CSEC Principles of Accounts Paper 2 May/June 2017 - Free CXC Past Paper with Answers

Question 2 (20 marks)

(a)

ORILDA'S UNISEX HAIR SALON and PHOENIX PROCESSORS

(a) Orilda's Unisex Hair Salon presents the following accounts from her General Ledger.

Purchases

Date	Details	$	Date	Details	$
05 May	Emily's Hair Products	3 500	06 May	Drawings	250

Emily's Hair Products

Date	Details	$	Date	Details	$
05 May	Returns Out	410	5 May	Purchases	3 500

Motor Vehicles

Date	Details	$	Date	Details	$
01 May	Balance b/f	15 000	03 May	Easy Motors Company	15 000
03 May	Easy Motors Company	40 000

Easy Motors Company

Date	Details	$	Date	Details	$
03 May	Motor Vehicles	15 000	03 May	Motor Vehicles	40 000
03 May	Bank	25 000

Wages

Date	Details	$	Date	Details	$
7 May	Capital	1 550

6% Five-Year Bank Loan

Date	Details	$	Date	Details	$
			2 May	Bank	25 000

(a)(i)

Using the accounts on page 8, give ONE example of EACH of the following types of accounts.

Nominal Account
Personal Account
Current Liability
Non-current Asset
Long-term Liability

[5 marks]

(a)(ii)

In the space provided on the form below, write a narrative to explain each transaction identified by the date it occurred.

01 May
03 May
06 May
07 May

[5 marks]

(b)

Phoenix Processors records its weekly cash flow in the format below. The records are for the first week in the month of July 2016.

(i) What kind of entry is the one made on 03 July 2016?

Cash and bank transactions for Phoenix Processors for the remainder of July are as follows:

08 Owner withdraws cash from bank to pay his house rent
09 Debtor – S. Francis paid with a cheque for $2000 and the remainder in cash
10 Cash sales deposited immediately in bank account
11 Payment to creditor – J. Davis by cheque
18 Purchases paid for by bank’s credit card
25 Cash sales
29 Wages paid in cash

(ii) Using the form on page 11, prepare the Cash Book of Phoenix Processors for the month of July 2016 including the transactions of the first week.

[20 marks]

(b)(i)

What kind of entry is the one made on 03 July 2016?

[1 mark]

(b)(ii)

Using the form on page 11, prepare the Cash Book of Phoenix Processors for the month of July 2016 including the transactions of the first week.

[9 marks]

Question 3 (20 marks)

KWAME’S PUNCHES

In the year ended 30 June 2016, Kwame sold 25 000 fruit punches for a total of $275 000.

[20 marks]

(a)

Calculate the selling price for each of Kwame’s fruit punches. (Show all working clearly.)

[3 marks]

(b)

Kwame’s costs for each fruit punch are as follows.

Tropical fruit mix	$1.50
Milk	$0.68
Cane sugar	$0.20
Flavour booster	$0.12

Calculate the gross profit made by Kwame on each fruit punch. (Show all working clearly.)

[4 marks]

(c)

Kwame’s other costs for the year include the following.

Rent	$36 000
Electricity	$18 950
Insurance	$ 4 500
Wages	$54 240
Maintenance and repairs	$ 1 260

Additional information: For the two years ending 30 June 2016, Kwame has owned five blenders valued at $2700. He expects to replace all five blenders by 30 June 2017. When drafting his income statements, Kwame uses the straight line method of depreciation.

Draw up Kwame’s Income Statement for the year ended 30 June 2016.

[10 marks]

(d)

Calculate, for Kwame, the percentage of each sales dollar paid out in labour costs. (Show all working clearly.)

[3 marks]

Question 4 (32 marks)

SECTION II Answer the TWO questions in this section. Write your answers in the spaces provided in this booklet.

HOUSE AND HOME, PARTNERS House and Home, who have been in the business of shipping goods to and from islands in the Caribbean for several years, provided you with the following information.

31 December 2016

	$
Ships	180 000
Loading equipment	93 000
Accounts receivable	42 000
Cash	18 000
Accounts payable	61 000
6 month investment in government loan scheme	12 000
5% three-year loan from Warren Bank	90 000
Bank overdraft	8 000
Prepaid insurance	15 000

Additional information:

House has contributed twice as much capital as Home.

(a)

Using the vertical style draw up a classified Statement of Financial Position (Balance Sheet) for House and Home Partners as at 31 December 2016.

[12 marks]

(b)

Using the forms provided on pages 19 and 20, prepare the partners' Current Accounts to show the changes in their balances over the year.

[20 marks]

Question 5 (29 marks)

(a)

STORECRAFT COOPERATIVE (CRUSOE GETAWAY) (a) The treasurer of StoreCraft Cooperative presents the following information for the year ended 31 March 2016.

	$
Gross Profit	40 000
Honoraria to members	3 500
Bank fees	1 100
Fees paid for training of members	3 800
Interest from investments	6 910
Retained profits from last year	12 500

(i) Using the information above, prepare StoreCraft Cooperative's Income and Expenditure Account for the year ended 31 March 2016.

(a)(i)

Using the information above, prepare StoreCraft Cooperative's Income and Expenditure Account for the year ended 31 March 2016.

[4 marks]

(a)(ii)

The treasurer of StoreCraft Cooperative knows that

the Cooperative Act requires that 25% of profits must be transferred to a Reserve Funds Account
the Cooperative's bye-law requires that 20% of profits after such transfer be shown as retained profits
all other profits are paid out to members as dividends.

Based on the requirements above, prepare StoreCraft Cooperative's Income Appropriation Account for the year ended 31 March 2016.

[5 marks]

(b)

StoreCraft Cooperative owns a small hotel consisting of ten guest rooms called Crusoe Getaway. The Cooperative employs a front desk manager, a housekeeper and a cook. Each employee is paid using a different method of payment. The following information is presented to you.

	Front Desk Manager	Housekeeper	Cook
S. Vestiga	$3900 per month
L. Pattigow		$20 per guest room per day
P. Adams			$15 per hour, double time for hours worked over 160 hours per month

(i) Give the proper names of any TWO of the payment methods that may be used by StoreCraft Cooperative.

During March 2016, the payroll information was extracted and is shown below.

	Statutory Deductions		Income Tax after all Statutory Deductions	Voluntary Deduction
	National Insurance	Pension Plan
S. Vestiga	One month	5%	3%	10%
				$200 for credit union
L. Pattigow	20 days worked for all guest rooms	5%	3%	10%
				$300 for bank loan
P. Adams	172 hours	5%	3%	10%

(ii) Using all the information given, complete the form given on page 23. (N.B. You are to round off numbers that are less than $1.00 and be sure to show your working.)