CSEC Principles of Accounts Paper 2 May/June 2025 - Free CXC Past Paper with Answers

Free CXC Principles of Accounts Paper 2 May/June 2025 past paper from 2025. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.

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CSEC Principles of Accounts Paper 2 May/June 2025 Questions

Every question from this paper as text. See the answers and worked solutions. Questions are the property of the Caribbean Examinations Council; Caribbean AI is not affiliated with CXC.

Question 1 (10 marks)

(a)

Beharry prepared the following statement of account for a credit customer. Complete the statement of account by inserting the missing balances.

Beharry

La Vieux Forte Saint Lucia

STATEMENT OF ACCOUNT

T. Mores 9 Sans Soucis Street Saint Lucia

August 31, 2024

Date	Reference	Invoice $	Settlement $	Balance $
2024
August 1	Balance b/d			520
9	Invoice	340		(i)
13	Credit note		24	(ii)
24	Cheque		663	(iii)
	Discount		17	(iv)

(b)

The opening balances on August 1, 2024 were as follows.

Cash $ 100
Bank overdraft $8 150

Transactions for the month of August were as follows.

Date	Transactions
2024
August 9	A cheque received in July for $462 from AD Supplies was dishonoured by the bank.
18	Beharry paid $64 by cheque for gas for his wife's motor vehicle.
24	Received a cheque from T. Mores to settle her debt of $680 less $2 \frac{1}{2}\%$ discount.
27	Paid $4 000 by cheque. This included $3 600 for new office equipment and the balance for repairs to an existing piece of office equipment.
30	Cash sales amounted to $4 224.
31	Deposited all cash on hand into the bank account except for $500.

(i) Use the form provided on page 7 to prepare Beharry's three-column cash book for the month of August. Balance the cash book and bring down the balance as at September 1, 2024.

[10 marks]

(d)

Use information from the statement of account on page 5 and the cash book on page 7 to prepare the account of T. Mores in Beharry's books. Be sure to use the correct account titles in the details. Also balance and rule the account at the end of the month.

Beharry's Books

T. Mores — Receivable Account

Date	Details	$	Date	Details	$

[5 marks]

Question 2 (20 marks)

Amazona Company Ltd presented you with the following list of account balances which were extracted from the general ledger at the end of its financial year.

Amazona Company Ltd

Trial Balance (extract)

As at December 31, 2024

	S'000	S'000
Debentures — 10% interest per annum (2020 to 2025)		40 000
Debenture interest	200
Operational expenses	2 900
Auditor's fees	3 600
Directors' remuneration	45 000
Wages and salaries	20 100
Motor vehicles at cost	50 000
Provision for depreciation on vehicles		20 000
Issued share capital: ordinary shares of $1 each		50 000
Issued share capital: 8% preference shares of $2 each		10 000
Interim dividends paid: ordinary shares	2 000
Interim dividends paid: preference shares	500
General reserve		15 000
Retained earnings December 31, 2023		13 500
Rental income		1 500
Revenue		198 000
Cost of sales	89 300
Accounts payable		20 800
Accounts receivable	18 600
Cash at bank	3 100
Premises at cost	175 000

Additional information (in $'000) at December 31, 2024.

Auditor's fees were accrued, $5 000.
Wages and salaries were prepaid, $2 000.
Motor vehicles are to be depreciated at 12% per annum based on the straight line method.
The directors proposed final dividends be paid as follows.
- $3 000 to the ordinary shareholders
- preference shareholders be paid their outstanding dividend.
The directors also proposed $7 000 be transferred to general reserve.

[20 marks]

(a)

Use the form provided below to prepare the income statement for Amazona Company Ltd for the financial year ended December 31, 2024.

Amazona Company Ltd

Income Statement

For the Year Ended December 31, 2024

[11 marks]

(b)

Use the form provided below to prepare the appropriation account for Amazona Company Ltd for the year ended December 31, 2024.

[9 marks]

Question 4 (20 marks)

Simon is an entrepreneur who deposited the sum of $65 000 in a 5-year investment plan with Financial Investment Company Ltd. At the maturity date, Simon is to receive the original amount invested together with the annual interest for each of the five years.

Interest is calculated each year on the original amount deposited at the rates shown in the table below.

Year	Interest Rate Payable per Annum (%)
1	2.50
2	2.75
3	3.00
4	3.25
5	3.50

(a)

Calculate the average annual percentage rate which is payable over the 5-year period on the investment. Show all working clearly.

[3 marks]

(b)

Calculate the dollar amount of the total interest earned by Simon on the investment at the end of the 5-year period. Show all working clearly.

[4 marks]

(c)

Calculate the TOTAL amount payable to Simon upon maturity of the investment. Show all working clearly.

[3 marks]

(d)

Calculate Simon's return on investment (ROI) for the 5-year period. Show all working clearly.

[4 marks]

(e)

Explain to Simon the meaning of the ROI calculated in (d).

[2 marks]

(f)

Due to current economic conditions, the industry's average return on capital is 2% per annum, with all other factors remaining equal.

State whether Simon made a good decision when he invested the $65 000 with the Financial Investment Company Ltd. Use appropriate comparative figures to support your assessment.

[2 marks]

(g)

Complete the extract of the projected cash flow statement shown below with the investment's maturity payout amount to show Simon's TOTAL anticipated cash inflow in Year 5.