0452 ACCOUNTING - maxpapersmaxpapers.com/wp-content/uploads/2012/11/0452_w15_ms_all.pdf · + 1 for IAS terminology ... Suspense account 2015 $ 2015 $ ... 2 Bank account 2 000 (1)

® IGCSE is the registered trademark of Cambridge International Examinations.

CAMBRIDGE INTERNATIONAL EXAMINATIONS

Cambridge International General Certificate of Secondary Education

MARK SCHEME for the October/November 2015 series

0452 ACCOUNTING

0452/11 Paper 1, maximum raw mark 120

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge will not enter into discussions about these mark schemes. Cambridge is publishing the mark schemes for the October/November 2015 series for most Cambridge IGCSE

®, Cambridge International A and AS Level components and some

Cambridge O Level components.

Page 2 Mark Scheme Syllabus Paper

Cambridge IGCSE – October/November 2015 0452 11

© Cambridge International Examinations 2015

1 (a) B (b) A (c) D (d) D (e) B (f) A (g) C (h) B (i) A (j) C (1) each

[10]




2 (a) The book where transactions (and other entries) are first recorded. (1) [1]

(b) Cash book/petty cash book/sales journal/sales returns journal/purchases journal/purchases returns journal/general journal/returns inwards and returns outwards journals

Any two for (1) mark each [2]

(c)

asset liability expense

fixtures and fittings �

insurance �

bank overdraft �

cash �

trade payable �

wages �

accrued electricity �

Increase in provision for doubtful debts

�

Unpaid commission receivable

�

(1) Mark for every two correct [4]

(d) Statement of financial position (1) [1]

Income statement (1) [1]




(e)

Debit entry Credit entry

$ $

1 Bank account 8 000 Capital account 8 000

2 Bank account 2 000 (1) Loan account 2 000 (1)

3 (Delivery) Van account/ Motor vehicles account

5 200 (1) A1 Motors account

5 200 (1)

4 Purchases account 3 700 (1) Bank account 3 700 (1)

5 Rent account 1 000 (1) Bank account 1 000 (1)

6 Petty cash/Cash 100 (1) Bank account 100 (1)

[10] (f)

$ $

8 000

2 000 10 000 (1)

3 700

1 000

100 (4 800) (1)

5 200 (1)of

[3] [Total: 22]




3 (a) Raw materials (1) work in progress (1) finished goods/purchased finished goods (1) [3] (b) Lower of cost and net realisable value (1) [1] (c)

Account debited Account credited

Drawings (1) Purchases (1)

[2] (d) Business entity (1) [1] (e) To check for errors and omissions in his books of account

To check the errors in the bank statement To identify stale cheques To identify unpresented cheques To identify amounts not credited To calculate the correct bank balance in his cash book To verify the balance in his cash book To correct/amend his cash book

Any one for (1) mark [1] (f) A copy of the customer’s account as it appears in the books of the bank (1) [1] (g) An item in the cash book not in the bank statement Unpresented cheque/uncredited deposit/book-keeper error Any one for (1) mark An item in the bank statement not in the cash book. Bank charges/bank interest/dishonoured cheque/standing order/credit transfer/direct

debit/bank error/dishonoured cheque Any one for (1) mark [2] [Total: 11]




4 (a) An estimate (1) of the amount which will be lost (1) when debts go bad (1) which reduces the value of trade receivables (1) Max 2 [2]

(b)

Samuel Provision for doubtful debts account

2015 $ 2014 $

30 April Income statement

70 (1of) 1 May Balance b/d 450 (1)

Balance c/d 380 (1)

450 450

2015 1 May

Balance b/d

380

(1of)

+(1) for dates

[5] (c) Below/after gross profit/after trading account/(on credit side) as other income. Profit and loss section/(debit side) as an expense [1of] (d) Accruals/matching (1) Prudence (1) [2] (e) Trade receivables (1) Capital/profit (1) [2] [Total: 12]




5 (a)

$

Trade receivables 700 }

Trade payables (400) }(1)

Inventory 1 100 (1)

Equipment at cost 15 700 }

Provision for depreciation of equipment (4 100) } (1)

Prepaid rent 250 (1)

Bank 2 100 (1)

Capital 15 350 (1of)

[6] (b)

Nzita Total trade receivables account

2014 $ 2015 $

Feb 1 Balance b/d 700 (1) Jan 31 Bank/Cash 28 900 (1)

2015 Jan 31

Sales 29 100

(1of)

Balance c/d 900

29 800 29 800

2015 Feb 1

Balance b/d 900

(1of)

Nzita Total trade payables account

2015 $ 2014 $

Jan 31 Bank/Cash 12 600 (1) Feb 1 Balance b/d 400 (1)

Balance c/d 650 2015 Jan 31

Purchases 12 850

(1of)

13 250 13 250

2015 Feb 1

Balance b/d 650

(1of)

[8]




(c)

Nzita Income Statement for the year ended 31 January 2015

$ $

Sales/Revenue 29 100 (1of)

Inventory 1 Feb 2014 1 100

Purchases 12 850 (1of)

13 950

Inventory 31 January 2015 1 400 (1 for both)

Cost of sales 12 550

Gross profit 16 550 (1of)

Rent 3100 (1) + (250–150) (1) 3 200

Wages 5 200

Sundry expenses 2 650

Depreciation of equipment 1 680 (1)

12 730

Profit for the year + 1 for IAS terminology

3 820 (1of)

[9] (d)

Nzita Statement of Financial Position (extract) at 31 January 2015

$

Capital at 1 Feb 2014 15 350 (1of)

Profit for the year 3 820 (1of)

19 170

Drawings 6 600 (1)

Capital at 31 January 2015 12 570 (1of)

[4]




