T & resr cope 01239020 ~ ] FORM TP 2023029 JANUARY 2023 CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN SECONDARY EDUCATION CERTIFICATE? EXAMINATION PRINCIPLES OF ACCOUNTS. Paper 02 — General Proficiency 3 hours READ THE FOLLOWING INSTRUCTIONS CAREFULLY. “This examination consists of FIVE questions. ‘Answer ALL questions, Write your answers in the spaces provided in this answer booklet. Do NOT write in the margins Show A\ working clearly. ‘You may use a silent, non-programmable calculator to answer questions. ‘You are advised to take some time to read through the paper and plan your answers. 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. Ifyou use the extra page(s), you MUST writ the box provided at the top of the extra page(s) and, where relevant, include ‘the question part beside the answer. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO. (Copyright © 2022 Caribbean Examinations Couneil ‘All rights reserved. mm am 01239020,1/CSEC 2023 ir “ al ‘Write your answers in the spaces provided in this booklet. 1, impo is a sole trader who owns Dimpo's Meat Shop. He provided the following information for the financial year ending 31 December 2022. 1 | The original cost of $140 000 for the delivery van is depreciated at 20% per ‘annum using the reducing (diminishing) balance method. H1__| ‘The insurance expense for the financial year amounted to $15 700, U__ | Rent receivable owing by a tenant amounted to $1 200. the accounting reeords for an additional investment ness on 29 December 2022. WW _ | Noentry has been made (0525 000, introduced into the b V_| Dimpo withdrew $5 000 to pay for an airline ticket for his son. ‘VI__| The draft net loss forthe financial year afterall adjustments were made was 314000, (@) —_G@_ Complete the accounts on pages 4-6, to reflect Dimpo's ledger at 31 December 2022. Close the accounts by balancing or making a transfer to an appropriate account. Bt mn for Depreciation — Delivery Van Date 3 Date Details s 2022 1Jan_| Balance bid 28000 GO ON TO THE NEXT PAGE, (01239020:1/CSEC 2023,(01239020/0/CSEC 2023 Insurance Account Date Details 3 Date Details s 2022 31 Dec _| Bank 15.000 Rent Receivable Date Details s Date Details s 2022 iJan__| Bank 13.200 Drawings Date Details 3 Dawe Details 3 GO ON TO THE NEXT PAGE ai * 1 Dimpo's Capital Account Date Details s Date Details 3 | 2022 | 1Jan___| Balance Wd 35800 (12 marks) Dimpo divides his ledger into three sections — general ledger, sles ledger and purchases ledger. Gi) State TWO advantages of dividing the ledger into these three see! *"@ marks) (ii) Name the ledger in which Dimpo’s capital account would appear. mark) GO ON TO THE NEXT PAGE a fal (012390204/CSEC 2023fi i (b) State why Dimpo is applying the following eccounting principles by maintaining a provision for depreciation of non-current assets @ Prudence a mark) (i) Accruals (matching) GO ON TO THE NEXT PAGE za (01239020/1/CSEC 2023 L4 © @)__ The following document is a credit note that was issued by Dimpo’s Meat Shop. Examine the entire document carefully and then fil in the boxes with the missing figures to complete the eredit note CREDIT NOTE | Dimpo's Meat Shop ‘32 Notre Street ‘Morco Seaside Restaurant and Bar Terese Street Morco Date: 30 December 2022 ‘Quantity Deseription Unit price | Amount ~2__ | Mixed chicken pars $120 3240 Less: % ado discount ] Toral S216 @ marks) Gi) Suggest ONE reason for the issue ofthe ert note (mark) ‘Total 20 marks GO ON TO THE NEXT PAGE, (01239020/s/CSEC 2023 L (mF colr “ al 2 Bilerslie is the owner of The Wedding Cake Maker. She uses absorption costing to price her products. Ellerslic has provided the following information on costs. (@) (i) Place a cheek mark (¥) in the relevant column of the table, to indicate whether the cost items are direet or indirect production costs Cost Items/Overheads Direct | Indirect Salary of the cake decorator Rent forthe factory Machine depreciation Cost of the raw materials used to make the ‘customized enkes | (4 marks) Gi) The following details are available about indireet costs for the decorations department. Decorations Department Indirect Overheads 8 Allocated costs 17000 Apportioned costs 3.000 Calculate the total indirect costs for the decorations department. Show all working, Decorations Department — Total Indirect Costs/Overheads @ marks) GO ON TO THE NEXT PAGE. a 01239020//CSBC 2023r ™ a (©) The following details are available about the production hours spent for Inbour and ‘machinery in the decorations department cost centre. Decorations Department Details for December 2023, Tots! Hours “Machine hours (MH) 400 Direct labour hours (DLH) 100 (@ State which is the dominant factor in the decorations department, based on the tabulated information above. “mark Using the information from (a) (i) on page 10 and (b) (i), caleulate an absorption rate for applying overhead costs in the decorations department. Showall working clearly. G marks) GO ON TO THE NEXT PAGE aa 01239020//CSEC 2023,a “ al L 4 B In December 2022, Ellerslie received an order for a customized wedding eake and incurred the following costs in its production, Direct Materials Costs $450 Direct Labour Costs $1250 Machine Hours Spent 20 hours, ©) @_Use the absorption rate calculated in (b) (ii) om page 11 to work out the indirect ‘overheadsleosts for this order. @ marks) Gi) In the space provided below, caleulate the total production cost for this order. Overali Total Production Cost | Total Cost for Special Order s | Direct materials total cost Direct labour total cost Indirect overheads total cost cost (marks) GO ON TO THE NEXT PAGE. a (01239020/7/¢SEC 2023r -» 7 ‘The Wedding Cake Maker has a mark-up poliey of 50%, (@) Calculate the selling price for this special wedding cake order. Show all working elearly. Gmarks) (©) Essa, the head cake maker, is given the job of making the customized wedding cake. Ttis the company’s policy to pay its workers using the ‘piece rate" system, List ONE advantage of the piece rate system as @ method of payment, GO ONTO THE NEXT PAGE I (9123902011/CSEC 2023 Lfe “ 7 3. Jumani owns an upholstery store. The accounts clerk prepared the following trial balance for the yeat ended 31 December 2022. Jumani Upholstery Store ‘Trial Balance For the Year Ended 31 December 2022 Debit Credit 8 s Revenus 379 900 Purchases 178420 Ha Cash 20000 Taventory 32000 ‘Accounts receivable 26 000 ‘Accounts payable : 25.800 Non-current assets 207 400 Capital [ 152.000 ‘Wages expenses 3200 | ilies expenses 10.680 TOTAL _$57:200. GO ON TO THE NEXT PAGE fa (012390201CSEC 2023,r o15- | ‘A review by the intemal auditor revealed the following errors, Error ‘A cash sale of $590 was recorded correctly in the revenue account but recorded as $509 on the comrect side of the cashbook. The total ofthe accounts payable account was overstated by $469. @ LL | Payment of $150 for utilities expenses was credited to the eash account but debited twice to the utilities expenses account, 1V___| Accheque of $250 received from a eredit customer was debited inthe cashbook and no other entry was made, 'V | ‘The totals of the purchases returns account, $410, and sales returns account $260, were omitted from the trial balance. Vi_| Discount received of $1 300 was added to the capital amount. @ Prepare a corrected trial balance as at 31 December 2022. ‘Jumani Upholstery Store Corrected Trial Balance As at 31 December 2022 Debit Credit s s (40 marks) GO ON TO THE NEXT PAGE (0123902011/C8EC 2023 L z= |-16- 7 Gi) State ONE reason for preparing a tral balanee. mark) (©) State THREE types of errors that would not be detested by preparing the trial balance and five an example of EACH. An example has been provided for you. Error: Error of omission Example of error: No enties were made at ll forthe transaction. Iti a ifthe transaction never occurred. Eqor | Example of enor Bor? Example of error Bnor3 Example of enor. (marks) GO ON TOTHE NEXT PAGE 01239020,N1CSEC 2023 Lie a a (©) _Jumani Upholstery Store's financial year ends on 31 December. The following account appears in the Iedger. Provision for Doubtful Debts Account Date Details s Date Details s 2022 | Income 200] 2022 31 Dec _| staternent Lan _| Balance bid 1300 31 Dec | Balance eld | 1300 2023 Lan | Balance b/d 1.100 State the meaning of EACH of the following entries inthe provision for doubtful debts account. @ 1 January 2022 balance bid “(mark (ii) 31. December 2022 income statement mari) Git) 31 December 2022 balance e/t mark) ‘Total 20 marks GO ON 10 THE NEXT PAGE | (01239020//CSEC 2023, Li a 4. Timmy and Gerty are in partnership sharing profits and losses in accordance with their partnership agreement which states the following, 1 Interest on capital is allowed at 6% per annum, 1__| Gemy is to be paid a salary of $75 000 per annum. In | Interest to be charged on each pariner's total drawings for the year at 3% per annum. IV | Timmy and Gerty share the balance of profits and losses in the ratio 3: respectively. 