POA January 2009
Uploaded by
MikPOA January 2009
Uploaded by
MikCARIBBEAN EXAMINATIONS COUNCIL
SECONDARY EDUCATION CERTIFICATE
EXAMINATION
PRINCIPLES OF ACCOUNTS
Paper 03/2 - General Proficiency
1
12hours
(08 JANUARY 2009 (p.m.))
3. Silent electronic calculators may be used, but ALL necessary working should be clearly
shown.
Copyright © 2007 Caribbean Examinations Council ®.
All rights reserved.
INSTRUCTIONS: This paper consists of a case study and FOURTEEN questions. Read the
following case study and answer the questions that follow.
Mrs. Vilma Fullerton is a retired motor vehicle sales clerk of King Street, St. Mary. She operates a
vehicle service centre which provides services for the following types of vehicles: SUVs, cars, vans and
mini buses.
Service Cost ($)
Engine wash 30
Under wash 35
Body wash 15
Interior cleaning 10
Polishing 20
For each vehicle receiving an engine wash, the owner is required to purchase a gunk remover, at a cost
of $17.95, from the service station. During the month of March, the business provided the following
services in the quantities indicated:
240 engine washes
200 under washes
500 body washes
360 interior cleanings
150 polishings
1. Identify the type of business organization that is operated by Mrs. Fullerton. ( 1 mark)
2. Calculate the total revenue earned during the month. (Show all your working.) (6 marks)
3. Identify the book of 'Original Entry' into which Mrs. Fullerton would record the receipts from
services provided. ( 1 mark)
$
Hydraulic jack 45000
2 high-performance vacuum cleaners 26000 (total)
Wages (3 attendants) 1200 (each per month)
Rent 1 500 (per month)
Water rates 3250 (per month)
Electricity 210 (per month)
3 power hoses 6000 (total)
5. From the list of assets and expenses on page 2, identify ONE capital expenditure and ONE
revenue expenditure. ( 2 marks)
Mrs. Fullerton sells vehicle accessories. Inventory was valued at $27 500 at the beginning of the year
and $32 000 at the end ofthe year. During the year, she made sales of$75 000 and purchases of$57 000.
(b) Given that the industry has an average gross profit percentage of 20 %, comment on
Mrs. Fullerton's business performance. ( 2 marks)
Mrs. Fullerton's friend, Mr. Hunt, outlined to her, the importance of having adequate working capital in
the business. He noted also that the "Current Ratio and Quick Ratio" were good methods for
determining the liquidity of businesses. An extract from Mrs. Fullerton's Balance Sheet showed the
following:
Current Assets $ Current Liabilities $
Inventory 32000 Creditors 53000
Debtors 64000 Accruals 500
Prepayments l200
Bank 50000
Cash 2500
14. Using the results from Question 13 above, comment on EACH of Mrs. Fullerton's liquidity
ratios. ( 4 marks)