(e) 16 550/29 100 (1of) × 100 = 56.87% (1of) [2] (f) Lower selling prices Introduction of trade discount Sales promotions Higher purchases prices not passed on to customers Change in mix of goods sold Higher cost of sales Any two (1of) each [2] [Total: 31]




6 (a) Capital (1) Revenue (1) Current (1) Non-current (1) Understated (1) Overstated (1) [6] (b)

Error 2 (1) Error of commission (1)

Error 4 (1) Error of principle (1)

[4] (c)

Error Debit $

Credit $

1 Discount allowed Discount received Suspense Correction of misposting of discounts (1)

30 (1)30 (1)

60 (1)

2 Joanie Yolanda Correction of misposting of receipt of cash (1)

85 (1)85 (1)

3 Sales returns Suspense Correction of misposting of sales returns journal total (1)

10 (1)10 (1)

4 Stationery Office equipment Correction of revenue expenditure treated as capital expenditure (1)

150 (1)150 (1)

[13]




(d) Leroy Suspense account

2015 $ 2015 $

Sept 30 Balance b/d 70 (1of) Sept 30 Discount allowed and received

60 (1of)

Sales returns 10 (1of)

70 70

[3] (e)

No effect Increase $

Decrease $ $

Draft profit 5 170

Error 1 60 (2)

Error 2 � (1)

Error 3 10 (2)

Error 4 150 (2)

Corrected profit

4 950(1)OF

Marks with figures: 1 for figure, 1 for direction [8] [Total: 34]





0452 ACCOUNTING








1 (a) B (b) A (c) D (d) D (e) B (f) A (g) C (h) B (i) A (j) C (1) each

[10]




2 (a) The book where transactions (and other entries) are first recorded. (1) [1]

(b) Cash book/petty cash book/sales journal/sales returns journal/purchases journal/purchases returns journal/general journal/returns inwards and returns outwards journals

Any two for (1) mark each [2]

(c)

asset liability expense

fixtures and fittings �

insurance �

bank overdraft �

cash �

trade payable �

wages �

accrued electricity �

Increase in provision for doubtful debts

�

Unpaid commission receivable

�

(1) Mark for every two correct [4]

(d) Statement of financial position (1) [1]

Income statement (1) [1]




(e)

Debit entry Credit entry

$ $

1 Bank account 8 000 Capital account 8 000

2 Bank account 2 000 (1) Loan account 2 000 (1)

3 (Delivery) Van account/ Motor vehicles account

5 200 (1) A1 Motors account

5 200 (1)

4 Purchases account 3 700 (1) Bank account 3 700 (1)

5 Rent account 1 000 (1) Bank account 1 000 (1)

6 Petty cash/Cash 100 (1) Bank account 100 (1)

[10] (f)

$ $

8 000

2 000 10 000 (1)

3 700

1 000

100 (4 800) (1)

5 200 (1)of

[3] [Total: 22]




3 (a) Raw materials (1) work in progress (1) finished goods/purchased finished goods (1) [3] (b) Lower of cost and net realisable value (1) [1] (c)


Drawings (1) Purchases (1)

[2] (d) Business entity (1) [1] (e) To check for errors and omissions in his books of account

To check the errors in the bank statement To identify stale cheques To identify unpresented cheques To identify amounts not credited To calculate the correct bank balance in his cash book To verify the balance in his cash book To correct/amend his cash book

Any one for (1) mark [1] (f) A copy of the customer’s account as it appears in the books of the bank (1) [1] (g) An item in the cash book not in the bank statement Unpresented cheque/uncredited deposit/book-keeper error Any one for (1) mark An item in the bank statement not in the cash book. Bank charges/bank interest/dishonoured cheque/standing order/credit transfer/direct

debit/bank error/dishonoured cheque Any one for (1) mark [2] [Total: 11]




4 (a) An estimate (1) of the amount which will be lost (1) when debts go bad (1) which reduces the value of trade receivables (1) Max 2 [2]

(b)

Samuel Provision for doubtful debts account

2015 $ 2014 $

30 April Income statement

70 (1of) 1 May Balance b/d 450 (1)

Balance c/d 380 (1)

450 450

2015 1 May

Balance b/d

380

(1of)

+(1) for dates

[5] (c) Below/after gross profit/after trading account/(on credit side) as other income. Profit and loss section/(debit side) as an expense [1of] (d) Accruals/matching (1) Prudence (1) [2] (e) Trade receivables (1) Capital/profit (1) [2] [Total: 12]




5 (a)

$

Trade receivables 700 }

Trade payables (400) }(1)

Inventory 1 100 (1)

Equipment at cost 15 700 }

Provision for depreciation of equipment (4 100) } (1)

Prepaid rent 250 (1)

Bank 2 100 (1)

Capital 15 350 (1of)

[6] (b)

Nzita Total trade receivables account

2014 $ 2015 $

Feb 1 Balance b/d 700 (1) Jan 31 Bank/Cash 28 900 (1)

2015 Jan 31

Sales 29 100

(1of)

Balance c/d 900

29 800 29 800

2015 Feb 1

Balance b/d 900

(1of)

Nzita Total trade payables account

2015 $ 2014 $

Jan 31 Bank/Cash 12 600 (1) Feb 1 Balance b/d 400 (1)

Balance c/d 650 2015 Jan 31

Purchases 12 850

(1of)

13 250 13 250

2015 Feb 1

Balance b/d 650

(1of)

[8]




(c)

Nzita Income Statement for the year ended 31 January 2015

$ $

Sales/Revenue 29 100 (1of)

Inventory 1 Feb 2014 1 100

Purchases 12 850 (1of)

13 950

Inventory 31 January 2015 1 400 (1 for both)

