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Mock Paper / Page 1 SKH Leung Kwai Yee Secondary School MOCK PAPER for First Term Examination 2009/10 F.5 Principles of Accounts 24.11.2009 8.15 am – 10.45 am (2.5 hours) This paper must be answered in English Instructions: 1. Answer FIVE questions: THREE from Section A (42%), and TWO from Section B (58%). 2. Write your answers on the answer book provided. 3. Show your workings. Setter: WHF ______________________________________________________________________________ Section A Answer any THREE questions from this section. Each question carries 14 marks. Write your answers on the answer sheets provided. Question 1 The trial balance of Wang Limited as at 31 March 2009 failed to agree and the difference was credited to a suspense account. Subsequent checks on the records revealed the following: (1) Carriage outwards of $1,205 had been recorded as carriage inwards. (2) The purchases journal had been overcast by $8,400. (3) A creditor for $3,020 had been paid twice. Both payments had been posted to the ledger. However, the refund of the overpayment was recorded as cash sale. (4) On 1 April 2008, a cash sale of furniture for $9,150 had been recorded as a cash sale of goods. No other entries in respect of this transaction had been made. The company had provided for depreciation at the rate of 20% on the cost of this furniture at 31 March 2009. The furniture cost $24,000 and had a provision for depreciation of $14,400 at 31 March 2008. (5) Returns outwards of $300 to Y. Lee had been recorded only in the personal account. (6) Bad debts written off amounting to $1,232 had been credited to the commission revenue account only. (7) Drawings of goods amounting to $4,235 had been completely omitted from the accounting records. You are required to prepare: (a) The necessary journal entries to correct the above errors. (Narrations not required) (10 marks) (b) The suspense account to ascertain the difference in the trial balance before corrections. (4 marks)
Transcript
Page 1: FIVE THREE TWO - skhlkyss.edu.hkskhlkyss.edu.hk/~whf/works/0910_F5_PA_MT_Mock.pdf · (v) An autopay for insurance of $6,000 shown in the bank statement had not been entered in the

Mock Paper / Page 1

SKH Leung Kwai Yee Secondary School

MOCK PAPER for First Term Examination 2009/10

F.5 Principles of Accounts 24.11.2009

8.15 am – 10.45 am (2.5 hours)

This paper must be answered in English

Instructions:

1. Answer FIVE questions: THREE from Section A (42%), and TWO from Section B (58%).

2. Write your answers on the answer book provided.

3. Show your workings.

Setter: WHF

______________________________________________________________________________

Section A

Answer any THREE questions from this section. Each question carries 14 marks. Write your

answers on the answer sheets provided.

Question 1 The trial balance of Wang Limited as at 31 March 2009 failed to agree and the difference was

credited to a suspense account.

Subsequent checks on the records revealed the following:

(1) Carriage outwards of $1,205 had been recorded as carriage inwards.

(2) The purchases journal had been overcast by $8,400.

(3) A creditor for $3,020 had been paid twice. Both payments had been posted to the ledger.

However, the refund of the overpayment was recorded as cash sale.

(4) On 1 April 2008, a cash sale of furniture for $9,150 had been recorded as a cash sale of

goods. No other entries in respect of this transaction had been made. The company had

provided for depreciation at the rate of 20% on the cost of this furniture at 31 March 2009.

The furniture cost $24,000 and had a provision for depreciation of $14,400 at 31 March

2008.

(5) Returns outwards of $300 to Y. Lee had been recorded only in the personal account.

(6) Bad debts written off amounting to $1,232 had been credited to the commission revenue

account only.

(7) Drawings of goods amounting to $4,235 had been completely omitted from the accounting

records.

You are required to prepare: (a) The necessary journal entries to correct the above errors. (Narrations not required)

(10 marks)

(b) The suspense account to ascertain the difference in the trial balance before corrections.

(4 marks)

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Mock Paper / Page 2

Question 2 (A) Richard owns a retail business and its financial year ends on 31 May. He was unable to

conduct a physical stocktaking on 31 May 2009, but he did carry this out on 8 June 2009.

The stock at 8 June 2009, valued at cost, amounted to $18,720. In establishing the selling

price of his goods, Richard adopts a mark up of 20% on the cost of the goods.

During the period from 1 June to 8 June 2009, the following transactions took place.

