Cambridge IGCSE Accounting 0452 — 2019 Feb/March Paper 1 · Variant 2

* 9 0 5 3 7 2 3 0 2 9 * This document consists of 20 printed pages. DC (RW) 160949/4 © UCLES 2019 [Turn over ACCOUNTING 0452/12 Paper 1 February/March 2019 1 hour 45 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. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. Answer all questions. 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. 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. Cambridge Assessment International Education Cambridge International General Certificate of Secondary Education

2 0452/12/F/M/19 © UCLES 2019 There are 10 parts to Question 1. For each of the parts (a) to (j) there are four possible answers, A, B, C and D. Choose the one you consider correct and place a tick (3) in the box to indicate the correct answer. 1 (a) Faraz buys and sells new and used motor vehicles. He purchased a used motor vehicle from Tahir for $7000 which he paid for by cheque. How would Faraz record this transaction? account debited account credited A motor vehicles bank B motor vehicles Tahir C purchases bank D purchases Tahir [1] (b) Kala had the following assets and liabilities on 1 February 2019. $ $ Assets Non-current assets 48 000 Inventory 14 000 Trade receivables 16 500 78 500 Liabilities Trade payables 17 000 Bank overdraft 9 100 26 100 On 2 February she paid Suki, a credit supplier, $1950 by cheque, after deducting a cash discount of $50. What was Kala’s capital after this transaction? A $50 400 B $50 450 C $52 350 D $52 450 [1]

3 0452/12/F/M/19 © UCLES 2019 [Turn over (c) Which tasks would be carried out by a book-keeper? 1 analysing business results 2 maintaining a cash book 3 preparing financial statements 4 writing up ledger accounts A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4 [1] (d) Zara provided the following information for the year ended 31 December 2018. $ Amount owing by credit customers 1 January 2018 2 250 31 December 2018 1 500 Cheques paid by credit customers 14 220 Discount allowed to credit customers 80 Goods returned by credit customers 2 150 How much were the credit sales for the year? A $11 400 B $12 900 C $15 700 D $17 200 [1] (e) Which statement about a bank reconciliation statement is correct? A It includes items recorded by the trader not yet recorded by the bank. B It is a copy of the trader’s account as it appears in the books of the bank. C It is sent by the bank to the trader at regular intervals. D It summarises the bank columns in a trader’s cash book. [1]

4 0452/12/F/M/19 © UCLES 2019 (f) A trader provided the following information for his financial year. $ Revenue for the year 60 000 Inventory at the start of the year 6 000 Purchases for the year 44 000 The mark-up is 25%. What was the value of the inventory at the end of the year? A $2000 B $5000 C $12 000 D $15 000 [1] (g) ‘Financial statements must be free from errors and bias.’ Which accounting objective is this statement describing? A comparability B reliability C relevance D understandability [1] (h) A trader provided the following information. $ Cost of sales 48 000 Gross profit 32 000 Expenses 17 000 What was the profit for the year as a percentage of revenue? A 15.46% B 18.75% C 30.61% D 35.42% [1]

5 0452/12/F/M/19 © UCLES 2019 [Turn over (i) Which will increase a trader’s working capital? A delaying payment to credit suppliers B obtaining a short-term bank loan C selling inventory at cost price D selling non-current assets [1] (j) Which accounting principle requires profit to be recognised as earned when the legal ownership of goods passes to the purchaser? A going concern B money measurement C prudence D realisation [1] [Total: 10]

6 0452/12/F/M/19 © UCLES 2019 2 Gurdeep divides his ledger into three sections – nominal (general) ledger, sales ledger and purchases ledger. He prepares monthly control accounts for his sales and purchases ledgers. REQUIRED (a) State one advantage of dividing the ledger into these three sections. … … [1] (b) Give two examples of accounts which may appear in Gurdeep’s nominal (general) ledger. 1 … 2 … [2] (c) Complete the table by placing a tick (3) in the correct column to indicate where each item would appear in Gurdeep’s purchases ledger control account. If the item does not appear place a tick in the ‘no entry’ column. debit credit no entry opening balance owed to credit suppliers credit purchases cash purchases cash refund received from a credit supplier cash discount received from credit suppliers trade discount received from credit suppliers interest charged on an overdue account contra entry to sales ledger control account [8]