Cost of sales 12 550

Gross profit 16 550 (1of)

Rent 3100 (1) + (250–150) (1) 3 200

Wages 5 200

Sundry expenses 2 650

Depreciation of equipment 1 680 (1)

12 730

Profit for the year + 1 for IAS terminology

3 820 (1of)

[9] (d)

Nzita Statement of Financial Position (extract) at 31 January 2015

$

Capital at 1 Feb 2014 15 350 (1of)

Profit for the year 3 820 (1of)

19 170

Drawings 6 600 (1)

Capital at 31 January 2015 12 570 (1of)

[4]




(e) 16 550/29 100 (1of) × 100 = 56.87% (1of) [2] (f) Lower selling prices Introduction of trade discount Sales promotions Higher purchases prices not passed on to customers Change in mix of goods sold Higher cost of sales Any two (1of) each [2] [Total: 31]




6 (a) Capital (1) Revenue (1) Current (1) Non-current (1) Understated (1) Overstated (1) [6] (b)

Error 2 (1) Error of commission (1)

Error 4 (1) Error of principle (1)

[4] (c)

Error Debit $

Credit $

1 Discount allowed Discount received Suspense Correction of misposting of discounts (1)

30 (1)30 (1)

60 (1)

2 Joanie Yolanda Correction of misposting of receipt of cash (1)

85 (1)85 (1)

3 Sales returns Suspense Correction of misposting of sales returns journal total (1)

10 (1)10 (1)

4 Stationery Office equipment Correction of revenue expenditure treated as capital expenditure (1)

150 (1)150 (1)

[13]




(d) Leroy Suspense account

2015 $ 2015 $

Sept 30 Balance b/d 70 (1of) Sept 30 Discount allowed and received

60 (1of)

Sales returns 10 (1of)

70 70

[3] (e)

No effect Increase $

Decrease $ $

Draft profit 5 170

Error 1 60 (2)

Error 2 � (1)

Error 3 10 (2)

Error 4 150 (2)

Corrected profit

4 950(1)OF

Marks with figures: 1 for figure, 1 for direction [8] [Total: 34]





0452 ACCOUNTING








1 (a) A (b) B (c) D (d) C (e) C (f) C (g) A (h) B (i) B (j) D (1) mark each [Total: 10]




2 (a) Debit note: a document from a customer asking for a reduction in the value of an invoice received by them. (1)

Credit note: a document sent to the customer showing the reduction of an invoice. (1) Statement of account: to summarise a customer’s transactions for the month. (1) [3] (b) So that accounts of the same type can be kept together To allow division of work To allow easier reference To allow checking procedures to be introduced Any one reason (1) [1] (c)

Account Ledger

Delivery van/Motor vehicles Nominal/general

Sales Nominal/general (1)

Susan Sales (1)

Carriage inwards Nominal/general (1)

Drawings Nominal/general (1)

Adam Purchases (1)

[5] (d) Current assets (1) [1] (e)


Purchases (1) Alice (1)

[2] (f)

Discount allowed Discount received

in the books of Ivy � (1)

in the books of Alice � (1)

[2] (g) Statement of account (1) [1] [Total: 15]




3 (a) Any two for (1) each e.g. plant and equipment, factory premises, office premises, delivery vehicle [2]

(b)

non-current asset current asset

lasting more than 12 months lasting less than 12 months

bought to keep and use in the business

bought to resell/expected to turn into cash within 12 months

depreciated not depreciated

Any one comment (1), comparison comment (1) [2] (c) Amount received when a non-current asset is sold Receipt of a loan Share issue/capital introduced Any one example (1) [1] (d)

Capital expenditure

Revenue expenditure

Purchase of inventory � (1)

Purchase of stationery � (1)

Legal fees on purchase of land � (1)

Construction costs of factory � (1)

[4] (e) Disposal (1) [1] (f) Consistency (1) [1] (g) Historical/only deals with the past Difficulties of definition Non-financial aspects Unable to predict future Doesn’t identify the cause of a problem Any one for (1) mark [1] [Total: 12]




4 (a) Esme

Sales ledger control account $ $ 2014 2014 Jan 1 Balance b/d 9 500 (1) Dec 31 Sales returns 1 050 (1) Dec 31 Sales 95 100 (1) Bank/Cash 92 750 (1) Bank 450 (1) Discount allowed 2 100 (1) Balance c/d 50 Bad debt 300 (1) PLCA/Contra 100 (2)* Balance c/d 8 800

105 100 105 100 2015 2015 Jan 1 Balance b/d 8 800 (1of) Jan 1 Balance b/d 50 (1)

Note * (2) for 100, (1) for 180

Esme

Purchases ledger control account $ $ 2014 2014 Dec 31 Purchases rets 1 950 (1) Jan 1 Balance b/d 7 000 (1) Bank/Cash 59 000 (1) Dec 31 Purchases 63 600 (1) Discount received 850 (1) SLCA/Contra 100 (1of) Balance c/d 8 700 70 600 70 600 2015 Jan 1 Balance b/d 8 700 (1of)

[18] (b) Provide total of trade receivables Check for the arithmetical accuracy of the sales ledger Reduce fraud To check for errors or fraud Provide summary of transactions involving debtors Enable financial statements to be prepared quickly Any one for (1) mark [1] (c) Payment before specified date (1) [1] [Total: 20]




