CSEC Principles of Accounts Paper 2 January 2023 - Free CXC Past Paper with Answers

(c)(i)

The following document is a credit note that was issued by Dimpo's Meat Shop. Examine the entire document carefully and then fill in the boxes with the missing figures to complete the credit note.

CREDIT NOTE

Dimpo's Meat Shop 32 Notre Street Morco

Seaside Restaurant and Bar Terese Street Morco

Date: 30 December 2022

Quantity	Description	Unit price	Amount
2	Mixed chicken parts	$120	$240
	Less:
			Total

Question 2 (18 marks)

Ellerslie is the owner of The Wedding Cake Maker. She uses absorption costing to price her products. Ellerslie has provided the following information on costs.

[10 marks]

(a)

In the relevant column of the table, to indicate whether the cost items are direct or indirect production costs.

[4 marks]

(b)

The following details are available about indirect costs for the decorations department.

Calculate the total indirect costs for the decorations department. Show all working.

[6 marks]

(b)(i)

State which is the dominant factor in the decorations department, based on the tabulated information above.

[1 mark]

(b)(ii)

Using the information from (a) (ii) on page 10 and (b) (i), calculate an absorption rate for applying overhead costs in the decorations department. Show all working clearly.

[3 marks]

(c)

(c)(i)

In December 2022, Ellerslie received an order for a customized wedding cake and incurred the following costs in its production.

Direct Materials Costs	$ 450
Direct Labour Costs	$ 1 250
Machine Hours Spent	20 hours

Use the absorption rate calculated in (b) (ii) on page 11 to work out the indirect overheads/costs for this order.

[2 marks]

(c)(ii)

In the space provided below, calculate the total production cost for this order.

[4 marks]

(d)

The Wedding Cake Maker has a mark-up policy of 50%.

Calculate the selling price for this special wedding cake order. Show all working clearly.

[3 marks]

(e)

Essa, the head cake maker, is given the job of making the customized wedding cake. It is the company's policy to pay its workers using the 'piece rate' system.

List ONE advantage of the piece rate system as a method of payment.

[1 mark]

Question 3 (20 marks)

Jumani owns an upholstery store. The accounts clerk prepared the following trial balance for the year ended 31 December 2022.

Jumani Upholstery Store

Trial Balance

For the Year Ended 31 December 2022

	Debit	Credit
	$	$
Revenue		379 900
Purchases	178 420
Cash	20 000
Inventory	32 000
Accounts receivable	26 000
Accounts payable		25 800
Non-current assets	207 400
Capital		152 000
Wages expenses	83 200
Utilities expenses	10 680
TOTAL	557 700	557 700

(a)

A review by the internal auditor revealed the following errors.

Prepare a corrected trial balance as at 31 December 2022.

[10 marks]

(a)(i)

Prepare a corrected trial balance as at 31 December 2022.

[10 marks]

(a)(ii)

State ONE reason for preparing a trial balance.

[1 mark]

(b)

State THREE types of errors that would not be detected by preparing the trial balance and give an example of EACH. An example has been provided for you.

[6 marks]

(c)

Jumani Upholstery Store's financial year ends on 31 December. The following account appears in the ledger.

Provision for Doubtful Debts Account

State the meaning of EACH of the following entries in the provision for doubtful debts account.

[3 marks]

(c)(i)

1 January 2022 balance b/d

[1 mark]

(c)(ii)

31 December 2022 income statement

[1 mark]

(c)(iii)

31 December 2022 balance c/d

[1 mark]

Question 4 (20 marks)

Timmy and Gerty are in partnership sharing profits and losses in accordance with their partnership agreement which states the following.


I	Interest on capital is allowed at 6% per annum.
II	Gerty is to be paid a salary of $75 000 per annum.
III	Interest to be charged on each partner's total drawings for the year at 3% per annum.
IV	Timmy and Gerty share the balance of profits and losses in the ratio 3:2 respectively.

Balances on the partners' current accounts at 1 January 2022 Timmy (credit) $14 000 Gerty (debit) $ 5 000

Balances on the partners' capital account at 1 January 2022 Timmy $90 000 Gerty $60 000

Partners' drawings for the year ended 31 December 2022 Timmy $2 500 Gerty $5 600

Net income for the year ended 31 December 2022 was $156 757.

(a)(i)

Prepare the appropriation account for the partnership for the year ending 31 December 2022.

Timmy and Gerty's Partnership Appropriation Account For the Year Ending 31 December 2022

	$	$

[10 marks]

(a)(ii)

Prepare Gerty's current account using the information on page 18 and your answer on page 19. Balance the account at 31 December 2022.

Gerty's Current Account For the Year Ended 31 December 2022

Date	Details	$	Date	Details	$

[7 marks]

(b)(i)

State TWO components which Timmy and Gerty could have included in their partnership agreement in addition to the profit-sharing ratio.

[2 marks]

(b)(ii)

State ONE reason why Timmy and Gerty decided to form a partnership.

[1 mark]

Question 5 (20 marks)

Volcano Homeowners Credit Union has share capital of $400 000. The following information is available for the year ended 31 December 2022.

	$
Undistributed surplus b/d 1 January 2022	30 000
Surplus for the year ended 31 December 2022	90 000

Additional information The management committee decided that the surplus for the year ended 31 December 2022 should be distributed as follows:

Five per cent of surplus is to be transferred to the statutory reserve.
A donation of $20 000 is to be given to members whose homes suffered volcanic damages.
An honorarium of $10 000 is to be paid to the board of directors.
Dividends are to be paid at a rate of 2% of the share capital.

(a)

Use the information above to calculate the total dividends that would be paid to the members of the Volcano Homeowners Credit Union. Show all working clearly.

[2 marks]

(b)

Use the information provided on page 22 to prepare the Volcano Homeowners Credit Union's appropriation account for the year ended 31 December 2022. Use the form provided below.

Volcano Homeowners Credit Union Appropriation Account For the Year Ended 31 December 2022

	$	$

[7 marks]

(c)

The treasurer of the credit union revealed the following end of year balances on 31 December 2022.

	$
Mortgage	200 000
Bank balance	20 000
Cash in hand	5 000
Accounts payable	10 000
Share capital	400 000
Long-term investments in other cooperatives	60 000
Statutory reserve	40 000
Loans to members (due in 2030)	50 000
Members' deposits (available to members at any time)	150 000
Net book value of equipment 1 January 2022	210 000
Accrued telephone expense	3 000
Mortgage interest outstanding	2 000

Additional information at 31 December 2022

Equipment depreciation expense for the year was $50 000.
Membership fees due were $25 000.
Long-term investment purchased for $30 000 on 30 December 2022 was not included in the year-end balance.

Use the information on page 24 to calculate EACH of the following totals for the credit union. (i) Non-current assets (5 marks) (ii) Current liabilities (3 marks) (iii) Use the form provided below to prepare an extract of the capital and reserve section of the Volcano Homeowners Credit Union's statement of financial position as at 31 December 2022. (3 marks)

Volcano Homeowners Credit Union