade discount was allowed. 24 Paid the following expenses: Staplers and clips $75 MTR fares $45 Cleaning expenses $95 26 The proprietor drew $750 cash from the bank for his own use. 28 Paid the following expenses: Taxi fares $70 Pens and rulers $95 Newspapers $80 29 Banked all the cash in hand except for $ Drew cheque to restore the imprest, which was to be increased to $2000. You are required to draw up, for Keroro, (a) a three-column cash book, and (b) a petty cash book with analysis columns for Motor Expenses, Stationery and Sundry Expenses. (10 marks) (10 marks) S4 P/A First-term Exam (07-08) P.4

5 QUESTION 4 Tamama, a sole trader, had the following balances on 1 December Year 7: Purchases Ledger Bosco A/C Year 7 $ Dec 1 Balance b/d 2000 Sales Ledger Roy A/C Year 7 $ Dec 1 Balance b/d 3500 He had the following transactions during December Year 7: Year 7 Dec 1 Purchased the following on credit from Bosco: 120 umbrellas at $50 each 80 raincoats at $120 each A 20% trade discount was offered. 2 Sold the following on credit to Roy: 200 pairs of rain boots at $150 each 180 raincoats at $200 each A 15% trade discount was given. 6 Bought machinery from Betterview Company for $ on credit. 10 Sold the following to Toby, receiving a cheque: 80 umbrellas at $60 each 40 raincoats at $80 each 100 pairs of rain boots at $120 each No trade discount was given. 12 Received a credit note from Bosco for the return of 20 umbrellas and 10 raincoats. 16 Bought the following on credit from Moses: 20 umbrellas at $40 each 50 pairs of rain boots at $80 each 25% trade discount was allowed. 18 Sent a cheque to Bosco for settling three-fourth of the amount due to him. 20 Sent a credit note to Roy for the return of 8 pairs of rain boots and 5 raincoats. 23 Sold the following on credit to Ron: 220 raincoats at $250 each 100 umbrellas at $80 each A 10% trade discount and a further 2% cash discount for payment within ten days were given. 28 Sold some used furniture on credit to Kitty for $ Purchased the following from Miki, paying by cheque: 110 umbrellas at $55 each 90 raincoats at $65 each Subject to 15% trade discount. 31 Received a cheque from Roy for settling two-fifth of the amount due. You are required to: (a) enter the above transactions in the following day books: (i) Purchases Day Book (ii) Sales Day Book (iii) Returns Outwards Book (iv) Returns Inwards Book, (22 marks) (b) draw up Bosco A/C in the Purchases Ledger and balance off the account at the end of December Year 7, (3 marks) (c) draw up Roy A/C in the Sales Ledger and balance off the account at the end of December Year 7, and (3 marks) (d) post the totals of the day books to appropriate nominal accounts in the general ledger at the end of December Year 7. (2 marks) S4 P/A First-term Exam (07-08) P.5

6 QUESTION 5 Thomas, a sole trader, had the following transactions during September Sept 3 Bought an office equipment on credit from James for $2,300 6 Lady s business was taken over by Gordon. The debt owed to her $1,500 was then transferred to Gordon. 8 Thomas took $700 worth of goods out of the business stock without paying for them. 10 Sold a used motor van on credit to Percy for $4, Edward was unable to pay his account of $3,800 in cash, but he offered a piece of furniture in full settlement of the debt. 15 The proprietor brought in the business his own computer for $8,100 as additional capital. 20 The equipment bought for $1,300 on credit from James was found to be unsuitable and James allowed us to return it for full allowance. 24 Goods valued at $200 taken by the proprietor on 8 September were returned back into stock. He did not take any money for the return of the goods. 28 Some time ago, Thomas paid an electricity bill thinking that it was all in respect of the business. He now discovered that $900 of the amount paid was in fact electricity for the proprietor s private house. 30 One of the debtors, Henry, was declared bankrupt and therefore his debt of $550 was written off as bad debts. Required: Show the journal entries of the above transactions. (Ledger accounts are NOT required.) (15 marks) END OF PAPER TRY YOUR BEST GOOD LUCK S4 P/A First-term Exam (07-08) P.6

ACCOUNTING. From the following information provided by the proprietor of the business, Jeremy, you are required to prepare:

ACCOUNTING. From the following information provided by the proprietor of the business, Jeremy, you are required to prepare: Question 1 From the following information provided by the proprietor of the business, Jeremy, you are required to prepare: a. Trading and Profit and Loss Account for the year ended 31 December 20x1 (13