eB. vest cope 01239020 FORM TP 2012106 MAYAUNE 2012 CARIBE FAN EXAMINATIONS COUNCIL ECONDARY EDUCATION C EXAMINATION ERTIBICATE PRINCIPLES OF ACCOUNTS Paper 02 ~ General Proficiency Shouts READ THE FOLLOWING INSTRUCTIONS CAREFULLY. 1. Amswer ALL the questions in Section | and TWO questions from Section I 2. Begin EACH answer on separate pag. 3. Keep ALL pars oF EACH answer together Silent, cloctrone ealeulators may be used, but ALL nessasary working shou be clay shown 5, BACH question is worth 20 marks, DO NOT TURN THIS PAGE UNTH YOU ARE TOLD TO DO SO. ‘Copyright © 2011 Caritibean Examnipatons Cowell All ights reserve o1zs9020°F 20122- SECTION L Answer the THREE questions in this section, 1. —_Amaccounting suxent prepared the following trial balance for Heavy Meta Enterprises forthe {yee ended 31 December 2011 and inserted the amount of $51 200 for capital Dr Go s s Bank overdraft 26 500 (Cash on hand 3.200 Provision for bad debs 8200 Ba dobis 5000 ‘Accounts receivable 8100 ‘Accounts payable 54200 ‘Long-term loan 75.000 Cavrgge inwards 5600 Carnage outwerds 4500 Commissions received 200 Rent paid 12000 Equipment at cost 190.000 Accumulated depreciation (equipment) 30300 Motor vchicle at cost 63.000 ‘Accumulated deprecation (ooter vehicle) 15.400 Salaries 40000 Taventory 16500 Purchases 14.600 sulee 125.000 ‘Miscellaneous expenses 36.400 Return ouwards 3.600 Retums inwards 2300 Capitol 51.200 i (a) Prepare the corrected iil balance for Heavy Metal Bniexprise showing clearly the correct mount for Capital (13 marks) (b) You are presented with the following day books: Sales Day Book 201 ‘Amount | September Plumber $7200 4 Sepiember Vettenry $4180 13 September N Henry $2100 20 September U- Plumber 5.1396 siete GO ONTO THE NEXT PAGE o1za920¥E 2012Return Inwards Day Book. ao Amount 3 September U.Phamiber $1 000 September —_V. Hemey SL 950 $2950 Cash Book es cc Die Cah | Banke aon ss | + fon sf ts 1S | Baie Zeis_[ 10500 [asseqx [Rent 700 See] Panter | 100 100 ]25 Sane [ Wags zo éSept |v itency [6 oun ose |e eas [ean qo [3a [aie 2eis [21640 (0) Poetthe information fom the day bocks inthe personal account of U.Plambersnd balance te sesount, Gmarks) Gi) Prepare the Debtors Control Account and any other acco in the General Leiger forthe month of September, (marks) ‘Total 20 marks o123¢020F 2012 GO ON TO-THE NEXT PA“The Sales Ledger of J's Paradise showed the following balances at 31 December 2010 Account Title Amount Nat Lewis 5 850 Jeb Steven 3.600 ‘Ana Tomas 5450 [MJ has ceded to write off these thes receivables as bad debs (0) @ Prepare the journal entry on page 5 of 1's journal to write off the thre reasivables (Narrative required) (Cmarks) “The remaining receivables totalled $28 320 at 31 December 2010. Mr 7 believes that 10% ofthese outstanding receivables are LIKELY to become bid debts. He wishes 10 make adequate provision for these doubtful debts i) Prepare che journal entry with a nerrtive, to eteste the Provision for Doubt Debi Account (amarks) (0131 Decernber 2011, MeJS's receivables AFTER bad debts totalled $25 00. He decided fo use the same rate of 109% as the previaus year in accounting for doubt debts, (i) Draw up the Provision for Doubtful Debts Account for the TWO years, ‘anuary 2010%03) December 2011, toshow the change inthe provision, Balance the cevount at the end of FACH yea (S marks) ()—G@)_Siate ONE reason why adjustments are made fo nancial statments. (1 mark) (ii) Kdentify ONE concent whic guides adjustments o financial statements (mark) Gi) xplain how the concep identifi in (6) (i) above