$

Purchase of goods for resale 7,510

Sales of goods 6,240

Goods returned by customers 480

Goods taken by Richard for his personal use, at cost price 70

Goods returned to suppliers 80

Included in the valuation of $18,720 were the following items:

(i) Goods which had cost $300 but on 31 May their saleable value was $230.

(ii) Goods at their cost valuation but which were sold for $600 on 20 May. These goods

remained in Richard’s warehouse on 8 June, awaiting collection by the customer.

(iii) Goods sent by suppliers on sale or return basis for $180. By 8 June, Richard had not

decided whether to retain or returns the goods.

Required: Prepare a statement to calculate the value of stock as at 31 May 2008. (8 marks)

(B) The cash book of Mr Chu’s company showed a debit balance of cash at bank of $186,400 at

31 December 2008. On investigation, the followings were discovered:

(i) A cheque for $7,800 received from a customer had been recorded twice in the cash

book.

(ii) A cheque for $8,800 payable to a landlord for December 2008 office rental, had not

yet presented to the bank for payment.

(iii) A cheque for $19,000 received from a customer had been entered in the cash book on

22 December 2008. It was subsequently dishonoured and returned by the bank, but this

was not recorded in the cash book.

(iv) A lodgement of $36,680 had not yet been credited by the bank.

(v) An autopay for insurance of $6,000 shown in the bank statement had not been entered

in the cash book.

You are required to: Prepare a bank reconciliation statement as at 31 December 2008 commencing with the

balances as per cash book and ending with the balance as per bank statement. (6 marks)

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Mock Paper / Page 3

Question 3

The treasurer of Tak Sun Club has prepared the following receipts and payments account for the

year ended 31 March 2009.

Receipts and Payments account

$ $

Bal b/f 1,800 Bar creditors 26,800

Subscriptions 32,000 Tennis course – coach fee 4,500

Bar debtors 42,000 Bar expenses 1,600

Tennis course 6,000 Electricity 4,300

Sales of office equipment 15,000 Rent and rates 18,500

Bal c/f 31,600 Bar wages 8,200

Office equipment purchased 40,000

Salaries 24,500

128,400 128,400

Additional information:

(i) Some of the club’s balances as at 31 March are as follows:

2008 2009

$ $

Bar stock 1,750 1,650

Rent prepaid 1,150 960

Subscriptions in arrear 3,000 2,500

Subscriptions in advance 1,300 1,100

Electricity owing 600 450

Bar debtors 5,800 6,150

Bar creditors 3,600 3,800

Office equipment at cost 110,000 ?

Provision for depreciation – Office equipment 44,000 ?

(ii) 10% of the rent and rates were to be allocated to bar.

(iii) Office equipment which had been sold on 1 April 2008 had a cost of $60,000 and a net

book value of $36,000. Additional office equipment were purchased on 1 October 2008.

(iv) It is club’s policy to depreciate office equipment at 25% per annum using reducing

balance method.

(v) Subscriptions of $500 from two members had long been outstanding, and therefore the

club wrote off this amount in the current year.

Required: (a) Prepare the bar trading account for the year ended 31 March 2009. (6 marks)

(b) Prepare the income and expenditure account for the year ended 31 March 2009. (8 marks)

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Mock Paper / Page 4

Question 4 Danny Fung is a wholesaler of carpets. On 1 January 2009, he had the following balances in his

books:

$

Accounts receivable 42,000

Bank 69,300

Inventory 84,600

Accounts payable 79,110

All purchases and sales were made on credit. During the three months to 31 March 2009, Danny

made a gross profit of 25% on all sales. The business banked all receipts from accounts receivable

amounting to $995,000 and paid the following out of the business bank account:

$

Operating expenses 160,400

Accounts payable ?

On 31 March 2009, there was a burglar in the shop and all the inventory was stolen. It was also

discovered that the cashier had misappropriated cash from the business bank account amounting

to $10,000.

In order to ascertain the amount of the inventory loss, Danny identified the following balances on

the same day:

$

Accounts receivable 73,500

Bank 55,650

Accounts payable 88,900

You are required to: (a) Calculate the amount of sales for the three months to 31 March 2009. (3 marks)

(b) Draw up the bank account for the period. (5 marks)

(c) Calculate the amount of inventory stolen. (6 marks)

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Mock Paper / Page 5

Section B

Answer any TWO questions from this section. Each question carries 29 marks. Write your

answers on the answer sheets provided.

