Cambridge IGCSE Accounting 0452 — 2004 May/June Paper 2 · Variant 1

This document consists of 11 printed pages and 1 blank page. SP (BR) S60098/4 © UCLES 2004 [Turn over UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education ACCOUNTING 0452/02 Paper 2 May/June 2004 1 hour 30 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name on all the work you hand in. Write in dark blue or black pen in the spaces provided on the Question Paper. You may use a soft pencil for rough working. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. At the end of the examination, fasten all your work securely together. The number of marks is given in brackets [ ] at the end of each question or part question. You may use a calculator. Where layouts are to be completed, you may not need all the lines for your answer. The businesses mentioned in this Question Paper are fictitious. Centre Number Candidate Number Name If you have been given a label, look at the details. If any details are incorrect or missing, please fill in your correct details in the space given at the top of this page. Stick your personal label here, if provided. For Examiner’s Use 1 2 3 4 5 Total www.theallpapers.com

For Examiner’s Use 2 © UCLES 2004 0452/02/M/J/04 1 (a) Give one example of a fixed asset likely to be used by an engineering business. …[1] (b) (i) Name the document sent to a customer by a supplier when goods are bought on credit. …[1] (ii) Name the book of prime (original) entry in which the customer will enter this transaction. …[1] (iii) Name the ledger in which the supplier will keep his customer’s account. …[1] (c) A machine was bought for $46000. It has an estimated useful life of five years when its scrap value is expected to be $6000. It is to be depreciated using the straight line (equal instalment) method. Showing your workings, calculate (i) the annual amount of depreciation to be charged … … … …[2] (ii) the annual percentage rate of depreciation to be charged … … …[2] (d) Explain what is meant by an error of original entry. … …[1] (e) State one reason why a supplier would give trade discount to a customer. … …[1] (f) Name the ledger account to which a difference on a trial balance may be posted. …[1] www.theallpapers.com

For Examiner’s Use 3 © UCLES 2004 0452/02/M/J/04 [Turn over (g) Name one accounting ratio which measures a business’s profitability. …[1] (h) A sole trader’s Electricity account for the year ended 31 March 2004 showed the following. $ 1 April 2003 Balance brought down (Cr) 3000 April 2003–March 2004 Bank – payments made during the year 18000 On 31 March 2004 $4000 was owing by the trader for electricity. Calculate the amount charged for electricity in the trader’s Profit and Loss Account for the year ended 31 March 2004. Show your workings. … … … … … … …[3] [TOTAL: 15] www.theallpapers.com

2 The Balance Sheet of Amy Dootes is given below with some words and figures missing. (a) Enter the missing words and figures in the boxes (i) to (vii) on the Balance Sheet. Balance Sheet as at 31 March 2004 Cost Depreciation Net book to date value $ $ $ Fixed Assets 75000 (i) 50000 Current (ii) Stock 24000 Trade debtors 8000 Bank 5000 Prepayments (iii) 40000 ––––––– Less Current Liabilities Trade (iv) 16000 Accrued expenses 4000 20000 –––––– –––––– Working (v) 20000 –––––– 70000 –––––– Financed by: Capital at 1 April 2003 60000 Add Net profit for year (vi) –––––– 80000 Less (vii) for year 10000 –––––– 70000 –––––– [7] (b) Calculate, showing your workings (i) Amy’s current ratio … … …[2] (ii) Amy’s quick ratio … … … …[3] [TOTAL: 12] 4 © UCLES 2004 0452/02/M/J/04 For Examiner’s Use www.theallpapers.com

5 © UCLES 2004 0452/02/M/J/04 [Turn over 3 Ahmed is a sole trader who keeps full accounting records for all his purchases and sales on credit. Entries are posted monthly from prime (original) entry books to ledger accounts, but the entries for April 2004 have not yet been made. (a) (i) From the following information, make the entries required on 30 April 2004 in the ledger accounts below. Total for April 2004 ($) Purchases journal 50000 Sales journal 85000 Purchases returns journal 6000 Sales returns journal 8000 Purchases account … … … Purchases returns account … … … Sales account … … … Sales returns account … … …[4] (ii) In which of Ahmed’s ledgers are the above accounts kept? …[1] For Examiner’s Use www.theallpapers.com