5 (a) Elliott

Cash Book

Date Details Cash $

Bank $

Date Details Cash $

Bank $

2015 2015 May 1 Capital 12 000 (1) May 31 Rent 3 000 (1) May 31 Sales 2 250 (1) 4 200 (1) Purchases 5 000 (1) Cash 2 000 (1) Drawings 3 600 (1) Sundry expenses 150 (1) Bank 2 000 (1) Balance c/d 100 6 600 2 250 18 200 2 250 18 200 June 1 Balance b/d 100 (1of) 6 600 (1of) [11] (b) Cost of sales Purchases 5000 (1of) – closing inventory 1100 (1) = 3900 (1of) OR (5 × 300) (1) + (6 × 400) (1) = 3900 (1of) Expenses Rent 1000 (1) + other expenses (150 + 80) (1) = 1230 (1of) Profit for the month Sales 6450 (1of) – (3900 + 1230) (1of) = 1320 (1of) [9]




(c) Elliott

Statement of Financial Position at 31 May 2015 $ Non-current assets Vehicle 1 800 (1) Current assets Inventory 1 100 (1) Other receivable 2 000 (1) Bank 6 600 (1of) Cash 100 (1of) 9 800 Total assets 11 600 Capital at 1 May 2015 13 800 (1) Profit 1 320 (1of) 15 120 Drawings 3 600 (1) Capital at 31 May 2015 11 520 Current liabilities Other payable 80 (1) Total liabilities 11 600

[9] (d) Elliott’s drawings are greater than his profit (1) [1] [Total: 30]




6 (a) General Stores Limited

Fixtures and fittings account 2014 $ 2014 $ 1 Jan Balance b/d 31 500 (1) 1 Mar Disposal 6 000 (1) 1 Mar Bank 17 400 (1) 31 Dec Balance c/d 42 900

48 900 48 900 2015 1 Jan

Balance b/d 42 900

(1of)

+1 for dates [5]

(b) 42 900 (1of) × 0.3 = $12 870 (1of) [2] (c)

General Stores Limited Income Statement for the year ended 31 December 2014

$ $ Revenue 227 000 (1) Inventory 1 January 2014 41 200 Purchases 129 000

170 200 Inventory 31 December 2014 44 520 1 for both

Cost of sales 125 680 (1of) Gross profit 101 320 (1of) Sales assistants’ wages 15 900 } Office salaries 12 060 } (1) Depreciation 12 870 (1of) Rent 24 000 (1) Sundry expenses 6 220 (1) 71 050

Profit from operations 30 270 Interest 15 000 (1) Profit for the year 15 270 (1of)

[10]




(d)

General Store Limited Statement of Changes in Equity for the year ended 31 December 2014

Details Share capital $

General reserve $

Retained earnings $

Total $

On 1 January 2014 100 000 20 000 4 810 124 810

Profit for the year .……… ……..... 15 270 15 270 (1of)

Dividend paid ……… ……… (10 000) (10 000) (1)

Transfer to general reserve ……… 5 000 (5 000) – (1)

On 31 December 2014 100 000 25 000 5 080 (1of) 130 080 (1of)

[5] (e) 30 270/227 000 (1of) × 100 = 13.33% (1of) OR 15 270 / 227 000 (1of) × 100 = 6.73% (1of) [2] (f) Neighbouring shop may sell different mix of goods (1) with a higher gross profit margin (1).

Neighbouring shop may have different policies (1) for instance for depreciation (1). Illustration with figures e.g. if depreciation rate was 10% then net profit margin would be 3.8% higher (1).

Neighbouring shop controls expenses better (1). Neighbouring shop may own premises and avoid rent payment (1). Illustration with figures

e.g. rent accounts for 10.57% of revenue (1). If using profit after interest also allow Neighbouring shop may have more equity/capital (1) and not have the interest cost (1).

Illustration with figures e.g. interest amounts to 6.6% of sales (1). [Max 6] (g) Increase selling prices/increase gross profit margin/reduce cost of sales Reduce expenses/rent cheaper premises Find cheaper lenders of finance to reduce interest charges Review depreciation rate – do fixtures only have a life of 3 to 4 years Turn overdrafts and short term loans into long term loans to reduce interest rate Any 3 for (1) mark each. [3] [Total: 33]





0452 ACCOUNTING








1 (a)

Shahid Ayub Cash Book

Date Details Discount Allowed

Cash Bank Date Details Discount Received

Cash Bank

2015 $ $ $ 2015 $ $ $

Aug 1 Balance b/d (1) 50 Aug 1 Balance b/d 7150

24 Mariam Soliman (1) 13 507 9 El Nil Supply Company

30 Sales (1) 3224 (dis cheque) (1) 362

31 Cash c (1)OF 3174 18 Drawings (1) 54

Balance c/d 3885 31 Bank c (1) 3174

Balance c/d 100

13 3274 7566 3274 7566

2015 Balance b/d 2015

Sept 1 Sept 1 Balance b/d

100 (1)

3885 (1)OF

+ (1) dates [9]

Page 3 Mark Scheme Syllabus Paper Cambridge IGCSE – October/November 2015 0452 21


(b) (i) $316 (1) (ii) Mariam Soliman (1) [2] (c)

Transaction Document Book of prime (original) entry

August 9 Goods

13 Returns 24 Payment

Sales invoice (1) Credit note (1) Cheque (OR Paying in book) (1)

Sales Journal (1) Sales Returns Journal (1) Cash book (1)

[6] (d)

Mariam Soliman Shahid Ayub Account

$ $

2015 2015

Aug 13 Returns 24 (1) Aug 1 Balance b/d 520

24 Bank/Cash 507 (1) 9 Purchases 340 (1) Discount 13 (1)

31 Balance c/d 316

860 860

2015

Sept 1 Balance b/d 316 (1)O/F

Three column running balance presentation acceptable +(1) for dates [6] [Total: 23]



