TEST CODE 001092

FORM TP 22141

MAY/JUNE 2002

C AR I B B E AN E X AM I N AT I O N C O U N C I L
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
PRINCIPLES OF ACCOUNTS
Paper 02 General Proficiency
3 hours
28 MAY 2002 (a.m.)

1.

Answer ALL the questions in Section I and TWO questions from Section II.

2.

Begin EACH answer on a separate page.

3.

Keep ALL parts of EACH answer 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 2001 Caribbean Examinations Council.
All rights reserved.

001092/F 2002

-2SECTION I
Answer all THREE questions in this section.
1.

Maurice Deleon operates an Electrical Supplies business. He has a large number of

debtors and creditors and maintains both Debtors and Creditors Control Accounts. The
following information was taken from his books in July 2001 and represented totals for
the month ending July 31 2001.
$
900
2 610
52 500
47 250
2 100
1 500
750
1 125
21 300
30 150

Returns outwards
Discount received
Cheques paid to suppliers
Purchases journal
Cheques from customers dishonoured
Returns inwards
Discounts allowed
Bad debts written off
Amounts received from customers
Credit sales to customers
July 1 2001 balances were:
Purchases Ledger debit balance
Purchases Ledger credit balance
Sales Ledger debit balance
Sales Ledger credit balance
(a)

2 775
37 500
9 150
450

Prepare Maurice Deleons Debtors Control Accounts and Creditors Control

Accounts for July 2001.

(16

marks)
(b)

Give TWO advantages of maintaining Control Accounts.

(c)

George Mota is a customer who owes $1 500. If, because of misfortune, he is

only able to pay 60% of that amount to Maurice Deleon, what effect
have on the Control Account.

would this
(2 marks)

(2 marks)

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001092/F 2002
-32.

(a)

The following balances were taken from the books of Allwood Enterprises on
March 31 2002.
Bank overdraft
Bank savings account
Provision for bad debt
Bad debt
Cash on hand
Debtors
Creditors
Long term loan
Carriage inwards
Carriage outwards
Commissions received
Commissions paid
Equipment
Motor vehicle
Salaries
Opening stock
Purchases
Sales
Miscellaneous expenses
Returns outwards
Returns inwards

$
15 000
30 000
5 000
3 500
2 500
25 000
48 000
22 000
2 800
2 900
2 200
11 200
20 000
34 000
40 000
11 500
58 000
120 000
18 000
1 500
1 200

Prepare the Trial Balance for Allwood Enterprises including appropriate heading
and the amount for Capital.
(15
marks)
(b)

Give the difference between Bad Debt and Provision for Bad Debt. (1 mark)

(c)

Identify the item to be recorded as additional revenue in the enterprises Profit

and Loss account.

(1 mark)
(d)

Identify the TWO most permanent assets of the enterprise.

(2 marks)

(e)

Which item reduces gross sales in the Trading Account?

(1 mark)

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001092/F 2002
-43.

(a)

The Accountant at Marvin Chin Enterprises prepared the Cash Book summary
for the month of November 2001:

Marvin Chin Enterprises

Cash Book Summary
_______________________________________________________________________
$
$
Balance b/f
12 663
Total payments
139 680
Total receipts
135 657
Balance c/f
8 640
148 320
148 320
Your investigations revealed the following:
(1)

A cheque for $423 was drawn on Marvin Chins account and entered in
error as a receipt in the cash book.

(2)

The bank returned a cheque for $162 with the notation return to
drawer which was NOT yet written back in the cash book.

(3)

There was an error in the amount of balance brought forward in the cash
book. The correct amount should be $13 230.

(4)

Cash sales amounting to $13 878 had NOT yet been credited by the bank

(5)

Cheques paid to the following suppliers had NOT yet been presented to
the bank:
Stacey
Varena
Lucille

marks)

$1 926
$3 330
$ 270

(6)

Bank charges of $315 shown on the Bank Statement was NOT entered in
the Cash Book.

(7)

The bank debited Marvin Chin account $648 in error.

(8)

The balance on the Bank Statement received was an overdraft of $1 116.

(i)

Make ALL the necessary adjustments in the Cash Book of Marvin Chin.
(8 marks)

(ii)

Prepare the Bank Reconciliation Statement as at November 30 2001.

(Start with the balance as per Bank Statement)
(7

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001092/F 2002
-5(b)
straight

Bold and Grusome bought a motor van for $45 000 and estimated its scrap value
at $3 000 and its useful life as 5 years. Depreciation is charged on the
line method.
(i)

What was the depreciation rate per year?

(ii)

What amount of depreciation should be charged in year 3?

(iii)

What was the net book value at the end of year 4?

(iv)

What was accumulated depreciation at the end of year 3?

(v)

Name ONE other method of depreciation.

(5 marks)

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001092/F 2002
-6SECTION II
Answer any TWO question in this section.
4.