7 0452/12/F/M/19 © UCLES 2019 [Turn over (d) Prepare an entry in Gurdeep’s journal to write off as irrecoverable a debt of $54 owed by Sasha. A narrative is required. Gurdeep Journal Debit $ Credit $ … … … … … … … … … … … … [3] (e) State the meaning of the term ‘bad debt recovered’. … … [1] (f) Name two accounting principles Gurdeep is applying by maintaining a provision for doubtful debts. 1 … 2 … [2] (g) Suggest two reasons why Gurdeep’s suppliers would be interested in his financial statements. 1 … … 2 … … [2] (h) Name two other interested parties who may wish to see Gurdeep’s financial statements. 1 … 2 … [2] [Total: 21]

8 0452/12/F/M/19 © UCLES 2019 3 Sarah maintains a petty cash book using the imprest system. The imprest amount is $250 and this is restored from the bank account on the first day of each month. REQUIRED (a) State two advantages of the imprest system of petty cash. 1 … … 2 … … [2] Sarah had $38 in the petty cash box on 1 January 2019. The following transactions took place in January 2019. $ January 1 Restored petty cash to the imprest amount ? 6 Cleaner repaid overpayment made in December 10 8 Paid Eva, a credit supplier 62 13 Purchase of refreshments for office 9 18 Paid Olivia, a credit supplier 43 21 Paid for taxi fare 14 24 Cost of flowers for office 10 31 Paid cleaner’s wages 80 REQUIRED (b) Enter the above transactions in Sarah’s petty cash book on the page opposite. Balance the petty cash book and bring down the balance on 1 February 2019. [11]

9 0452/12/F/M/19 © UCLES 2019 [Turn over Sarah Petty Cash Book Total received $ Date Details Total paid $ Office expenses $ Travel $ Cleaning $ Ledger accounts $ … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … …

10 0452/12/F/M/19 © UCLES 2019 (c) Show the entries which would be made in the cleaning account in January 2019. It is not necessary to total or balance the account. Sarah Cleaning account Date … … … Details … … … $ … … … Date … … … Details … … … $ … … … [2] (d) State how the double entry would be completed for the items recorded in the ledger accounts column of the petty cash book. … … … [2] (e) (i) State the amount which would be received on 1 February when the petty cash is restored to the imprest amount. … [1] (ii) State the double entry which would be made on 1 February for restoring the imprest amount. debit credit … … [2] [Total: 20]

11 0452/12/F/M/19 © UCLES 2019 [Turn over PLEASE TURN OVER

12 0452/12/F/M/19 © UCLES 2019 4 The W Athletics Club had the following assets and liabilities on 1 March 2018. $ Balance at bank 4105 Equipment at valuation 4500 Subscriptions accrued 550 Accumulated fund 6880 Loan 2000 Subscriptions prepaid 275 The treasurer prepared the following receipts and payments account for the year ended 28 February 2019. W Athletics Club Receipts and Payments Account for the year ended 28 February 2019 $ $ Opening bank balance 4 105 Repayment of loan 2 000 Subscriptions received 5 940 Loan interest 100 Equipment purchased 1 650 General expenses 890 Rent and insurance 4 280 Net cost of competitions 310 Closing bank balance 815 10 045 10 045 The following additional information is available at 28 February 2019. $ Insurance prepaid 240 General expenses accrued 30 Subscriptions prepaid 165 Equipment at valuation 5900 REQUIRED (a) Calculate the subscriptions for the year ended 28 February 2019. … … … … … … … [5]

13 0452/12/F/M/19 © UCLES 2019 [Turn over (b) Prepare the income and expenditure account for the year ended 28 February 2019. W Athletics Club Income and Expenditure Account for the year ended 28 February 2019 … … … … … … … … … … … … … [9] (c) (i) List two items included in the receipts and payments account which should not appear in the income and expenditure account. 1 … 2 … [2] (ii) List two items included in the income and expenditure account which should not appear in the receipts and payments account. 1 … 2 … [2] (d) State the amount of subscriptions that should be included in the statement of financial position at 28 February 2019. State whether it is an asset or a liability. Amount … Asset or liability … [2] (e) State the amount of the accumulated fund that should appear in the statement of financial position at 28 February 2019. … [1] [Total: 21]