2 (a) Grace Zindi

Income Statement for the year ended 31 July 2015

$ $ Income from Clients (28 500 (1) + 3400 (1)) 31 900

Commission receivable (7600 (1) + 250 (1)) 7 850

39 750 Wages 21 600 (1) Rates and Insurance ((3900 (1) – 300 (1)) × ¾ (1)) 2 700 General Expenses 990 (1) Heat and Light 710 (1) Provision for Doubtful Debts (1% × 3400) 34 (1)

Depreciation motor vehicles (12 500 – 4500 (1) × 20% (1)) 1 600

Depreciation office equipment (11 400 + 6900 (1) – 14 500 (1)) 3 800 31 434

Profit for the year 8 316 (1)OF [16] (b)

Grace Zindi

Capital Account

$ $ 2015 2014 31 July Cash/Drawings 15 500 (1) 1 Aug Balance b/d 85 000 (1) Rates &

Insurance 2015

Drawings 900 (1) 31 July Profit 8 316 (1)OF Balance c/d 76 916 93 316 93 316 2015 1 Aug Balance b/d 76 916 (1)OF

+(1) For dates Three column running balance presentation acceptable [6] (c) Revenue for the year is matched against the costs of the same period (1) Example Either Insurance prepaid at year-end was deducted Or Commission receivable outstanding at year-end was added Or Amount owing from clients at year-end was added (1) [2] (d) The business is treated as being separate from the owner (1) Example The proportion of rates and insurance relating to the owner’s flat was excluded from the

business expenses (1) [2] [Total: 26]



3 (a) Physical deterioration Economic reasons Passage of time Depletion Any 2 reasons (1) each [2] (b) The depreciation is calculated on the net cost price (1) and the same amount is written off

each year (1) [2] (c) The same percentage is written off each year (1) but it is calculated on the net book value of

the asset (1) [2] (d) Ensures that non-current assets are shown at more realistic values (1) Ensures that the profit for the year is not overstated (1) [2] (e) Accruals (matching) (1) [1]



(f) (i) Natasha Salim

Machinery Account

$ $ 2013 2014 Oct 1 Bank 4 000 (1) Sept 30 Balance c/d 10 000 2014 Jan 1 ABC Machines 6 000 (1)

10 000 10 000 2014 2015 Oct 1 Balance b/d 10 000 (1)OF Feb 1 Disposal 4 000 (1)

Sept 30 Balance c/d 6 000 10 000 10 000

2015 Oct 1 Balance b/d 6 000 (1)OF

(ii)

Provisions for depreciation of machinery account

2014 $ 2014 $ Sept 30 Balance c/d 2 000 Sept 30 Income

Statement 800(1) + 1200 (1) 2 000

2 000 2 000 2015 2014

Feb 1 Disposal 800 (1) Oct 1 Balance b/d 2 000 (1)OF Sept 30 Balance c/d 2 160 2015

Sept 30 Income Statement 960 (1) 2 960 2 960 2015 Oct 1 Balance b/d 2 160 (1)OF (2)CF

Three column running balance presentation acceptable [12] (g)

$ Proceeds of Sale 2 100 Provision for depreciation 800 (1)OF 2 900 Less Cost Price 4 000 (1) Profit/Loss (1) on disposal 1 100 (1)OF

Accept alternative formats [4] [Total: 25]



4 (a) Moses and Tobias Lyambo

Corrected Statement of Financial Position at 31 October 2015

$ $ $ Assets Non-current assets Premises at cost 80 000 Fixtures and Equipment at book value (24 80 – 3100) 21 700 (1) 101 700 (1) Current Assets Inventory 6 950 Trade Receivable 5 200 Provision for doubtful debts 130 (1) 5 070 Bank (1500 – 70) 1 430 (1) Cash 500 (1) 13 950 (1)OF Total assets 115 650 Capital and liabilities M lyambo T lyambo Total Capital Accounts 65 000 35 000 100 000 (1) Current Accounts Balance (2 000) 3 500 (1) Share of Profit 9 000 9 000 (1) 7 000 12 500 Drawings 8 000 5 500 (1) 1 000 (1) 7 000 (1) 6 000 (1)OF 106 000 (1)OF Current liabilities Trade Payables 8 520 Other Payables 1 130 (1) 9 650 (1) Total Liabilities 115 650

Accept current account calculations outside statement [16] (b) Introduce more capital Obtain long-term loan Mortgage premises Or other suitable way Any two ways (1) each [2]



(c) Introduce more capital Obtain long-term loan Mortgage premises Or other suitable way Any two ways (1) each [2] (d)

Increase Decrease No effect Sale of surplus equipment �(1)

Delay payment to credit suppliers �(1)

Paying surplus cash into bank � (1)

Writing off a bad debt � (1)

[4] [Total: 24]



5 (a) Kelbrook Limited

Extract from Statement of Financial Position at 30 September 2015

$ Equity and Reserves Ordinary Share Capital 90 000 (1)

General Reserve (4000 (1) + 2000 (1) 6 000

Retained Earnings (5500 (1) + 2500 (1)) 8 000

104 000 [5] (b)

Current ratio

Workings (5100 + 8500) : (6100 + 4300 + 1400) 13 600 : 11 800 (1)

Answer to two decimal places

1.15 : 1 (1)

Quick ratio

Workings

8500 : (6100 + 4300 + 1400) 8500 : 11 800 (1)


0.72 : 1 (1)

Return on capital employed (ROCE)

Workings 9000 } × 100 90 000 +6000 + 8000} (1) 1 OR 9000 } ×100 102 200 +13 600 – 11 800} (1) 1


8.65% (1)

[6]



(c) Ratio has fallen Current assets only just cover the current liabilities May have problems in meeting debts when they fall due Is below the generally-accepted “benchmark” Or other suitable comments based on answer to (b) Any 2 points (1) each [2] (d) Change from positive bank balance to overdraft/increase in overdraft/reduction in bank balance Increased expenditure on inventory/increase in inventory Purchase of non-current assets Repayment of long-term loan Increase in current liabilities Decrease in trade receivables Any 1 reason (1) [1] (e) Increase the profit Reduce the capital employed Any 2 reasons (1) each [2]