Question 5 The following trial balance was extracted from the books of Lee Leung Manufacturing Company

as at 31 December 2008:

$ $

Sales 2,886,000

Stock as at 1 January 2008

Raw materials 121,520

Work in progress 50,850

Finished goods 163,750

Trade debtors and trade creditors 238,000 108,900

Capital 959,540

Machinery, at cost 1,025,000

Office furniture and fittings, at cost 150,000

Accumulated depreciation, 1 January 2008

Machinery 398,000

Office furniture and fittings 63,700

Wages and salaries 586,340

Rent and rates (factory 2/3; office 1/3) 297,600

Purchase of raw materials 1,236,000

Administrative expenses 210,520

Selling and distribution expenses 109,020

Carriage inwards 22,430

Provision for doubtful debts, 1 January 2008 7,100

8% loan (borrowed in 2007) 240,000

Loan interest 10,000

Cash at Bank 499,210

Suspense 57,000

4,720,240 4,720,240

Additional information:

(i) Stock at 31 December 2008:

$

Raw materials 140,000

Work in progress 47,100

Finished goods 148,510

(ii) It is the policy of the company to provide depreciation on pro-rata basis as follows:

Machinery 20% on cost

Office furniture and fittings 20% on net book value

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Mock Paper / Page 6

(iii) Analysis of wages and salaries revealed:

$

Direct labour 198,590

Indirect labour 78,000

Salaries to factory supervisor 120,000

Salaries to office staff 189,750

586,340

(iv) The following adjustments were to be made on 31 December 2008:

$

Accrued administrative expenses 5,000

Prepaid selling and distribution expenses 3,000

(v) Provision for doubtful debts was to be maintained at 5% of trade debtors.

(vi) On 1 July 2008, an obsolete machinery costing $100,000 bought on 30 June 2006 was

sold. The proceeds received had been debited in the bank account and credited in the

suspense account. No other entries have been made in the books for this transaction.

(vii) $120,000 of the 8% loan had been repaid on 31 August 2008 and another $120,000 is to

be repaid on 31 August 2009. The remaining amount is repayable on 31 August 2010.

Required: (a) Prepare the manufacturing account for the year ended 31 December 2008, showing clearly

the cost of raw materials consumed, the prime cost and the production cost of finished goods.

(8.5 marks)

(b) Prepare the trading, profit and loss account for the year ended 31 December 2008.

(9.5 marks)

(c) Prepare the balance sheet as at 31 December 2008. (11 marks)

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Mock Paper / Page 7

Question 6 Cheung and Wong were partners sharing profits and losses in the ratio of 1:3 respectively. At the

end of each year each partner is allowed to have interest of 5% basing on the balance of capital

accounts at the start of the year. Cheung is also entitled to a salary of $60,000 per annum. The

following trial balance as at 31 December 2008 was extracted from the books of the partnership:

$ $

Capital accounts

Cheung 820,000

Wong 800,000

Current accounts:

Cheung 1,000

Wong 25,000

Premises 1,080,000

Vehicles 504,000

Furniture 144,000

Stock as at 1 January 2008 223,347

Trade receivables 304,000

Bank 732,880

8% Loan from Cheung 360,000

Trade payables 260,227

Sales 3,400,000

Purchases 2,310,000

Wages and salaries 120,000

Selling expenses 147,000

Administrative expenses 99,000

5,665,227 5,665,227

The following information relating to the year ended 31 December 2008 should be considered as

necessary:

(i) Stock as at 31 December 2008 amounted to $272,379.

(ii) Loan interest has not been paid nor accrued for the year.

(iii) Depreciation is to be provided at 20% on the net book value of vehicles and furniture.

At 1 January 2009, Cheung retired and Ho was admitted to the partnership with Wong. The

following details were agreed on:

(iv) The following assets were to be revalued at:

$

Premises 1,480,000

Vehicles 380,000

Inventories 212,379

Other assets remained at its book value.

(v) Wong and Ho were to share profits and losses equally.

(vi) The goodwill of the old partnership was estimated to be worth $200,000, but no goodwill

account was to be maintained.