14 0452/12/F/M/19 © UCLES 2019 5 Hari is a manufacturer of food for farm animals. REQUIRED (a) State the meaning of the following terms used in the financial statements of a manufacturing business. (i) Prime cost … … [1] (ii) Cost of production … … [1] (iii) Work in progress … … [1] Hari’s financial year ends on 31 December. He provided the following information for the year ended 31 December 2018. $ Purchases of raw materials 142 500 Carriage on raw materials 1 680 Factory wages – direct 86 250 indirect 42 570 Factory rent, rates and insurance 14 000 Factory machinery at cost 95 000 Provision for depreciation of factory machinery 1 January 2018 34 200 Factory loose tools at valuation 1 January 2018 7 140 Additional information 1 The inventory of raw materials at 1 January 2018 was $13 500 which was $700 lower than the inventory of raw materials on 31 December 2018. 2 The inventory of work in progress at 1 January 2018 was $15 100 which was $900 higher than the inventory of work in progress at 31 December 2018. 3 At 31 December 2018 factory insurance prepaid amounted to $690 and factory rent, $1500, was accrued. 4 The factory machinery is being depreciated at 20% per annum using the reducing (diminishing) balance method. 5 The factory loose tools were valued at $6310 on 31 December 2018.

15 0452/12/F/M/19 © UCLES 2019 [Turn over REQUIRED (b) Prepare the manufacturing account for the year ended 31 December 2018. Hari Manufacturing Account for the year ended 31 December 2018 … … … … … … … … … … … … … … … … … … … … [13]

16 0452/12/F/M/19 © UCLES 2019 The following information is available. $ Inventory of finished goods on 1 January 2018 24 000 Inventory of finished goods on 31 December 2018 22 200 Cost of goods sold for the year ended 31 December 2018 302 800 REQUIRED (c) Calculate the rate of inventory turnover of finished goods. The calculation should be correct to two decimal places. … … … … [2] (d) (i) Complete the following sentence. Hari should always value his inventory at the lower of … and … [1] (ii) Name one accounting principle Hari is applying by valuing his inventory on this basis. … [1] (e) Complete the table by placing a tick (3) in the correct column to indicate the effect of Hari overvaluing his inventory of raw materials at 31 December 2018. The first one has been completed as an example. overstated understated Cost of materials consumed for the year ended 31 December 2018 3 Cost of production for the year ended 31 December 2018 Gross profit for the year ended 31 December 2018 Current assets at 31 December 2018 Profit for the year ending 31 December 2019 [4]

17 0452/12/F/M/19 © UCLES 2019 [Turn over (f) Suggest two ways in which Hari could increase his gross profit. 1 … 2 … [2] [Total: 26]

18 0452/12/F/M/19 © UCLES 2019 6 The financial year of B Limited ends on 31 December. The company obtained its long-term finance from the issue of 5% debentures, 6% preference shares and ordinary shares. REQUIRED (a) State the meaning of the following terms used in connection with limited companies. (i) Called-up share capital … … [1] (ii) Paid-up share capital … … [1] (iii) Limited liability … … [1] (b) Complete the table by placing a tick (3) in the correct column to select the source of long-term finance to which each statement relates. The first one has been completed as an example. debentures preference shares ordinary shares The holders receive dividend before ordinary share dividend. 3 They are a long-term loan. The holders are entitled to vote at the annual general meeting. The holders receive a variable rate of dividend. The holders receive a fixed rate of dividend. If the company is wound up the holders are repaid after all other investors. [5]

19 0452/12/F/M/19 © UCLES 2019 [Turn over (c) State two similarities between debentures and preference shares. 1 … … 2 … … [2] (d) Complete the table by placing tick(s) (3) in the correct columns to indicate where each of the following would be included in the financial statements of B Limited at 31 December 2018. The first one has been completed as an example. Income statement Statement of changes in equity Statement of financial position No entry Half year interest on debentures paid on 1 July 2018 3 Half-year interest on debentures owing on 31 December 2018 Payment of interim ordinary share dividend on 1 July 2018 Payment of final ordinary share dividend for the year ended 31 December 2017 Proposed ordinary share dividend at 31 December 2018 Creation of general reserve [7] The directors of B Limited are hoping to expand the business and have estimated that $30 000 will be required. One director has proposed that the bank should be asked to provide overdraft facilities up to $30 000. Another director has proposed making a further issue of 5% debentures. REQUIRED (e) Suggest two reasons why the proposal to ask for overdraft facilities should not be accepted. 1 … … 2 … … [2]

