TEST CODE 001093/2

TEST CODE 001093/2FORM TP 22142 MAY/JUNE 2002

C A R I B B E A N E X A M I N A T I O N S C O U N C I L

SECONDARY EDUCATION CERTIFICATE

EXAMINATION

PRINCIPLES OF ACCOUNTS

Paper 03/2 General Proficiency

1 hours

10 JUNE 2002 (p.m.) 1.Answer ALL questions.

2.Answer the questions on the Answer Sheet provided and return it.

3.Silent electronic calculators may be used, but ALL necessary working should be clearly shown.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

Copyright 2000 Caribbean Examinations Council.

All rights reserved.

001093/F 2002/2

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The Woodwork Shop at Gutters Technical High School was opened in September 1997, in order to achieve three main objectives:

(i)To provide students with a practical hands on experience in the principles and practice of woodwork. (ii)To allow some students the opportunity to earn as they learn.

(iii)To provide cost savings for the school.

During the first four years, the main activities in the workshop included:

(a)Repairs to chairs and desks for classrooms

(b)Making wooden savings boxes

(c)Repairs to office tables

(d)Repairs to doors

(e)Canteen cupboards manufacture and repairs

(f)Miscellaneous

In September 1997, the government through the Ministry of Education, bought all the machinery for the workshop at a cost of $100 000, the tools at a cost of $40 000, and work benches at a cost of $30 000.

Materials purchased and used each year by the school included:

1997

1998

1999

2000

Lumber

$18 000

$20 000

$24 000

$28 000

Plywood

9 000

10 000

12 000

14 000

Sanding paper

800

1 000

1 000 1 200

Glue

700

800

800

900

Nails

300

400

400

400

Varnish

1 500

1 800

2 000 2 200

Screws

500

800

1 000

1 100

Miscellaneous

1 000

1 000

1 200

1 200

It is estimated that the workshop saved the school the following in EACH of the four years:

Amount saved

Year

$

1997

250 000

1998

268 000

1999

275 000

2000

284 000

GO ON TO THE NEXT PAGE001093/F 2002/2

-3-In addition, the sales of savings boxes were as follows:

$

1997

15 000

1998

18 000

1999

20 000

2000

24 000

Students received 60% of saving box sales.

In order to determine the full cost of operating the workshop, all the fixed assets are depreciated at a rate of 10% on the straight line basis. The woodwork teacher/supervisor has calculated his annual salary at $120 000. All other costs of operating the woodwork shop for each of the four years were as follows:

$

1997

25 000

1998

28 000

1999

30 000

2000

32 000

Additional information

(i)Note that ALL other costs exclude materials purchased, depreciation and teacher/supervisory salary.

(ii)Note that the calculation of revenue for the workshop MUST include savings to the school.

(iii)Note that amounts received by students are NOT treated as expenses.

GO ON TO THE NEXT PAGE

001093/F 2002/2

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QUESTIONS 1.List the fixed assets mentioned in the case.

2.List the current assets mentioned in the case.

3.Name TWO other activities which could take place in the workshop in the future.

4.Show the total revenue for EACH of the four years.

5.What is the depreciation expense EACH year?

6.Calculate the total cost of operating the workshop in EACH of the four years.

7.How much profit is made each YEAR?

8.Identify FOUR other costs/expenses of operating the workshop NOT mentioned in the case.

9.Show the amount received by students from savings box sales in EACH of the four years. 10.Based on the information given which of the objectives were met over the period?

11.Express lumber cost as a percentage of total materials cost in EACH of the four years.

12.Name TWO basic accounting documents which are used by the school in relation to the operation of the workshop. 13.Name THREE original books of accounts relevant to the workshop operations.

14.Name TWO activities of the workshop to which manufacturing accounts can be applied.

15.Prepare a statement to show the Financial Performance of the Woodwork shop for EACH of the first four years and in total including an appropriate heading. 16.What percentage of the total revenue (savings & sales) was achieved in the year 2000?

17.Which year made the largest contribution to total profit?

18.Express total teachers salary as a percentage of total expenses.

19.What is the net book value of workshop machinery after four years?

20.What is the accumulated depreciation on tools after four years?END OF TEST