guides ajustunents made to financial statements marks) ‘otal 20 marks G0 ON TO THE NEXT PAGE: ‘01239020 2012+s 3. (@}__V-Choesemanis preparing his summary accounts fr the month ensed31 August 2011. He Finds the following erors which may or my not affect the summary ofthe ban account cnies in his Cosh ook, A purchase of $303, paid hy cheque, was recorded im both aceounts a a purchase fof goods valued at $390. ‘A cheque for $467 sent to creditor R, Sanit had boon rovordod in R. Sams account ONLY. A cheque received fiom C. Samah for $20 was debited in Saronab's account and crete in the Cash Book. Prepare the journal enties to comect the erors above, (Narratives mot required) CO muaris) GV. Cheeseman reeords the Following figures in his summarized Cash Book BEFORE comtecting the relevant errors Summarized Cash Book (bank eolumns only) for the month ended 31 August 2011 8 ‘Opening balance 1300 Reveipts 8910 ioa70 Payrenis 7.900) Closing balance ‘Beginning with the incorrect balance of $2 570, comee! the summarized Cash Book forte relevent rors given above, (Show all working.) (maria) () The following intormation is vacoded in EITHER the bank statementorin V.Cheesemun's (Cash look ut NOT in oth 3 Bank cages 120 Standing onder for voici mauance 00 [requ date 30 August 2010 set fe sapaier | $70 [Cregusreumed stamped “Insuficient Funds | 390 Direct deposits rom debiors 2300 [Deposit to bank on 31 August 2011 ‘90 “Th hank satenont fe the month ended 31 August 2011 shows a balance oF $5 650, 0 i) 01239020 2012 Using the corrected summarized Cash Book balance fiom a (i) above, draw up av updated Cash Book for dhe month ended 31 August 2011 (Smarts) Staning with Be updted Cash Hook balumes, dw up a Bank Revoncifition ‘Statement for V. Cheesemac forthe month ended 31 Augusi 2011. @ marks) “Tata 20 marks GO ONTO THE NEXT PAGESECTION It [Answer any TWO questions inthis vetion. 4. Pand Gare two sole traders wh desided to trade under the partnership name of PG Pnterprisos. The following ie lists of Palenvcs or EACH trader bofoe the formation ofthe partnership r c 5 ¥ Equipment 14000. Met vel 3.000 Payables 6000 ‘Stationery 00 inventory 72 600 Premises aww, Receivable $00 [cash 7300) Cash 100000 Mongage 34000, Loose tls 1800, Hank overdra Sano (a) (Prepare individua! opening entes as at 1 May 2012 recon FACH soe trader's contribution tothe parmersip. (Tmarks) Prepare a classified summatized Balance Sheet for PG Enterprises, as at 1 May 2012, using the order of permanence (7 marks) (©) The two partners anticipate w profit oF $99 O00 at the end of the Fst years trang, bat shave not yer desised what profit-sharing rato to adopt. Calculate EACH part's shate of profit under the foilowing sohemes (—rcepita sharing ato marks) Gi) mtberatio 3:7 mans) Show all working. (©) List TWO features other han the prft sharing rato, thal should be inchided in Pend G's parnership agreement ‘@ marks) ‘Total 20 marks GOON TO THE NEXT PAGE 1230020 20125 oo © Explain, in ONE sentence, the meaning of EACH ofthe following statements: (The owners of a corporation benoit Grom inte lability, (i) Faris London, sharcholder, wants to know what the Board of Directors of Aries Limited does. Gi) The Registrar of Companies has received the documents required to stert un the new corporation Gmarks) ‘Avis Limited ha an authorin! share eapial 6200 000 one dollar ($1) Ordinary Shares ‘and 100 000 one dolla (61) 8% Preference Skares, On 1 April 2011, the following ba ‘ances were listed in is books: z 155 000 Ordinary Sparse @) $1 ACH Tas 000 3000-8 