(vii) Cheung was to take over a vehicle valued at $128,000. The balance owing to him was to be

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Mock Paper / Page 8

retained as a loan to the new partnership, except for $445,000 which was to be settled in

cash.

(viii) Wong was to withdraw cash so that his fixed capital balance would be maintained at

$800,000.

(ix) Ho was to introduce $650,000 cash as capital, but no extra cash was to be paid in for his

share of goodwill.

Required: (a) the partnership profit and loss appropriation account for the year ended 31 December 2008;

(8 marks)

(b) revaluation account of the partnership; (3 marks)

(c) the partners’ capital and current accounts in columnar form; and (10 marks)

(d) a balance sheet for the new partnership as at 1 January 2009. (8 marks)

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Mock Paper / Page 9

Question 7 Yvonne, Elsa and Sandy were partners, sharing profits and losses in the ratios of 2:1:2

respectively. The balance sheet as at 31 March 2009 was as follows:

$ $ $

Fixed Assets

Plant and machinery 255,000

Furniture 64,800

Motor vehicles 19,000

338,800

Goodwill 150,000

Current Assets

Stock 146,540

Debtors 81,600

1,640 79,960

Prepaid rent 2,000

Bank 102,740

331,240

Less: Current Liabilities

Loan from Sandy 80,000

Creditors 65,400 145,400

Net Current Assets 185,840

674,640

Capital - Yvonne 100,000

- Elsa 200,000

- Sandy 300,000 600,000

Current - Yvonne (500)

- Elsa 31,500

- Sandy 43,640 74,640

674,640

On 1 April 2009, the partnership was dissolved on the following terms:

(i) Elsa was to take over all the furniture at 80% of the book value. The motor vehicles were

taken over by Yvonne and Sandy at agreed values of $6,500 and $9,800. They were not

required to pay cash into the partnership in taking over the assets.

(ii) The partnership appointed a debt-collecting agency to collect all the debts due to the firm.

The company was entitled to a commission of 5% on the amount collected. Except for

$2,500, all the debts were collected.

(iii) Plant and machinery were sold at $188,000.

(iv) Goodwill was to be written off.

(v) Only 40% of the prepaid rent was refunded successfully.

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Mock Paper / Page 10

(vi) Yvonne settled all the creditors out of her own savings. A discount of 5% was given by

the creditors to the firm.

(vii) Dissolution expenses amounted to $15,800.

(viii) Sandy took over the stock to offset her loan to the partnership.

(ix) Since Yvonne was insolvent, his deficiency was to be borne by the other partners.

Required: (a) Prepare the realization account. (14 marks)

(b) Prepare the bank account; and (5 marks)

(c) Prepare the partners’ capital accounts in columnar form, including the final settlement

among them. (10 marks)

END OF PAPER

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Mock Paper / Page 11

SKH Leung Kwai Yee Secondary School

MOCK PAPER for

First Term Examination 2009/10

F.5 Principles of Accounts

Suggested Answers:

Question 1 (a)

Journal

Dr Cr

$ $

(1) Carriage outwards 1,205 0.5

Carriage inwards 1,205 0.5

(2) Suspense 8,400 0.5

Purchases 8,400 0.5

(3) Sales 3,020 0.5

Creditor 3,020 0.5

(4) Sales 9,150 0.5

Provision for depreciation 14,400 0.5

Loss on disposal 450 0.5

Furniture 24,000 0.5

Provision for depreciation 4,800 0.5

Profit and loss 4,800 0.5

(5) Suspense 300 0.5

Returns outwards 300 0.5

(6) Commission revenue 1,232 0.5

Bad debts 1,232 0.5

Debtors 1,232 0.5

Suspense 1,232 0.5

(7) Drawings 4,235 0.5

Purchases 4,235 0.5

(b)

Suspense

$ $

Purchases (2) 8,400 1 Bal b/f 7,468 1 Returns outwards (5) 300 1 Commission revenue (6) 1,232 1

8,700 8,700

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Mock Paper / Page 12

Question 2 (A)

Richard

Statement to calculate the value of stock as at 31 May 2009

$ $

Stock at 8 June 2009 18,720 0.5 Add Sales of goods (6,240 � 1.2) 5,200 1 Drawings 70 0.5 Goods returned to suppliers 80 5,350 0.5