(f) (i) 1

365

45000

8500× (1) = 69 days (1) [2]

(ii) On average credit customers are taking 9 days more than is allowed This may affect the ability of the business to pay current liabilities This may affect the ability of the business to take advantage of opportunities when they arise Or other suitable comments based on answer to (f)(i) Any 2 points (1) each [2] (g) On average are taking 22 days more than is allowed to pay credit suppliers This may be caused by the credit customers taking too long to pay May result in further supplies being refused Or other suitable points Any 2 points (1) each [2] [Total: 22]





0452 ACCOUNTING








1 (a)

Shahid Ayub Cash Book

Date Details Discount Allowed

Cash Bank Date Details Discount Received

Cash Bank

2015 $ $ $ 2015 $ $ $

Aug 1 Balance b/d (1) 50 Aug 1 Balance b/d 7150

24 Mariam Soliman (1) 13 507 9 El Nil Supply Company

30 Sales (1) 3224 (dis cheque) (1) 362

31 Cash c (1)OF 3174 18 Drawings (1) 54

Balance c/d 3885 31 Bank c (1) 3174

Balance c/d 100

13 3274 7566 3274 7566

2015 Balance b/d 2015

Sept 1 Sept 1 Balance b/d

100 (1)

3885 (1)OF

+ (1) dates [9]



(b) (i) $316 (1) (ii) Mariam Soliman (1) [2] (c)

Transaction Document Book of prime (original) entry

August 9 Goods

13 Returns 24 Payment

Sales invoice (1) Credit note (1) Cheque (OR Paying in book) (1)

Sales Journal (1) Sales Returns Journal (1) Cash book (1)

[6] (d)

Mariam Soliman Shahid Ayub Account

$ $

2015 2015

Aug 13 Returns 24 (1) Aug 1 Balance b/d 520

24 Bank/Cash 507 (1) 9 Purchases 340 (1) Discount 13 (1)

31 Balance c/d 316

860 860

2015

Sept 1 Balance b/d 316 (1)O/F

Three column running balance presentation acceptable +(1) for dates [6] [Total: 23]



2 (a) Grace Zindi

Income Statement for the year ended 31 July 2015

$ $ Income from Clients (28 500 (1) + 3400 (1)) 31 900

Commission receivable (7600 (1) + 250 (1)) 7 850

39 750 Wages 21 600 (1) Rates and Insurance ((3900 (1) – 300 (1)) × ¾ (1)) 2 700 General Expenses 990 (1) Heat and Light 710 (1) Provision for Doubtful Debts (1% × 3400) 34 (1)

Depreciation motor vehicles (12 500 – 4500 (1) × 20% (1)) 1 600

Depreciation office equipment (11 400 + 6900 (1) – 14 500 (1)) 3 800 31 434

Profit for the year 8 316 (1)OF [16] (b)

Grace Zindi

Capital Account

$ $ 2015 2014 31 July Cash/Drawings 15 500 (1) 1 Aug Balance b/d 85 000 (1) Rates &

Insurance 2015

Drawings 900 (1) 31 July Profit 8 316 (1)OF Balance c/d 76 916 93 316 93 316 2015 1 Aug Balance b/d 76 916 (1)OF

+(1) For dates Three column running balance presentation acceptable [6] (c) Revenue for the year is matched against the costs of the same period (1) Example Either Insurance prepaid at year-end was deducted Or Commission receivable outstanding at year-end was added Or Amount owing from clients at year-end was added (1) [2] (d) The business is treated as being separate from the owner (1) Example The proportion of rates and insurance relating to the owner’s flat was excluded from the

business expenses (1) [2] [Total: 26]



3 (a) Physical deterioration Economic reasons Passage of time Depletion Any 2 reasons (1) each [2] (b) The depreciation is calculated on the net cost price (1) and the same amount is written off

each year (1) [2] (c) The same percentage is written off each year (1) but it is calculated on the net book value of

the asset (1) [2] (d) Ensures that non-current assets are shown at more realistic values (1) Ensures that the profit for the year is not overstated (1) [2] (e) Accruals (matching) (1) [1]



(f) (i) Natasha Salim

Machinery Account

$ $ 2013 2014 Oct 1 Bank 4 000 (1) Sept 30 Balance c/d 10 000 2014 Jan 1 ABC Machines 6 000 (1)

10 000 10 000 2014 2015 Oct 1 Balance b/d 10 000 (1)OF Feb 1 Disposal 4 000 (1)

Sept 30 Balance c/d 6 000 10 000 10 000

2015 Oct 1 Balance b/d 6 000 (1)OF

(ii)

Provisions for depreciation of machinery account

2014 $ 2014 $ Sept 30 Balance c/d 2 000 Sept 30 Income

Statement 800(1) + 1200 (1) 2 000

2 000 2 000 2015 2014

Feb 1 Disposal 800 (1) Oct 1 Balance b/d 2 000 (1)OF Sept 30 Balance c/d 2 160 2015

Sept 30 Income Statement 960 (1) 2 960 2 960 2015 Oct 1 Balance b/d 2 160 (1)OF (2)CF

Three column running balance presentation acceptable [12] (g)

$ Proceeds of Sale 2 100 Provision for depreciation 800 (1)OF 2 900 Less Cost Price 4 000 (1) Profit/Loss (1) on disposal 1 100 (1)OF

Accept alternative formats [4] [Total: 25]



