CSEC Principles of Accounts Paper 2 May/June 2005 - Free CXC Past Paper with Answers

Oliver Bentley maintains control accounts in his general ledger. He prepared a Sales Ledger Control Account for January 2004, with information derived from his subsidiary books. The debit balances shown in the Sales Ledger Control Account at January 31, 2004, does not agree with the list of debtors extracted from the sales ledger at that date. The value of debtors according to the sales ledger at January 31, 2004, was $14 872.

The following errors were subsequently discovered:

1. K. Boodraj, a bad debtor whose account had been written off in 2003, sent a cheque for $198. The amount was entered in the sales ledger.
2. In January a page of the sales returns day book had been overcast by $200.
3. Discounts received of $156 had been mistakenly entered in the discounts allowed column of the cash book in January 2004.
4. A debit balance of $824 on S. McCalla's account in the sales ledger had been set off against his account in the purchases ledger. This entry had not been recorded in either control account.
5. A $58 discount allowed to Ram Sookie had been correctly entered in the cash book but had not been entered in Ram's account.

Chris and Dorcas are in partnership. Their capital and current accounts as at January 1, 2004, are as follows:

	Capital Balances	Current Balances	Drawings
Chris	40 000	5 000 (Credit)	17 000 (on June 30)
Dorcas	60 000	3 000 (Credit)	12 000 (on April 30)
			12 000 (on August 31)
			12 000 (on December 31)

The partnership agreement provides for the following:

1. Profits and losses are shared between Chris and Dorcas in the same ratio as their capital.
2. Chris is to be credited with a salary of $6 000 per annum.
3. Interest on capital at 8 per cent per annum is allowed.
4. Interest on drawings is charged at 10 per cent per annum.

The profit for the year is $95 950.

McNaughton Tools is a small manufacturing establishment. At the end of the accounting year, February 28, 2004, the following information was available.

	$
Stocks, March 1, 2003
Raw materials	27 000
Finished goods	35 000
Work-in-progress	7 500
Factory wages (direct)	150 000
Factory salaries	25 700
Purchases of raw materials	36 300
Returns outwards	500
Factory power and fuel	83 200
Sales	532 800
Insurance	2 400
Administrative expenses	120 000
Returns inwards on finished goods	3 000
Stocks, 28 February, 2004
Raw materials	15 600
Finished goods	20 000
Work-in-progress	13 200
Machinery at cost	100 000

You are given the following additional information:

1. Machinery is to be depreciated at the rate of 25 per cent per annum
2. Factory power and fuel is in arrears of $720
3. Insurance, which is to be divided in the ratio 3:1 between the factory and the office, is prepaid in the amount of $200.

The balances below remained in the books of Stanigar Ltd after the preparation of the Trading and Profit and Loss Account for year ended June 30, 2004.

	$
Net profit	319 400
Debtors	86 000
Creditors	38 000
Interim dividend paid to ordinary shareholders	30 000
Fixed assets at cost	548 000
Accumulated depreciation	27 400
Unappropriated profits brought forward	55 000
Ordinary shares ($2 each)	100 000
5 per cent preference shares ($3 each)	40 000
Stock (June 30, 2004)	66 000
Bank overdraft	15 000
Prepaid expenses	3 500
Interest on loan outstanding	56 000
Cash balance	2 500
Directors fees outstanding	45 000
14 per cent loan	30 000

The directors of Stanigar Ltd recommended the following:

1. That TWO reserves be set up, namely, (i) a general reserve of $15 000, and (ii) a reserve of $7 000 for asset replacement.
2. Ordinary shareholders be paid a final dividend of 20 cents per share.
3. Preference shareholders dividend be paid.

The Bridge Town Cricket Club had the following assets and liabilities at January 1, 2004.

Sports equipment $20 000, stocks of refreshments $1 000, creditors for refreshment $5 500, bank balance $10 000, subscriptions owing $500.

During the year the following receipts and payments were made by the treasurer of the cricket club.

Receipts

	$
Subscriptions - Year ended 2003	500
Subscriptions - Year ended 2004	23 000
Subscriptions - Year ended 2005	600
Sale of refreshments	25 800
Sale of raffle tickets	4 200

Payments

	$
Printing of raffle tickets	400
Payment to creditors	15 200
Purchase of sports equipment	12 000
Wages:
Groundsman	3 000
Utilities	4 000
Rent	12 000

Additional information at December 30, 2004, reveals that:

1. Subscriptions owing for year ended 2004 is $440.
2. Utility bills still outstanding $350.
3. Stocks of refreshment at December 30, 2004, was $6 250.
4. Sports equipment is to be depreciated at the rate of 10 per cent per annum.
5. Creditors for refreshment $2 170.
6. Rent prepaid at December 30, 2004, was $300.

James Sigler is a garage mechanic who will visit the customer at home to find the source of trouble and then, if necessary, advise the customer to send the vehicle to his business place for repairs. When out on a job James Sigler is paid at the "customer care" rate. When in the garage he works an eight-hour shift from 8.00 a.m. to 4.00 p.m. with an hour for lunch. Any additional hours registered by the automatic clock are considered overtime hours.

The following are two documents recording his work for the week ending May 6, 2005.

CAR DOCTOR ENTERPRISES

DEPARTMENT: Customer Care

TIME SHEET

MECHANIC: James Sigler Clock # 16

Date / time started / ended: May 2, 2005, 8.00 a.m. - 1 p.m. Description of work required:

1. Travel to and from customer's premises - 45 mins.
2. Check source of problem - 3 hours
3. Advise customer to send in for repairs - 15 mins

S. Dale Signature: Operator

Foster Khan Signature: Customer

Trev Leeson Signature: Supervisor

CAR DOCTOR ENTERPRISES

CLOCK CARD

	IN	OUT	IN	OUT
MONDAY MAY 2	8.00	12.00	1.00	4.00
TUESDAY MAY 3	8.00	12.00	1.00	4.00
WEDNESDAY 4	8.00	12.00	1.00	5.00
THURSDAY MAY 5	8.00	12.00	1.00	5.00
FRIDAY MAY 6	8.00	12.00	1.00	4.00

Additional Information:

1. "Customer Care" rate is $20 an hour.
2. Regular work hours (8:00 a.m. to 4:00 p.m.) are $12 an hour, and one-and-one-half ($1 \frac{1}{2}$) the regular rate is paid for overtime work done.
3. The firm deducts the following: PAYE 10 per cent; Health Security 5 per cent and a savings plan contribution of 5 per cent of weekly wages.