24,070 Less Purchases of goods for resale 7,510 0.5 Goods returned by customers (480 � 1.2) 400 1 Goods written down to saleable value (300 – 230) 70 1 Goods awaiting collection by customer (600 � 1.2) 500 1 Goods received on sale or return basis 180 8,660 1

Stock at 31 May 2009 15,410 1

(B)

Bank reconciliation Statement as at 31 December 2008

$ $

Balance as per cash book 186,400 0.5 Add: (ii) Unpresented cheques 8,800 1

195,200 Less: (i) Cheque entered twice 7,800 1 (iii) Dishonoured cheque 19,000 1 (iv) Uncredited deposits 36,680 (v) Autopay for incurance 6,000 69,480 1

Balance as per bank statement 125,720 0.5

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Mock Paper / Page 13

Question 3

(a) Tak Sun Club

Bar Trading Account for the year ended 31 March 2009

$ $

Sales (42,000 – 5,800 + 6,150) 42,350 1 Less: Cost of goods sold Opening stock 1,750 0.5 Add: Purchases (26,800 – 3,600 + 3,800) 27,000 1

28,750 Less: Closing stock 1,650 27,100 0.5

Gross Profit 15,250 0.5 Less: Bar expenses 1,600 0.5 Bar wages 8,200 0.5

Rent and rates (18,500 + 1,150 – 960) � 10% 1,869 11,669 1

Bar trading profit 3,581 0.5

(b)

Tak Sun Club

Income and expenditure Account for the year ended 31 March 2009

$ $

Income

Bar profit 3,581 0.5 Subscriptions (32,000 – 3,000 + 2,500 + 1,300 – 1,100 + 500) 32,200 1.5 Profit from tennis course (6,000 – 4,500) 1,500 0.5

37,281 Expenditure Bad debts 500 Electricity (4,300 – 600 + 450) 4,150 1

Rent and rates (18,500 + 1,150 – 960) � 90% 16,821 1 Salaries 24,500 0.5 Loss on disposal – Office equipment (36,000 – 15,000) 21,000 0.5 Depreciation – Office equipment

[(111,000 – 44,000 – 36,000) � 25% + 40,000 � 25% � 6/12]

12,500 (79,471) 2

Deficit of expenditure over income (42,190) 0.5

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Mock Paper / Page 14

Question 4 (a)

Trade debtors

$ $

Bal b/f 42,000 0.5 Bank 995,000 1 Sales (Bal. fig.) 1,026,500 1 Bal c/f 73,500 0.5

1,068,500 1,068,500

(b)

Bank

$ $

Bal b/f 69,300 0.5 Operating expenses 160,400 1 Trade debtors 995,000 1 Trade creditors (Bal. fig.) 838,250 1 Cash misappropriated 10,000 1 Bal c/f 55,650 0.5

1,064,300 1,064,300

(c)

Trading account for 3 months ended 31 March 2009

$ $

Sales 1,026,500 0.5 Less: Cost of sales Opening stock 84,600 0.5 Purchases (Workings) 848,050

932,650 Less: Closing stock 0 0.5

932,650 Less: Stock loss (Bal. fig.) 162,775 769,875 1

Gross profit ($1,026,500 � 25%) 256,625 1

Workings:

Trade Creditors

$ $

Bank 838,250 0.5 Bal b/f 79,110 0.5 Bal c/f 88,900 0.5 Purchases (Bal. fig.) 848,040 1

927,150 927,150

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Mock Paper / Page 15

Question 5 (a)

Lee Leung Manufacturing Company

Manufacturing account for the year ended 31 December 2008

$ $ $ Raw materials consumed Opening stock 121,520 0.5 Add Purchase 1,236,000 0.5 Carriage inwards 22,430 1,258,430 0.5

1,379,950 Less Closing stock 140,000 1,239,950 0.5

Direct wages 198,590 0.5

Prime cost 1,438,540 0.5 Factory overhead

Depreciation – machinery [(1,025,000 – 100,000) �

20% + 100,000 � 20% � 1/2]

195,000 1.5

Indirect labour 78,000 0.5 Salaries to factory supervisor 120,000 0.5

Rent and rates (297,600 � 2/3) 198,400 0.5

Loss on disposal of machinery ($100,000 � 3/5 –

57,000)