6 © UCLES 2004 0452/02/M/J/04 (b) Ahmed’s trial balance at 30 April 2004 included the following debit balances. $ Carriage inwards 12000 Carriage outwards 14000 State how and where each of the above amounts are shown in Ahmed’s final accounts. 1. Carriage inwards … … 2. Carriage outwards … …[4] (c) After Ahmed’s draft final accounts for the year ended 30 April 2004 were prepared, he discovered that office machinery bought for $10000 had been wrongly entered in the purchases journal. (i) Name this type of error. …[1] (ii) State the effects of this error on Ahmed’s final accounts. 1. Effects on Profit and Loss Account for year ended 30 April 2004 … … … 2. Effects on Balance Sheet as at 30 April 2004 … … …[4] (iii) Give the journal entry (without narrative) required to correct this error. [2] [TOTAL: 16] For Examiner’s Use DR CR $ $ www.theallpapers.com

7 0452/02/M/J/04 [Turn over BLANK PAGE QUESTION 4 IS ON THE FOLLOWING PAGE www.theallpapers.com

8 © UCLES 2004 0452/02/M/J/04 4 Sam is a sole trader who does not keep full accounting records. All purchases and most of his sales are on credit. $ Balances on 1 April 2003 included Debtors 8000 Creditors 6000 During the year ended 31 March 2004 Sam recorded the following information. $ Receipts from debtors 83000 Payments to creditors 74000 Discounts allowed 5000 Discounts received 3000 Credit Sales 90000 Credit Purchases 77000 (a) Calculate Sam’s debtors and creditors as at 31 March 2004. Show your workings. (i) Calculation of debtors … … … … … … … … (ii) Calculation of creditors … … … … … … … …[10] For Examiner’s Use www.theallpapers.com

9 © UCLES 2004 0452/02/M/J/04 [Turn over Sam supplies the following further information. $ Cash sales for the year 10000 Stock of goods for resale: At 1 April 2003 14000 At 31 March 2004 16000 (b) Using the relevant information given in 4(a) and above, prepare Sam’s Trading Account below. Sam Trading Account for the year ended 31 March 2004 … … … … … … … … … …[7] (c) (i) Calculate Sam’s rate of stock turnover for the year ended 31 March 2004. Show your workings. … … … …[4] (ii) Suggest one way in which knowing the rate of stock turnover will be useful to Sam. … … …[2] [TOTAL: 23] For Examiner’s Use www.theallpapers.com

10 © UCLES 2004 0452/02/M/J/04 5 Wood and Coe are business partners with an agreement which provides that: 1. Interest on partners’ capitals is payable at 10% per annum; 2. Coe is to receive a salary of $15000 per annum; 3. Profits and losses are to be shared: Wood
 Coe
 Balances remaining in the partnership’s books after preparation of the Trading Account for the year ended 30 April 2004 included the following. Dr Cr $ $ Capital accounts 1 May 2003 Wood 70000 Coe 20000 Fixed assets at cost 40000 Gross profit 58000 Discounts allowed and received 2000 1000 General expenses 4500 Rent 13000 Wages and salaries 14500 The following further information is available. 1. At 30 April 2004: $ General expenses accrued 500 Rent prepaid 3000 Wages due but unpaid 1500 2. Depreciation on fixed assets is to be provided at 20% on cost. (a) For the year ended 30 April 2004 prepare the partnership’s (i) Profit and Loss Account (ii) Appropriation Account For Examiner’s Use www.theallpapers.com

11 © UCLES 2004 0452/02/M/J/04 5 (a) (i) Wood and Coe Profit and Loss Account for the year ended 30 April 2004 … … … … … … … … … … … …[11] (ii) Appropriation Account for the year ended 30 April 2004 … … … … … … … … … … … …[9] For Examiner’s Use [Turn over www.theallpapers.com

12 © UCLES 2004 0452/02/M/J/04 (b) The partners are considering whether or not they should pay interest on their cash drawings from the business. State and explain two reasons why charging interest on drawings could be an advantage to the partnership. … … … … … …[4] [TOTAL: 24] University of Cambridge International Examinations is part of the University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. For Examiner’s Use www.theallpapers.com