4 (a) Moses and Tobias Lyambo

Corrected Statement of Financial Position at 31 October 2015

$ $ $ Assets Non-current assets Premises at cost 80 000 Fixtures and Equipment at book value (24 80 – 3100) 21 700 (1) 101 700 (1) Current Assets Inventory 6 950 Trade Receivable 5 200 Provision for doubtful debts 130 (1) 5 070 Bank (1500 – 70) 1 430 (1) Cash 500 (1) 13 950 (1)OF Total assets 115 650 Capital and liabilities M lyambo T lyambo Total Capital Accounts 65 000 35 000 100 000 (1) Current Accounts Balance (2 000) 3 500 (1) Share of Profit 9 000 9 000 (1) 7 000 12 500 Drawings 8 000 5 500 (1) 1 000 (1) 7 000 (1) 6 000 (1)OF 106 000 (1)OF Current liabilities Trade Payables 8 520 Other Payables 1 130 (1) 9 650 (1) Total Liabilities 115 650

Accept current account calculations outside statement [16] (b) Introduce more capital Obtain long-term loan Mortgage premises Or other suitable way Any two ways (1) each [2]



(c) Introduce more capital Obtain long-term loan Mortgage premises Or other suitable way Any two ways (1) each [2] (d)

Increase Decrease No effect Sale of surplus equipment �(1)

Delay payment to credit suppliers �(1)

Paying surplus cash into bank � (1)

Writing off a bad debt � (1)

[4] [Total: 24]



5 (a) Kelbrook Limited

Extract from Statement of Financial Position at 30 September 2015

$ Equity and Reserves Ordinary Share Capital 90 000 (1)

General Reserve (4000 (1) + 2000 (1) 6 000

Retained Earnings (5500 (1) + 2500 (1)) 8 000

104 000 [5] (b)

Current ratio

Workings (5100 + 8500) : (6100 + 4300 + 1400) 13 600 : 11 800 (1)


1.15 : 1 (1)

Quick ratio

Workings

8500 : (6100 + 4300 + 1400) 8500 : 11 800 (1)


0.72 : 1 (1)

Return on capital employed (ROCE)

Workings 9000 } × 100 90 000 +6000 + 8000} (1) 1 OR 9000 } ×100 102 200 +13 600 – 11 800} (1) 1


8.65% (1)

[6]



(c) Ratio has fallen Current assets only just cover the current liabilities May have problems in meeting debts when they fall due Is below the generally-accepted “benchmark” Or other suitable comments based on answer to (b) Any 2 points (1) each [2] (d) Change from positive bank balance to overdraft/increase in overdraft/reduction in bank balance Increased expenditure on inventory/increase in inventory Purchase of non-current assets Repayment of long-term loan Increase in current liabilities Decrease in trade receivables Any 1 reason (1) [1] (e) Increase the profit Reduce the capital employed Any 2 reasons (1) each [2]

(f) (i) 1

365

45000

8500× (1) = 69 days (1) [2]

(ii) On average credit customers are taking 9 days more than is allowed This may affect the ability of the business to pay current liabilities This may affect the ability of the business to take advantage of opportunities when they arise Or other suitable comments based on answer to (f)(i) Any 2 points (1) each [2] (g) On average are taking 22 days more than is allowed to pay credit suppliers This may be caused by the credit customers taking too long to pay May result in further supplies being refused Or other suitable points Any 2 points (1) each [2] [Total: 22]





0452 ACCOUNTING







1 (a) (i) Lack of funds No signature Amount in words and figures differ No date Or other suitable reason Any 1 reason (1) [1]

(ii) This is a contra entry (1) Cash has been withdrawn from the bank for business use (1) [2] (iii) Money received from sales: some retained in cash and some paid into the bank (1) [1]

(iv) ( )13507

13

+

= 1

100 = 2½% (1) [1]

(v) Debited (1) to the discount allowed account (1) [2] (vi) 944 – 667 = 277 (1) [1] (b)

Paul Chew Bank Reconciliation Statement at 30 September 2015

$ $ Balance shown on bank statement (43) (1) Add Amounts not credited 560 (1) Cheque not yet credited – Yeung & Co 267 (1) 827 784

Less Cheque not yet presented – K Tan 507 (1) Balance shown in cash book 277 (1) OF

Alternative form of presentation acceptable [5]



(c)

Document

Paul Chew’s book of prime

(original) entry

Kim Chan’s book of prime

(original) entry

Paul Chew sold goods on credit to Kim Chan

Invoice (1) Sales

Journal (1) Purchases Journal (1)

Kim Chan notified Paul Chew of an overcharge

Debit note (1) No entry (1) No entry (1)

Paul Chew notified Kim Chan that he agreed the overcharge

Credit note (1)

Sales Returns

Journal (1)

Purchases Returns

Journal (1)

Paul Chew sent Kim Chan a summary of the month’s transactions

Statement of account (1) No entry (1) No entry (1)

[12] [Total: 25]



2 (a) Ishmael Makumbo

Rent receivable account $ $ 2014 2014 Sept 1 Balance b/d 2 100 (1) Sept 2 Bank 4 200 (1) 2015 2015 Aug 31 Income statement 8 400 (1) Jan 3 Bank 2 100 }(1) May 4 Bank 2 100 } Aug 31 Balance c/d 2 100 10 500 10 500 2015 Sept 1 Balance b/d 2 100 (1)OF

+ (1) for dates Three column running balance presentation acceptable [6] (b) Current assets (1) It is an amount owing to Ishmael Makumbo (1) [2] (c)

Ishmael Makumbo Motor expenses account

$ $ 2014 2014 Sept 7 Bank 274 (1) Sept 1 Balance b/d 274 (1) 2015 2015 Feb 1 Cash 96 (1) Aug 31 Income statement 209 (1) Aug 31 Balance c/d 113 483 483 2015 Sept 1 Balance b/d 113 (1)

