Free CXC Principles of Accounts Paper 3 May/June 2009 past paper from 2009. 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 3 May/June 2009 - Free CXC Past Paper with Answers
Free CXC Principles of Accounts Paper 3 May/June 2009 past paper from 2009. Includes a worked answer key. Open the PDF, take a timed test, and study with AI on Caribbean AI.
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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.
Identify ONE revenue expenditure that the business will incur if Lovell becomes a manager.
[1 mark]
Give ONE example of a capital expenditure that Sandra Walker might have undertaken when setting up her business.
[1 mark]
On December 31, 2008, Lovell and Sandra took an inventory from which they drew up the following stock record. All prices are an average of actual prices.
| Type of Good | Opening Inventory | Purchases | Sales |
|---|---|---|---|
| Fresh market goods | 20 kgs @ $3 per kg | 2000 kgs @ $5 per kg | 1990 kgs |
| Dried market goods | 13 kgs @ $4 per kg | 1450 kgs @ $7 per kg | 1403 kgs |
| Canned goods | 17 cases @ $26 per case | 470 cases @ $23 per case | 464 cases |
| Toiletries | 9 cases @ $14 per case |
| 121 cases @ $16 per case |
| 124 cases |
| Snacks and cereals | 12 boxes @ $12 per box | 78 boxes @ $11per box | 85 boxes |
| Meats | 5 kgs @ $8 per kg | 1109 kgs @ $12 per kg | 1109 kgs |
Lovell suggests that they use the FIFO method to calculate the total value of closing inventory as at December 31, 2008.
On the answer sheet provided, calculate the closing inventory.
[9 marks]
List ONE method of valuing inventory, other than FIFO.
[1 mark]
List ONE book of original entry and ONE ledger that Sandra can use to record transactions with her suppliers.
[2 marks]
Sandra usually pays an accountant to prepare her Income Statement and Balance Sheet and a report on how the business performed. She wants Lovell to prepare them this year. She provides Lovell with the following list showing values for the last year of operation.
| Accounts | December 31, 2008 |
|---|---|
| $ | |
| Accounts receivable | 3 760 |
| Accounts payable | 9 422 |
| Purchases | 47 110 |
| Sales | 75 295 |
| Returns of Purchases | 205 |
| Delivery van | 18 000 |
| Delivery van expenses | 330 |
| Discounts received | 108 |
| Drawings | 6 000 |
| Electricity bills | 360 |
| Telephone expense | 2 110 |
| Bank | 15 670 |
| 5% year Bank Loan | 10 000 |
| Opening Inventory | 360 |
| Land and water rates | 1 500 |
| Concrete shed, shelves and fittings | 30 000 |
| Capital: Sandra Walker | 31 670 |
Using the information provided, prepare the Trial Balance for the business as at December 31, 2008.
[7 marks]
Sandra adds the following information. (i) Three months ago she took a community course in business management. She heard about things like depreciation and providing for bad debts. (ii) The delivery van was bought on January 1, 2008 and will be used for five years before it is replaced. She will start providing for depreciation on the van in the current year. (iii) The concrete shed, shelves and fittings are three years old but they should last a long time. Depreciation will be provided for these. (iv) About one out of every ten persons who owe at the end of the year tends to become a bad debtor. Provision will be made for bad debts from this year. (v) The land and water rates paid to Town Hall are $1200 per year, and the interest on the bank loan has not been paid.
List ONE factor that Sandra should consider when determining the amount of depreciation that should be provided for every year.
[1 mark]
Using the list of balances and the additional information provided, prepare the Trading and Profit and Loss Account for this business.
[12 marks]
In his report for the year ended December 31, 2007, the accountant computed the following ratios:
| Gross profit percentage | 29.3% |
| Current ratio | 1.9:1 |
Calculate the following ratios for the business for the year ended December 31, 2008 showing clearly the formulae used: (a) Gross profit percentage (b) Current ratio
[4 marks]
Gross profit percentage
[2 marks]
Current ratio
[2 marks]
Using the ratios provided and your computations, make TWO comments about the performance of the business in 2008.
[2 marks]