Class Index Number

Name:

There are a total of 8 printed pages (including the cover page)

Answer all questions.
Jurong West Secondary School
1 The following trial balance was extracted from the books of Jie Ge’s business at the
end of the financial year on 30 June 2023.
Preliminary Examinations 2023 60
$

Sales revenue 87 000

Sales returns 600

Office equipment at cost 46 000

PRINCIPLES OF 7086/02

NA ACCOUNTS
Paper 2
Thursday, 3 Aug 2023
0800 - 1000
Accumulated depreciation of office equipment

Cost of sales

Allowance for impairment of trade receivables

9 200

11 700

2 400
2 hours
Secondary Four
Loan (repayable 30 June 2025) 16 800
Normal Academic
Capital, 1 July 2022 34 020

Cash at bank 4 200

Candidates answer on foolscap papers provided.
Commission income 5 600

READ THESE INSTRUCTIONS FIRST Drawings 8 400

Inventory 10 800
Write your name, class and index number in the spaces on all the work you hand in.
Write in dark blue or black pen. Loan interest 620
You may use an HB pencil for any diagrams, graphs, tables or rough working.
Rent expense 8 200
Do not use staples, paper clips, glue or correction fluid.
Wages and salaries 48 300
The use of an approved calculator is allowed.
Trade receivables 28 600
You may lose marks if you do not show your working or if you do not use appropriate units.
Trade payables 12 400
Answer all questions.

The businesses described in this question paper are entirely fictitious.

The number of marks is given in brackets [ ] at the end of each question or part question.

After checking of answer script

Checked by Signature Date
Student

JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA

Setter: Ms Shirley Neo Page 1 of 8 Page 2 of 8

 2 Eilzabeth opened an Ez-Cafe on 1 July 2021.
Additional information
The following information was available from her business.
1 On 30 June 2023
Rent $500, was paid in advance.
Loan interest $1880 was still oustanding. Date Transaction
Commission income of $1400 has not been received. 2021
Jul 1 Elizabeth invested $15 000 cheque to open the Ez-Cafe.
2 Jie Ge’s drawings of $790 were included in wages and salaries.
Dec 15 She paid $2 000 to trade payables using her personal cheque.
3 Uncollectible debt, $600, was to be written off.
2022
4 Allowance for impairment of trade receivables is to be $2000.
Jun 30 Profit for the year amounted to $7 800.
5 Depreciation of office equipment is to be provided at 20% per annum using
Dec 27 Elizabeth withdrew $800 from the business bank account to pay for her
reducing balance method.
own utilities.
2023
Jan 5 Elizabeth took $500 goods for her family use.
REQUIRED
Jun 30 Loss for the year amounted to $1 690.
(a) Prepare the statement of financial performance for the year ended 30 June 2023.
[10]
REQUIRED
(b) Prepare the statement of financial position as at 30 June 2023. [10]
(a) Prepare the closing entry to transfer the total drawings to capital account for the
year ended 30 June 2023. A narration is required. [3]
[Total: 20]
(b) Prepare the capital account for the two years ended on 30 June 2022 and
30 June 2023. [7]

(c) Define owner’s equity. [1]

(d) Explain, with an accounting theory, how the business treats owner’s contributions
and withdrawal of business’s resources for personal use. [2]

[Total: 13]

JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA

Page 3 of 8 Page 4 of 8
3 Tyson Ltd buys machines to manufacture rubber tyres. The business estimates that REQUIRED
its machineries have a useful life of 10 years and charges a full year of depreciation (a) Interpret the entries on the following dates:
for its non-current assets in the year of purchase.
(i) 1 January 2021
The financial year for Tyson Ltd ends on every 31 December. (ii) 1 July 2022
(iii) 31 December 2022 [3]
The following accounts relate to the business’s machineries.
(b) Explain the method of depreciation used by the business. [2]
Machineries account
Date Particulars Debit Credit Balance (c) Name the ledger account to which depreciation expense is transferred to when the
2021 $ $ $ account is closed at the end of the year. [1]
Jan 1 Loan from Beng Finance (i) 60 000 60 000 Dr
(d) Define depreciation. [1]
2022
Jan 1 Balance b/d 60 000 Dr
(e) Define accumulated depreciation. [1]
Jul 1 Trade payable – Big Trading (ii) 40 000 100 000 Dr
2023 (f) State and explain using a relevant accounting theory why Tyson Ltd should charge
Jan 1 Balance b/d 100 000 Dr depreciation on its non-current assets. [2]

(g) Tyson Ltd intents to change the depreciation method used on machineries in the
Accumulated depreciation of machineries account
subsequent years. Explain, with a relevant accounting theory, if this is advisable.
Date Particulars Debit Credit Balance
[2]
2021 $ $ $
Dec 31 Depreciation of machineries 6 000 6 000 Cr
[Total: 12]
2022
Jan 1 Balance b/d 6 000 Cr
Dec 31 Depreciation of machineries (iii) 10 000 16 000 Cr
2023
Jan 1 Balance b/d 16 000 Cr

JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA

Page 5 of 8 Page 6 of 8
4 Joshua sells running shoes and buys on credit from Linear Style. Joshua is considering to buy its running shoes from an online shop, Kinetic Degree,
instead of its usual supplier, Linear Style.
The credit period is 15 days and there is a trade discount of 20% on all credit
purchases. Linear Style’s credit term is to offer 5% cash discount for payment made The following information is available.
within 15 days of the invoice date.
Supplier Linear Style Kinetic Degree
The following transactions occurred in the month of April 2023.
Price per pair of
$80 $70
2023 running shoes
5 Apr Joshua received an invoice with a list price, $5000 from Linear Style. Trade discounts given
for every 100 pair of 20% 5%
8 Apr Joshua received a credit note from Linear Style for the goods bought
running shoes
previously on 5 April. The list price of these goods was $200.
Credit period 15 days 30 days
20 Apr Issued a cheque to Linear Style in full settlement of amount owing.
Nature Physical shop Online business
REQUIRED
All running shoes can be
(a) State the journal entries with which Joshua recorded the transactions occurred in All running shoes can be
returned within 30 days.
the month of April 2023. Narrations are not required. [8] returned within 15 days and
Return policy However, the buyer bears
exchanged for new ones
(b) Explain the difference between credit transaction and cash transaction. [2] the transport cost of
without additional charge.
returning the running shoes.

● 10 years in business ● 2 years in business

● Positive feedback from ● Positive online reviews
Reputation of supplier
loyal customers

REQUIRED
(c) Advise Joshua which supplier he should choose. Justify your decision with two
reasons. [5]

[Total: 15]

END OF PAPER 2

JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA JWSS Preliminary Examinations 2023 Principles of Accounts 7086/02 Secondary 4NA

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