CSEC Principles of Accounts Paper 2 May/June 2007 - Free CXC Past Paper with Answers

State (i) the most appropriate source document and (ii) the book of original entry which Pinto should use for each of the transactions below. (Write your response in your answer booklet).

Transaction	Source Document	Book of Original Entry
a) Pinto returned some goods previously purchased. They were the wrong order.
b) Sent a cheque to S. Morgan for goods purchased.
c) Sold an old computer (no longer suited for the business) on credit to Longsdale Primary School.
d) A customer returned damaged goods previously bought from Pinto.

On January 1, 2004 the S & S Company had $7 500 balance in its Provision for Bad Debts account. The company's policy is to provide 5% of debtors as bad debts provision. The company's year ended December 31.

The debtors for the following 3 years were as follows:

December 31, 2004: $180 000
December 31, 2005: $135 000

The Sharks Bay Fishermen's Cooperative Society has a share capital of $150 000. The Income and Expenditure Account for the year ending March 31, 2006 shows a surplus of $36 200. Undistributed surplus brought forward from the previous year is $6 000. The management committee decided that the surplus should be shared in the following manner:

(i) 18% is to be transferred to a statutory reserve account. (ii) 15% is to be placed in a scholarship fund for fishermen's children. (iii) Dividends should be paid to members at the rate of ten cents to the dollar. (iv) A donation of $10 000 is to be made to members who suffered hurricane damages.

Prepare the Appropriation Account of the Sharks Bay Fishermen's Cooperative Society.

The following list of balances was taken from the books of the Teachers' Cooperative Credit Union on April 30, 2006. Use the information to prepare the Balance Sheet of the credit union. Suitable headings and grouping of the items must be observed. The working capital must be shown.

	$
Long Term Liability: Loan from D & B Investment Co.	250 000
Bank balance	354 000
Cash in hand	10 000
Accounts Payable (Creditors)	175 000
Share Capital	2 054 000
Long term investments	700 000
Statutory Reserve	75 000
Loans to members	1 500 000
Surplus	33 000
Members deposits	27 000

The following Trial Balance was extracted from the books of K. Boorasingh on December 30, 2006:

K. Boorasingh

Trial Balance on December 30, 2006

	DR $	CR $
Capital		20 600
Drawings	4 550
Stock (January 1, 2006)	2 150
Debtors	4 380
Creditors		6 122
Sales		66 190
General expenses	9 602
Purchases	33 205
Motor Vehicle at cost	15 000
Provision for depreciation on motor vehicles		5 500
Bank	31 620
	100 507	98 412

The Trial Balance does not balance. On investigation, the following errors were discovered:

(1) A credit sale to Briggs for $68 had been omitted completely from the books. (2) A purchase of $160 from Simmonds was entered in Simmonds' account but omitted from purchases account. (3) A credit sale to Lee-Chin for $129 was entered in the books as $120. (4) Drawings of $100 were recorded as $1 000. (5) A receipt from McBeth for $1 500 being bad debts recovered was entered in the cash book but not credited to any account. (6) An invoice of $145 from S. Harricharan was credited in error to both S. Harricharan and S. Hamilton.

Required: (a) Record the journal entries necessary to correct each of the errors. Narrations are not required. (b) Open the suspense account and enter the difference on the trial balance. Post the relevant entries and close the account. (c) Redraft the corrected trial balance.

Record the journal entries necessary to correct each of the errors. Narrations are not required.

Open the suspense account and enter the difference on the trial balance. Post the relevant entries and close the account.

Redraft the corrected trial balance.

Sally Walker is a sole trader who operates a variety store. Trading started on March 1, 2006. The following transactions in a certain product occurred during the month.

March
1	Purchased	20 units	@	$4
3	Purchased	30 units	@	$5
5	Sold	25 units	@	$7
6	Purchased	60 units	@	$5.50
7	Sold	40 units	@	$8
8	Sold	30 units	@	$8.20

Required: (a) Complete the stock form provided using the FIFO method of stock valuation to determine the number of units and cost per unit of stock remaining on March 8. (b) Calculate the value of the remaining units (stock) using the FIFO Method. (c) Assume that the units sold on March 7 were those bought on March 6: (i) Calculate the gross profit made on the units sold on March 7. (Show workings.) (ii) What method of stock valuation is being assumed? (d) Name ONE other method of stock valuation.

Answer Sheet for question 6 (a) is provided on page 9.

Complete the stock form provided using the FIFO method of stock valuation to determine the number of units and cost per unit of stock remaining on March 8.

Answer Sheet for question 6 (a) is provided on page 9.

Calculate the value of the remaining units (stock) using the FIFO Method.

Assume that the units sold on March 7 were those bought on March 6:

Calculate the gross profit made on the units sold on March 7. (Show workings.)

What method of stock valuation is being assumed?

Name ONE other method of stock valuation.

The Bridgeway Theatre Club is an amateur dramatic club that rents premises in which it has established a theatre and bar for the use of members. The club's treasurer has produced the following summary of the club's receipts and payments during the year ended 31 May 2006:

Bridgeway Theatre Club

Receipts and Payments Account

For year ended May 31, 2006

	$		$
Cash and Bank balance b/f	2 200	Secretarial Expenses	1 100
Members subscriptions	19 920	Rent of Premises	3 980
Donations	1 000	Production Expenses	37 600
Bar takings	51 800	Bar suppliers	29 400
Ticket sales	34 640	Bar expenses	8 380
Grants and subsidies	27 000	Cost of guest artistes	1 800
		Stationery and printing	2 200
		Purchase of Motor Vehicle	30 200
		Other expenses	9 020
		Cash and bank balance	1 920
	126 560		126 560

The following information is also available:

	June 1, 2005	May 31, 2006
	$	$
Subscriptions in arrears	700	920
Subscriptions in advance	320	120
Owing to bar suppliers	2 600	3 000
Bar Stock	5 240	4 660
Production expenses owing	4 980	4 080
Valuation of theatre equipment	70 000	62 000

Required: (a) Prepare the Subscriptions Account for the year ended May 31, 2006. (b) Prepare the Bar Suppliers Account to determine purchases. (c) Prepare the Bar Trading Account for the year ended May 31, 2006, showing clearly profit or loss made by the bar. (d) Prepare the Theatre Productions Account showing the surplus or deficit made on productions for the year ended May 31, 2006.

Prepare the Subscriptions Account for the year ended May 31, 2006.

Prepare the Bar Suppliers Account to determine purchases.

Prepare the Bar Trading Account for the year ended May 31, 2006, showing clearly profit or loss made by the bar.

Prepare the Theatre Productions Account showing the surplus or deficit made on productions for the year ended May 31, 2006.

CSEC Principles of Accounts Paper 2 May/June 2007 Questions

Question 3 (20 marks)

Question 4 (20 marks)

Question 5 (20 marks)

K. Boorasingh

Trial Balance on December 30, 2006

Question 6 (20 marks)

Question 7 (20 marks)

Bridgeway Theatre Club

Receipts and Payments Account

For year ended May 31, 2006