7 Balances on the partners’ current accounts at 1 January 2022 Timmy (eredit) $14.000 Geity (debit) $ 5.000 Balances on the partners’ capital account at 1 January 2022 ‘Timmy $90 000 Gonty 360 000 Partners’ drawings for the year ended 31 December 2022 Timmy $2,500 Geny 35.600 [Net income for the year ended 31 December 2022 was $156 757. GO ON TO THE NEXT PAGE mA I CSEC 2023r 7 (@ —@_ Prepare the appropriation account for the partnership for the year ending 31 December 2022. ‘Timmy and Gerty’s Partnership ‘Appropriation Account For the Year Ending 31 December 2022 s 8 (10 marks) GO ON TO THE NEXT PAGE a) (01239020/)/CSEC 2023r » 7 (i) Prepare Gerty’s current account using the information on page 18 and your answer ‘on page 19, Balance the account at 31 December 2022. Gerty’s Current Account For the Year Ended 31 December 2022 Date Details s Date Details s J (7 marks) GO ON TO THE NEXT PAGE 01239020N/C8EC 2023 L ing aNgN I Brr 2 a (&) (i State TWO components which Timmy and Gerty could have included in their partnership agreement in addition to the profit-sharing ratio, (marks) ii) State ONE reason why Timmy and Gerty decided to form a partnership. “a mark) ‘Total 20 marks GO ON TO THE NEXT PAGE | (01239020/NCSEC 2023, Lue 2. 7 Volcano Homeowners Credit Union has share capital of $400 000, ‘The following information is available forthe year ended 31 December 2022. Undistributed surplus b/d 1 January 2022 30.000 ‘Surplus forthe year ended 31 December 2022 | 90000 Additional information ‘The management committce decided that the surplus for the year ended 31 December 2022 should be distributed as follows, Five per cent of sumplus isto be transferred to the statutory reserve. A donation of $20 000 is to be given to members whose homes suffered volcanic damages. ‘An honorarium of $10 000 is to be paid to the board of directors. Dividends are to be paid ata rate of 2% of the share capital (@) —(@_Usethe information above to calculate the total dividends that would be paid to the ‘members of the Volcano Homeowners Credit Union, Show all working clearly. — (@ marks) GO ON TO THE NEXT PAGE, 01239020UCSEC 2023, L yee ai -B- ce] Use the information provided on page 22 to prepare the Voleano Homeowners (Credit Union’s appropriation acount for the year ended 31 December 2022. Use Volcano Homeowners Credit Union Appropriation Account For the Year Ended 31 December 2022 s s (7 marks) GO ON TO THE NEXT PAGE | (0123902010/CSEC 2023 Lr “ al (b) The treasurer ofthe credit union revealed the following end of yea balances on'31 December 2022. 8 Mortgage 200 000, Bank balance 20.000 Cash in hand 5.000 ‘Accounts payable 10.000 Share capital i +400 000 Long-term investments in other cooperatives 60.000 Statutory reserve 40,000 [Loans to members (due in 2030) 50.000 ‘Members’ deposits available to members at any time) 150.000 ‘Net book value of equipment 1 January 2022 210 000 ‘Accrued telephone expense # 3.000 Morigage interest outstanding 2.000 Additional information at 31 December 2022 + Equipment depreciation expense for the year was $50 000. + Membership fees due were $25 000. + Long-term investment purchased for $30 000 on 30 December 2022 was not included in the year-end balance. GO ON T0 THE NEXT PAGE, eel (012390204/CSEC 2023, Lif * 7 Use the information on page 24 to calculate EACH of the following totals for the credit. union. (@—Non-current assets (marks) i) Current liabilities G marks) GO ON TO THE NEXT PAGE, AN Hal (01239020/3/CSEC 2023 LiE ” 7 (©) Use the form provided below to prepare an extract of the capital and reserve seetion of the Voleano Homeowners Credit Union’s statement of financial position as at 31 December 2022 | ‘Voleano Homeowners Credit Union Statement of Financial Position For the Year Ended 31 December 2022 s 8 @ marks) ‘Total 20 marks END OF TEST IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST. 01239020//CSEC 2023