TEST CODE 001092

FORM TP 23123

May/June 2003
CARIBBEAN

EXAMINATIONS

COUNCIL

SECONDARY EDUCATION CERTIFICATE

EXAMINATION
PRINCIPLES OF ACCOUNTS
Paper 02 - General Proficiency
3 hours
07 MAY 2003 (a.m.)

1.

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

2.

Begin EACH answer on a separate page.

3k.

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 2002 Caribbean Examinations Council.
All rights reserved.
001092/F 2003

-2SECTION I
Answer all THREE questions in this section.
1. (a) The following transactions were identified during the month of March, 2002 at William
Skills' Enterprise but they were NOT recorded in his books as he was uncertain about
the appropriate book in which to record each transaction.
(i) March 3
Sold goods on credit to George Martin
$ 6 000
(ii) March 4

Purchased supplies from C. Khan for cash

$ 2 000

(iii) March 7

Bought motor van on credit from Van Sales

$60 000

(iv) March 10

Bought goods for cash from Catburry Ltd

$11 000

(v) March 14

Sold goods to C. Martin for cash

$ 6 700

(vi) March 17

Bought goods on credit from P. Wisdom

$10000

(vii) March 20

Returned goods to P. Wisdom (wrong size)

$ 1 000

(viii) March 22

Sold goods on credit to V. Tate

$ 3 000

(ix) March 25

V. Tate returned goods (damaged)

$ 200

(x) March 28

Bought fixtures on credit from Y. Taylor

$16000

Select the appropriate books of original entry on the form provided and record EACH
transaction for the month of March.
(8 marks)
(b) Olga Lewis keeps her petty cash on the Imprest System. Her imprest amount for the
month of June 2001 is $600. Her petty cash transactions were as follows:
$
2001
May 31
Petty cash in hand
18
June 1
Petty cash restored to the imprest
June 4
Stamps bought
60
June 7
Stationery
36
June 8
Janitor's wages
45
June 14
Bought stamps
60
June 18
Stationery
84
June 19
Janitor's wages
45
June 29
Taxi fare
48
Stationery
30
June 30
Minor repairs
60
Electricity
45
Telephone
78
On the form provided, you are required to:
(i) Restore the imprest amount at June 1.
(ii) Enter the petty cash transactions in the Petty Cash Book.
(iii) Balance the Petty Cash Book for the month of June.
(iv) Reimburse the petty cash with the imprest amount.
(12 marks)
001092/F 2003
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-32.

Cain and Able are in partnership sharing profits and losses in proportion to their capital
account balances. At September 30, 2001 the balances on their capital and current accounts
were:
Cain
Able
Capital a/c
$60 000
$90 000
Current a/c
420 Dr.
3 450 Cr.
On October 1, 2001 they admitted Bratt into the partnership. Bratt brought in $20 000 cash and
a motor van valued at $10 000, as capital. The three partners agreed to share profit and losses
in proportion to their capital accounts. In the new partnership, each partner is to receive 5%
interest on capital and Cain will receive a salary equivalent to 10% of profits.
During the first year of operation Cain withdrew $6 000, Able withdrew $15 000 and Bratt
withdrew $4 000 cash. Interest on drawings is charged at 5% for a full year. At the end of the
year, the records showed:
Cain's drawings for a period of 9 months
Abie's drawings for a period of 6 months
Bratt's drawings for a period of 3 months
The profit for the year ending September 30, 2002 amounted to $90 000.
Prepare the following:
(a) The Journal entry to record the admission of Bratt.

(4 marks)

(b) The Partnership's Appropriation of Profit Account for the year ending September 30,
2002 (Use full headings).
(8 marks)
(c)

The Current Account of EACH partner to show their closing balances.

(8 marks)

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001092/F 2003

-4(a) During the month of September 2001, Batco Stores recorded the following receipts
and issues of bottled jams from its stores:
September
1
Balance in store 5 cases at $50 per case
3.

Received 10 cases at $52 per case

10

Issued 6 cases

16

Received 10 cases at $55 per case

26

Issued 8 cases

On the form provided record the receipts and issues and determine the value of closing
stock of bottled jams at the end of September 2001. (Batco Stores uses the FIFO
method of stock valuation.)
(10 marks)
(b) Fishing Sales Enterprise has prepared their simplified Final Accounts for the - year
ending October 30, 2001.
Fishing Sales Enterprise
Trading & Profit & Loss Account
Year ended October 30, 2001
$
1000
11 200
12200
800
11400

Opening Stock
Add: Purchases
Less closing stock
Cost of goods sold
Gross profit c/d
Wages and Salaries
Utilities
Insurance owing
Other expenses
Net profit

$
20000

Sales

8600
20000
3000
500
200
1300
7600
12600

20000
Gross profit b/d
Rent received

8600
4000
_____
12600

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001092/F 2003

-53. (b) cont'd

Fixed assets total (net)

Current assets total

Fishing Sales Enterprise

Balance Sheet
as at October 30,2001
$

16000
Capital including net profit 10000
12 000
Long-term liability
8 000
_____
Current liabilities
10000
28 000
28 000

Calculate the following for Fishing Sales Ltd:

(i)

Average stock

(ii)

Gross profit percentage

(iii)

Net profit percentage

(iv)

Rate of return on investments in fixed assets

(v)

\Rate of turnover

(vi)

Current ratio

(vii)

Working capital

(viii) The new net profit percentage if NO rent was received

(ix)

Acid test ratio

(x)

The effect on net profit if closing stock was $1 600

(10 marks)

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001092/F2003

-6SECTION II
Answer any TWO questions in this section.
4.