+ (1) for dates Three column running balance presentation acceptable [6]



(d)

Ishmael Makumbo Journal

Debit $

Credit $

Drawings Purchases Goods taken for own use

300 300

(1) (1) (1)

Drawings Telephone expenses Personal telephone expenses transferred to drawings account

108 108

(1) (1) (1)

One composite journal entry acceptable [6] [Total: 20]



3 (a) Error 1 – Error of omission (1) 2 – Error of principle (1) 3 – Error of reversal (1) [3] (b)

Sally Rickard Corrected Trial Balance at 31 October 2015

Revenue Purchases Wages Motor expenses (1600 + 430) General expenses (7250 + 150)Premises at cost Equipment and fixtures at cost Motor vehicle at cost (13930 – 430) Provision for depreciation of equipment and fixtures Provision for depreciation of motor vehicles Trade receivables (26 800 – 520)Provision for doubtful debts Trade payables Cash (350 – 150) Bank overdraft (4810 – 520) Loan from AB Loans Drawings Capital Inventory 1 November 2014

Debit $

99 30027 000

2 0307 400

80 00010 00013 500

26 280

200

12 500

7 100

Credit $

160 400

1 050 5 750

670

8 150

4 290 10 000

95 000

(1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1)OF (1) (1)OF 285 310 285 310

[13]



(c)

Effect on profit

Accounting principle

Increase Decrease

An amount owing by a credit customer should have been written off

�(1) Prudence OR Accruals / matching (1)

The general expenses includes rates which were prepaid until 31 December 2015.

�(1) Accruals/ matching (1)

Goods invoiced and despatched to a customer were not recorded as the customer did not receive them until 3 November 2015

�(1) Realisation (1)

No record had been made of goods taken for personal use

�(1) Business Entity (1)

[8] [Total: 24]



4 (a) (i) Cost of sales } (1) Average inventory } [1] (ii) 32 500 } (1) = 5.42 times (1) 6 000 } [2] (iii) Higher inventory levels

Lower sales activity Or other suitable reason Any 2 reasons (1) each [2]

(b) (i) Lower of cost and net realisable value (1) [1] (ii) Prudence (1) [1] (c)

Extract from Statement of Financial Position at 31 July 2015 Sanch Syed

Mirza Mirza Total $ $ $ Capital account 30 000 (1) 60 000 (1) 90 000 Current account (3 500) (1) 2 500 (1) (1 000) 26 500 62 500 89 000 (1)

[5]

(d) (i) }

}(1)

1

100

employed Capital

interest) before yearthe for profit (or yearthe for Profit× [1]

(ii) }

}(1)

OF000 89

000 9 ×

1

100 = 10.11% (1) OF [2]

(iii) Lower profit for the year

Higher capital employed Any 1 reason (1) [1]



(e) (i) To compensate him for investing the most capital To encourage Sanchi to invest more Or other suitable reason Any 2 reasons (1) each [2]

(ii) To penalise Sanchi for making more drawings

To discourage Sanchi from making excessive drawings Or other suitable reason Any 1 reasons (1) mark [1]

(iii) To compensate Sanchi for extra workload

To reward Sanchi for extra skills Or other suitable reason Any 1 reasons (1) mark [1]

(f) (i) }

}(1)

1

365

purchases credit

payable trade× [1]

(ii) (1)}

}(1) days 49

1

365

000 31

000 4=× [2]

(iii) Exceeds credit allowed

May find it difficult to obtain further supplies May damage relationship with suppliers May not be able to take advantage of cash discount from suppliers Or other relevant comment Any 2 comments (1) each [2]

(g) Reduces liquidity

May find it difficult to pay trade payables May find it difficult to pay running expenses May lead to bank overdraft Cannot take advantage of business opportunities when they arise May not be able to take advantage of cash discount from suppliers Or other relevant comment Any 2 comments (1) each [2]

[Total: 27]



5 (a) $ Subscription received 6 180 (1) Less amount for previous year 360 (1) 5 820 Less amount for following year 270 (1) 5 550 Add amount prepaid at start 450 (1) Subscription for the year 6 000 (1)

Alternative forms of presentation acceptable [5] (b)

Hills Road Youth Club Refreshment Income Statement for the year ended 31 October 2015 $ $ Sales of refreshments 3 100 (1) Cost of sales Opening inventory 280 (1) Purchases 2 650 (1) 2 930 Closing inventory 310 (1) 2 620 Profit in refreshments 480 (1)

[5] (c)

Hills Road Youth Club Income and Expenditure Account for the year ended 31 October 2015

$ $ Subscriptions 6 000 (1)OF Profit on refreshments 480 (1)OF 6 480 Repairs to equipment 220 Insurance (1350 (1) – 270 (1)) 1 080 Rent of premises (1430 (1) + 130 (1)) 1 560 General expenses 2 540 Depreciation of equipment ((6000 + 2000) (1) – 6800 (1)) 1 200 6 600

Deficit 120 (1)OF [9]



(d) Income and expenditure account includes non-monetary items Income and expenditure account has adjustments for accruals and prepayments Income and expenditure account includes only revenue items Or other suitable reason Any 2 reasons (1) each [2]

(e) The members of the club have not invested any capital (1) so there can be no

dividends/profit share which represent a return on capital invested (1) [2] (f) Accumulated fund arises from the surpluses the club has made (1) [1] [Total: 24]

Documents

0452 ACCOUNTING - maxpapersmaxpapers.com/wp-content/uploads/2012/11/0452_w15_ms_all.pdf · + 1 for IAS terminology ... Suspense account 2015 $ 2015 $ ... 2 Bank account 2 000 (1)