3,000 594,400 1

2,032,940 Add: Work-in-progress as at 1.1.2008 50,850 0.5

2,083,790

Less: Work-in-progress as at 31.12.2008 47,100 0.5

Production cost of goods completed 2,036,690 0.5 (b)

Lee Leung Manufacturing Company

Trading and profit and loss account for the year ended 31 December 2008

$ $ Sales 2,886,000 0.5 Less: Cost of goods sold Opening stock 163,750 0.5 Add: Production cost of goods completed 2,036,690 0.5

2,200,440 Less: Closing stock 148,510 2,051,930 0.5

Gross profit 834,070 0.5 Less: Expenses

Depreciation expenses [$(150,000 – 63,700) �

20%]

17,260 1

Salaries to office staff 189,750 0.5

Rent and rates (297,600 � 1/3) 99,200 0.5

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Mock Paper / Page 16

Administrative expenses (210,520 + 5,000) 215,520 1 Selling and distribution expenses (109,020 –

3,000)

106,020 1

Increase in provision for doubtful debts

(238,000 � 5% – 7,100)

4,800 1

Loan interest (240,000 � 8% + 120,000 � 8% �

8/12)

25,600 658,150 1.5

Net profit 175,920 0.5

(c) Lee Leung Manufacturing Company

Balance sheet as at 31 December 2008

Cost Acc Dep NBV Fixed assets $ $ $ Machinery 925,000 553,000 372,000 2 Office furniture and fittings 150,000 80,960 69,040 1

441,040

Current assets Stock Raw materials 140,000 0.5 Work in progress 47,100 0.5 Finished goods 148,510 0.5 Debtors 238,000 0.5 Less: Provision for doubtful debts 11,900 226,100 0.5

Prepayments 3,000 0.5 Cash at bank 499,210 0.5

1,063,920 Less: Current Liabilities Creditors 108,900 0.5 Accruals [(25,600 – 10,000) + 5,000] 20,600 1 8% loan (repayable in 2009) 120,000 249,500 1

Net current assets 814,420 Less: Long term Liabilities 8% loan (repayable in 2010) 120,000 1

1,135,460

Financed by: Capital 959,540 0.5 Add: Net profit 175,920 0.5

1,135,460

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Mock Paper / Page 17

Question 6 (a)

Cheung and Wong

Trading and Profit and Loss and Appropriation Account for the year ended 31 December 2008

$ $

Sales 3,400,000 0.5 Less: Cost of sales Opening stock 223,347 0.5 Add: Purchases 2,310,000 0.5

2,533,347 Less: Closing stock 272,379 2,260,968 0.5

Gross profit 1,139,032 0.5 Less: Wages and salaries 120,000 0.5 Selling expenses 147,000 0.5 Administrative expenses 99,000 0.5

Loan interest ($360,000 � 8%) 28,800 0.5

Depreciation on fixed assets ($648,000 � 20%) 129,600 524,400 0.5

Net profit 614,632 0.5 Less: Appropriations Salary – Cheung 60,000 0.5 Interest on capital

– Cheung ($820,000 � 5%) 41,000 0.5

– Wong ($800,000 � 5%) 40,000 141,000 0.5

Residual profit 473,632 Share of profit – Cheung (1/4) 118,408 0.5 – Wong (3/4) 355,224 0.5

473,632

(b)

Revaluation

$ $

Motor vehicles ($504,000 �

0.8 – 380,000)

23,200 1 Premises 400,000 0.5

Inventories 60,000 0.5

Profit on revaluation

Cheung (1/4) 79,200 0.5

Wong (3/4) 237,600 0.5

400,000 400,000

Page 18: FIVE THREE TWO - skhlkyss.edu.hkskhlkyss.edu.hk/~whf/works/0910_F5_PA_MT_Mock.pdf · (v) An autopay for insurance of $6,000 shown in the bank statement had not been entered in the

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(c)

Capital

Cheung Wong Ho Cheung Wong Ho

$ $ $ $ $ $

Goodwill

write off

100,000 100,000 0.5 Bal b/f 820,000 800,000 0.5

Motor

vehicles

take over

128,000 0.5 Profit on

revaluation

79,200 237,600 0.5

Bank 445,000 287,600 1 Goodwill 50,000 150,000 1 Loan 594,608 0.5 Bank 650,000 0.5 Bal c/f 800,000 550,000 1 Current 218,408 0.5

