CSEC Principles of Accounts Paper 2 May/June 2010 - Free CXC Past Paper with Answers

Angel and Karissa are in partnership, sharing profits and losses in the ratio 3:2. Interest on Drawings is charged at the rate of 5% per annum and interest on capital is 10% per annum. Angel and Karissa receive salaries of $15 000 and $8 000 respectively. Some of the Current Account entries for the partners for the period ended December 31, 2009 are set out below.

Angel and Karissa

Current Accounts

Copy the account above in your answer booklet. (i) Calculate and enter the interest on drawings to be charged to EACH partner.

Balance the Current Accounts of the partners. (Show workings.)

State the significance of BOTH balances brought down as at December 31, 2009.

State ONE possible reason why Angel and Karissa earn different salaries.

From the information in your Current Accounts, prepare the Appropriation of Profits Account for Angel and Karissa for the year ended December 31, 2009, showing clearly the net profit of the partnership.

Calculate the capital invested by EACH partner. (Show workings.)

Khalel, the owner of Khalel's Gardening Centre, kept only single entries of his transactions. On January 31, 2010, he provided his bank manager with the following information but could not answer a number of questions.

The bank manager gave several reasons why this method was not very helpful. He also advised Khalel about using different methods to convert his records to double entry records.

(i) State TWO limitations of single entry records.

State TWO limitations of single entry records.

Prepare a Statement of Affairs as at February 01, 2009, to convert Khaleel's Gardening Centre's single entry records.

Khaleel also provided the following information:

1. All sales were made on credit. Debtors paid $32 600 by cheque during the year. The account of one debtor for $75 had been written off as bad debt.
2. All purchases totalling $17 455 were made on credit.
3. In addition to other liabilities, Khaleel borrowed $2 000 from his sister on February 01, 2009. This is to be paid by June 30, 2010. The interest rate is 5% per annum, but neither the loan nor the interest due had been recorded.
4. All other expenses (including water rates and electricity) totalled $6 115 for the year.

Khalel also provided the following information:

1. All sales were made on credit. Debtors paid $32 600 by cheque during the year. The account of one debtor for $75 had been written off as bad debt.
2. All purchases totalling $17 455 were made on credit.
3. In addition to other liabilities, Khalel borrowed $2 000 from his sister on February 01, 2009. This is to be paid by June 30, 2010. The interest rate was 5% per annum, but neither the loan nor the interest due had been recorded.
4. All other expenses (including water rates and electricity) totalled $6 115 for the year.

Prepare a Sales Total (Control) Account for Khalel's Gardening Centre to calculate the total Credit Sales for the period ended January 31, 2010.

Prepare an Income Statement for Khaleel's Gardening Centre for the year ended January 31, 2010.

In which classification section of the Balance Sheet should Khaleel record the loan from his sister?

Prepare the Appropriation Account of the company for the year ended November 30, 2009. (Show all workings)

Prepare a classified Balance Sheet as at November 30, 2009, for Cancun Guest House Limited.

Prepare a Manufacturing Account for the year ended December 31, 2009, showing clearly:

• The cost of raw materials consumed
• The prime cost
• Factory overheads

Prepare the Income Statement for the year ended December 31, 2009.

Using the stock form provided, determine the value of the tyres remaining in stock at October 31, 2009. Joe Mukram uses the LIFO method of stock valuation.

Prepare a Trading Account for the month ending October 31, 2009.

Identify ONE internal user of accounting information and state how this information is used by that user.

Identify ONE internal user of accounting information and state how this information is used by that user.

Identify ONE external user of accounting information and state how this information is used by that user.

Identify the type of business organisation described in EACH situation below:

Several employees are employed in a large organisation owned by a single person.

Three brothers operating a business where the action of one brother is binding on the other two brothers.

Shareholders cannot sell their shares in the company on the stock market.

Groups of consumers or producers form an organisation to provide services to its members.

An organisation, operated by members, to provide services to members and is often financed by donations, fund-raising and subscriptions.

Each of the transactions below violates an accounting concept or principle. State the concept or principle that is being violated.

Credit sales made in March of 2010 were not recorded until the money was received in May 2010.

Due to the bankruptcy of Mr Dragon, a debtor, the business is likely to lose $20 000. Management refuses to write off this amount as a bad debt or to create a provision for bad debts.

In order to report higher profits for the financial year, management has changed from the straight line method of depreciation to the reducing balance method.

Mr Lumberjack paid the insurance for his private house and recorded it as a business expense.

Draw a labelled diagram of the six (6) stages of the accounting cycle.