Preference Shares @S1 EACH | 83,000 10% Dobentures ‘1 00 (On 1 April 2011, Aries Limited ‘asues tho remaining Ordinary and Preference shares for cash and buys back $21 000 in debentures with the cash received Draft General Jounal cuties to record © the issue ofthe remaining ordinay shares at $1.50 EACH, Smaris) 0) the issue of the remaining preference shares ot $1.00 EACH. @ mars) Gi the reduction in debentures. maria) Narr ‘other balaness found on the books ined 3 Prot and Lone Account bane nerevion Gebermnes [90 000 Retained cmings [401001 (General rosea 31 S00 (On 31 May 2011, the directors agreed to the following: = Pay the interest due on he remaining debentures © Transfer $51 500 20 general reserve = Provide forthe dividend to al holders of Preference Shares = Provide fora dividend of 12% to all holders of Ordinary Shares Prepare the Appropriation Account for Aries limited for the year ended 31. May 2011 ‘Show all working. mari) Total 20 marks GO ON TO THE NEXT PAGE 23a020iF 201216 Simon Long makes decorative concrete omaments. He recorded the following information about his manafsewuring operations forthe year ended 31 Deoomber 2011. » 6 ini th si ae, P eenueains genes i ae ss eae ie ci ie en soe Se eeee on, ae eee o Semone denne a = FS se ot Bester se a i Goatthccra eupomdiing 38 ‘Note: 90% of transportation ests relates to dreet smaterials and 10% to Indirect materials. (a) Calculate the following cost for Simon Long: Diet materials consumed amare) Gi) Indivoct materials used @anarks) (©) Prepare the Marufactaring Account for Simon Long fr the year ended 31 December 201), ‘Show clearly the | ‘cost of direct materials consumed = prime costs 5 Betory averbeads cost of production. tt marks) (© Cateuate the cost of yond wt @ mars) "Total 20 marks GOON TO THE NEXT PAGE 0123902018 2012oo — —= — 9 7. Liontown Co-operative was Formed to produce souvenits forthe Booming tourist market. The co-aporative started with share pel of $35 000 is shares, The co-operative is now bio years ld and records the following information forthe firs two yeats of operation, 31 December 2010 [31 December 071 s S Gone ales e000 i000 Sales 70,000 290000, apenas 21 000, "460001 editors 2300 4600 Couns vo members Ta 300 Tne de fom meme 2 100 Lowa irom Cooperative Union Bask Tou goo. Equipment - 0.000 Portable ale “4500 vento Sto 300, Bank B50 Ta o0 “The co-operative pad out dividends of 10¢ por share i is Ost year of operation and transferred the remainder to a Members’ Education Fund. (2) Prepare te Income Stalement and the Appropriation Account for Liontown Co-operative for the first year ended 31 December 2010, (Gmarks) () During the second year of operation, Liontown Covopcrative began lending money 10 rmeqsers who wshéx to sae dei on sl business (emis thotypoofea-operative unde which Liontown wasclasifiedin the operationofits 4a) fist year >) sceand yer. (i) Name ONE commstee that Liontown is LIKELY to use to camry out its business, Gi) State ONE purpose oF the Members” Education Fund, (4 marks) (©) Forthe year ended $1 December 2011, the Hoard of Dirstors records a surplus of $157 500. The board plans to ‘tanafer $32 600 tothe Members’ Education Pand © payout $27 500 in dividends Teave the remainder es undistributed profits. Prepare a clasified Balance Sheet for Liomtown Co-opertive for the year ended 31 December 2011 (second year of operation) taking the appropeiaion ofthe sarpk inta ‘consideration, (1omarks) ‘Total 20 marks BND OF TEST IF YOU FINISH BEPORH TINE IS CALLED, CHECK YOUR WORK ON THIS TEST. ‘12340208 2012