1,167,608 1,187,600 650,000 1,167,608 1,187,600 650,000

Current

Cheung Wong Ho Cheung Wong Ho

$ $ $ $ $ $

Bal b/f 1,000 0.5 Bal b/f 25,000 0.5 Capital 218,408 0.5 Salary 60,000 0.5 Bal c/f 420,224 0.5 Interest on

capital

41,000 40,000 0.5

Share of

profit

118,408 355,224 0.5

219,408 420,224 219,408 420,224

(d)

Wong, Chow and Lee

Balance Sheet as at 31 December 2008

$ $ $

Fixed Assets

Premises 1,480,000 0.5 Vehicles ($380,000 – 128,000) 252,000 1

Furniture ($144,000 � 80%) 115,200 1

1,847,200 Current assets Stock 212,379 0.5 Debtors 304,000 0.5 Bank ($732,880 + 650,000 – 445,000 – 287,600) 650,280 1.5

1,166,659 Less: Current Liabilities Creditors 260,227 0.5 Accruals 28,800 289,027 877,632 0.5

2,724,832

Page 19: FIVE THREE TWO - skhlkyss.edu.hkskhlkyss.edu.hk/~whf/works/0910_F5_PA_MT_Mock.pdf · (v) An autopay for insurance of $6,000 shown in the bank statement had not been entered in the

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Less: Long-term Liabilities Loan from Cheung ($360,000 + 594,608) 954,608 1

1,770,224

Financed by Capital – Wong 800,000 – Ho 550,000 1,350,000 0.5

Current – Wong 420,224 0.5

1,770,224

Page 20: FIVE THREE TWO - skhlkyss.edu.hkskhlkyss.edu.hk/~whf/works/0910_F5_PA_MT_Mock.pdf · (v) An autopay for insurance of $6,000 shown in the bank statement had not been entered in the

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Question 7

(a) Realization

$ $

Plant and machinery 255,000 0.5 Capital – Elsa (64,800 � 80%) 51,840 1

Furniture 64,800 0.5 Capital – Yvonne 6,500 0.5

Motor vehicles 19,000 0.5 Capital – Sandy 9,800 0.5

Goodwill 150,000 0.5 Bank – Plant and machinery 188,000 0.5

Stock 146,540 0.5 Loan from Sandy 80,000 1

Debtors 79,960 0.5 Bank – Debts collected

(81,600 – 2,500)

79,100 1

Prepaid rent 2,000 0.5 Bank – Prepaid rent refunded 800 1

Commission (79,100 � 5%) 3,955 0.5 Discounts received

(65,400 � 5%)

3,270 1

Dissolution expenses 15,800 0.5 Loss on realization:

Yvonne (2/5) 127,098 1 Elsa (1/5) 63,549 1 Sandy (2/5) 127,098 1

737,055 737,055

(b) Bank

$ $

Bal b/f 102,740 0.5 Commission 3,955 0.5 Proceed of Plant and Machinery 188,000 1 Dissolution expenses 15,800 0.5 Debts collected 79,100 0.5 Capital – Elsa 164,602 0.5 Prepaid rent refunded 800 1 Capital – Sandy 186,283 0.5

370,640 370,640

(c) Capital

Yvonne Elsa Sandy Yvonne Elsa Sandy

$ $ $ $ $ $

Current 500 0.5 Bal b/f 100,000 200,000 300,000 0.5 Loss on

realization

127,098 63,549 127,098 1.5 Current 31,500 43,640 1

Furniture

take over

51,840 0.5 Creditors 62,130 1

Motor

vehicles

take over

6,500 9,800 1 Capital –

Elsa

13,639 1

Capital –

Yvonne

13,639 20,459 1 Capital –

Sandy

20,459 1

Bank 164,602 186,283 1

134,098 293,630 343,640 134,098 293,630 343,640

Page 21: FIVE THREE TWO - skhlkyss.edu.hkskhlkyss.edu.hk/~whf/works/0910_F5_PA_MT_Mock.pdf · (v) An autopay for insurance of $6,000 shown in the bank statement had not been entered in the

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