The following Trial Balance for Halliday Company Ltd relates to the year ending December
31,2001.
. $
$
Sales
185000
Purchases
9400
Salaries
19 600
Insurance
8 400
Electricity
3500
Telephone
4 200
Auditor's fees
900
Director's remuneration
3100
Interest on debentures
1 600
Interest on bank overdraft
700
Miscellaneous expenses
2 400
Ordinary dividend paid
3 000
Building at cost
109400
Accumulated depreciation on building
4 100
Machinery at cost
19300
Accumulated depreciation on machinery
2 300
Debtors
27 300
Cash
1 800
Creditors
13 700
Bank overdraft
8 600
8% debenture
20 000
Ordinary share capital 20 000 at 50 cents
10 000
Profit and Loss a/c at Jan. 1, 2001
73 000
Opening stock January 1,2001
17500
_____
316700
316700
Other Information
-

Depreciation for the year - building $1 100 and machinery $1 600

Closing stock December 31, 2001 $ 15 400
Dividend proposed $5 000

Prepare the company's Trading and Profit and Loss and Appropriation Account for the year
ending December 31, 2001 and a Balance Sheet as at December 31, 2001. (Use complete
headings on your statements.)
(20 marks)
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001092/F2003

-75. George Giscombe does NOT maintain a complete set of accounting records. However, he
provided you with the following information:
George Giscombe
Summarised Bank Account for the year ending Dec. 31, 2001
2001
Jan 1 Bal b/f
Receipts from debtors

$
20000
190 000

Wages and salaries

Drawings
Electricity
Insurance
Bank charges
Payment to creditors
General expenses
Telephone
Balc/d

210000

Creditors
Prepaid telephone
Debtors
Insurance owing
Stock
General expenses owing
Motor van at cost

Dec. 31, 2001

$
24000
1000
18000
5000
16000
1800
35000

$
35000
4650
12000
6000
900
92500
15000
8000
35950
210000

Dec. 31,2000
$
28000
1400
21000
8000
27000
3000
35000

Provision for Depreciation on motor van is to be based on 10% on the straight line method.
Prepare for George Giscombe the following:
(a) Trading and Profit and Loss Account for the year ending December 31, 2001.
(12 marks)
(b) Balance Sheet as at December 31, 2001.
(Use full headings on your statements.)

(8 marks)

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001092/F 2003
6.

(a)

-8Give a brief definition of EACH of the following:

(i) Bank charges
(ii) Bank statement
(iii) Credit transfer
(iv) Unpresented cheques
(v) Standing order
(vi) Dishonoured cheques
(vii) Uncredited cheques

(5 marks)

(b) The bank transactions of Ruby Brown for the month of July 2001 were recorded in her
Cash Book as shown below. The Bank Statement for the month of July, 2001 is also
shown on page 9.
Cash Book
Date
Particulars
Bank
Date
Particulars
Cheque #
Bank
2001
$
2001
$
July 1

Balance b/d

10

Cash

17

July 5

V. Enterprise

671

400

250

Water Works

672

200

G. Thompson

75

19

Y. Gillbert

673

50

22

G. Coombs

75

23

C. Camper

674

125

27

Y. Davis

110

25

General Stores

675

100

29

E. Ellis

65

27

Gents Supplies

676

175

29

Gas Supplies

677

205

31

Balance c/d

Aug. 1

Balance b/d

1000

1575
320

320
1575

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001092/F 2003
-96.

(b) cont'd
Date

Description

Bank Statement of Ruby Brown

Cheque Debit
Credit

2001
July l

17

250

19

75

23
25
27

29
30

Balance

10

28

Balance

1000

CR

1250

CR

1325

CR

673

50

1275

CR

674

125

1150

CR

675

100

1050

CR

676

175

875

CR

1075

CR

100

975

CR

50

925

CR

Credit transfer: Y. Seaton

Standing Order: P.IRE

200

Bank charges

0) Update the Cash Book of Ruby Brown.

(5 marks)

(ii) Prepare the Bank Reconciliation Statement starting with the Bank Statement
Balance and ending with the updated Cash Book Balance.

(8 marks)

(iii) What Bank Balance would appear on the Balance Sheet of Ruby Brown as at
July 31,2001?

(8 mark)

(iv) What is the change in Ruby Brown's bank balance between July 1 and July 31,
2001 ?

(8 mark)

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001092/F2003
-107.

Environment Enterprises was contracted by the Local Government Authority to manufacture

wooden benches. For the six-month period ending June 30, 2002 the enterprise produced
500 benches. The following information relates to the manufacturing operations for the period:
Stock at January 1, 2002
Raw material
Work in progress

2 000
5 000

Stock at June 30, 2002

Raw material
Work in progress

1 800
2 000

Purchase of raw material

Carriage on raw material
Factory wages
Salary of factory manager
Direct expenses
Factory insurance
Factory power
General factory expenses
Annual depreciation on plant and machinery

60 000
3 000
24 000
15000
5 000
2 000
3 800
4 000
12 000

All other non-factory/administration expenses $45 per unit.

(a) Prepare Environment Enterprises' Manufacturing Account for the six-month period
ending June 30, 2002. Show clearly:
-

Cost of material available

Cost of material consumed
Prime cost
Factory overheads
Cost of production

(14 marks)

(b) Calculate the production cost per unit.

( 1 mark)

(c) Calculate the total cost per unit.

( 1 mark)

(d) Show the total revenue from benches if the local authority pays $400 per bench.
( 1 mark)
(e) What is the six month profit on the production of benches?
(f) Distinguish between direct cost and indirect cost.
END OF TEST
001092/F2003

( 1 mark)
( 2 marks)