(a)

books of the

The Goat Farmers Co-operative has a membership of 50 farmers. Each member

has 12 500 shares and the price per share is $1. The balances on the
Co-operative on the September 30 2001 were as follows:
Patronage refund to members unpaid
Dividend to members unpaid
Debtors
Provision for bad debts
Stock of materials supplies
Investments in other co-operatives
Motor vehicles net of depreciation
Schedule of equipment net of depreciation
Farm lands and buildings
Long term loan
Cash
Bank
Creditors
Accumulated reserves 30/9/2001
Amount owing: Loan interest
Rent
Telephone

$
32 500
50 000
22 000
2 000
67 500
37 500
64 375
135 000
542 500
75 000
7 500
44 000
33 750
93 500
4 750
2 000
1 875

Prepare the Balance Sheet of the Co-operative as a September 30 2001 using the
Horizontal Format.
(17
marks)
(b)

What is the working capital of the Co-operative?

(1 mark)

(c)

If Loan Interest owing represents interest for the year, what is the rate of interest
being charged on the loan?

(1 mark)
(d)
(1 mark)

Identify the source of additional revenue for the Co-operative based on the
information given.

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001092/F 2002
-75.

Betton and Harris are in partnership sharing profits and losses in proportion to their
respective capitals.
On September 30 2000 the following information was taken from their books:

Capital Account
Current Account

Betton

Harris

$50 000
350 Dr

$75 000
2 875 Cr

The net profit for the year ended September 30 2001 amounted to $75 000.
Prepare the following:
(a)

The partnerships Appropriation of Profit Account for the year ending September
30 2001.
(7 marks)

(b)

The Current Account for EACH partner complete with balances.

(c)

Make the Journal Entry to record the admission of Dalbert into the partnership.
(3 marks)

(d)

Determine the rate of interest charged on drawings.

(9 marks)

(1 mark)

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001092/F 2002
-86.

You are provided with the following information by the treasurer of Never Again Sports
Club:
Never Again Sports Club
Receipts and Payments Account
For the month of August 2001
_______________________________________________________________________
$
$
Balance b/d
175
Purchases for bar
550
Subscription received
304
Rent
115
Cash sales at bar
760
Office maintenance
150
Donations
200
Office chair
170
Concert ticket sales
520
Entertainment expense
100
____
Balance c/d
874
1 959
1 959
Never Again Sports Club
Income and Expenditure A/c
For the month ending August 31 2001
________________________________________________________________________
$
$
$
$
Rent
115
Subscriptions
304
Less arrears
15
Less arrears
70
100
234
Office maintenance
150
Add outstanding
6
Entertainment exp.
100
240
Depreciation
8
Income from bar
214
Surplus
816
Donations
200
____
Concert tickets sales
520
1 174
1 174
Opening stock of bar supplies at August 1 2001
Closing stock of bar supplies at August 31 2001
Fixed assets excluding office chair 1/8/2001
Office chair was NOT depreciated

$ 64
$ 68
$480

Prepare the following:

(a)

The Clubs Bar Trading Account

(4 marks)

(b)

A statement of the Clubs Accumulated Fund on August 1 2001

(5 marks)

(c)

The Clubs Balance Sheet as at August 31 2002

(d)

What is the MAIN difference between the Receipt and Payments Account and
the Income and Expenditure Account?
(1

(10 marks)

mark)
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001092/F 2002
-97.

(a)

Dane Brown is the accountant at Suzettes Corporation. He prepared the

following Journal Entries:
Journal Entries

(1)

DR
$
2 144

CR
$

Y Cardice a/c
To Suspense a/c
2 144
Amount omitted from Cardices a/c
________________________________________________________________________
(2)
Suspense a/c
6 064
To Discounts Received a/c
6 064
For reversal of entry in Discount Received a/c
________________________________________________________________________
(3)
Suspense a/c
108
To Carol Suzanns a/c
108
To correct amount mis-posted
________________________________________________________________________
(4)
Bank a/c
144
To Suspense Account
144
To correct amounts of overdraft overstated in bank a/c
________________________________________________________________________
(5)
Motor vehicle a/c
4 000
To Purchases a/c
4 000
To correctly record the purchase of machine
________________________________________________________________________
(6)
A Suppliers a/c
1 896
To Suspense a/c
1 896
To record discount not posted to a Suppliers a/c
________________________________________________________________________
(i)
(ii)

Prepare the Suspense Account from the journal entries.

Describe the error which was made and is corrected at (5) above.

(iii)

What was the difference in the Trial Balance of Suzettes Corporation BEFORE
the errors were corrected?
(8

marks)

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001092/F 2002
-10(b)

G Miller is a manufacturer of computer tables. For the month of August 2001 the
following information was made available:
$
Wages of factory workers
18 340
Factory power
1 400
Factory rental
2 200
Carriage on raw material
1 200
Purchase of raw material
19 200
Factory Managers salary
6 400
Stock at August 1 2001:
Raw Material
3 000
Work in progress
800
Stock at August 31 2001:
Raw Material
2 540
Work in progress
2 000
Prepare the Manufacturing Account and state the production cost per computer
table if 500 tables were completed during the month.
(12 marks)

END OF TEST

001092/F 2002