20 0452/12/F/M/19 © UCLES 2019 Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at www.cambridgeinternational.org after the live examination series. Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge. (f) Complete the table to indicate how each value would change if an issue of 5% debentures was made on 1 January 2019. Where there is no effect place a tick (3) in the column headed ‘no effect’. The first one has been completed as an example. increase $ decrease $ no effect total of current assets at 1 January 2019 30 000 total equity at 1 January 2019 total of non-current liabilities at 1 January 2019 total profit for the year ending 31 December 2019 [3] [Total: 22]

This document consists of 16 printed pages. © UCLES 2019 [Turn over Cambridge Assessment International Education Cambridge International General Certificate of Secondary Education ACCOUNTING 0452/12 Paper 1 March 2019 MARK SCHEME Maximum Mark: 120 Published 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 International will not enter into discussions about these mark schemes. Cambridge International is publishing the mark schemes for the March 2019 series for most Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level components.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 2 of 16 Generic Marking Principles These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these marking principles. GENERIC MARKING PRINCIPLE 1: Marks must be awarded in line with: • the specific content of the mark scheme or the generic level descriptors for the question • the specific skills defined in the mark scheme or in the generic level descriptors for the question • the standard of response required by a candidate as exemplified by the standardisation scripts. GENERIC MARKING PRINCIPLE 2: Marks awarded are always whole marks (not half marks, or other fractions). GENERIC MARKING PRINCIPLE 3: Marks must be awarded positively: • marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate • marks are awarded when candidates clearly demonstrate what they know and can do • marks are not deducted for errors • marks are not deducted for omissions • answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the question as indicated by the mark scheme. The meaning, however, should be unambiguous. GENERIC MARKING PRINCIPLE 4: Rules must be applied consistently e.g. in situations where candidates have not followed instructions or in the application of generic level descriptors.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 3 of 16 GENERIC MARKING PRINCIPLE 5: Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may be limited according to the quality of the candidate responses seen). GENERIC MARKING PRINCIPLE 6: Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or grade descriptors in mind.

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 4 of 16 Question Answer Marks 1(a) C 1 1(b) D 1 1(c) C 1 1(d) C 1 1(e) A 1 1(f) A 1 1(g) B 1 1(h) B 1 1(i) D 1 1(j) D 1

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 5 of 16 Question Answer Marks Glossary (b) A 52 400 – (1950 + 50) B 52 400 – 1950 C 52 400 – 50 D 52 400 + 50 (d) A (14 220 + 80 + 1500) – (2250 + 2150) B (2250 +14 220 + 80) – (2150 +1500) C (14 220 + 80 + 2150 + 1500) – 2250 D (14 220 +80 +2150 +2250) – 1500 (f) A GP = 25/125 × 60 = 12 C of S = 48 Opening inventory + Purchases = 50 Closing inventory = 2 B GP = 25% × 60 = 15 C of S = 45 Opening inventory + Purchases = 50 Closing inventory = 5 C 25/125 × 60 = 12 D 25% × 60 = 15 (h) Profit = 32 – 17 = 15 A 15/(48 + 32 + 17) × 100 = 15.46% B 15/(48 + 32) × 100 = 18.75% C 15/(32 + 17) × 100 = 30.61% D 17/48 × 100 = 35.42 %

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 6 of 16 Question Answer Marks 2(a) Work can be shared amongst several people Easier for reference as the same type of accounts are kept together Easier to introduce checking procedures May reduce fraud Accept other valid points. Any 1 advantage (1) 1 2(b) Any asset, liability, revenue or expense account (i.e. any account apart from trade payables and trade receivables) Any 2 accounts (1) each 2 2(c) debit credit no entry opening balance owed to credit suppliers 9(1) credit purchases 9(1) cash purchases 9(1) cash refund received from credit supplier 9(1) cash discount received from credit suppliers 9(1) trade discount received from credit suppliers 9(1) interest charged on overdue account 9(1) contra entry to sales ledger control account 9(1) 8

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 7 of 16 Question Answer Marks 2(d) Gurdeep Journal Debit $ Credit $ Bad debts (1) 54 Sasha (1) 54 Debt owed by Sasha written off as irrecoverable (1) 3 2(e) Money received from a credit customer in payment/part payment of a debt after it has been written off as a bad debt. (1) 1 2(f) Prudence Accruals (matching) Consistency Any 2 principles (1) each 2 2(g) Assessment of liquidity position/check whether he can meet his debts on time Identify how long it takes him to pay credit suppliers Identify future prospects of the business Establish a credit limit Accept other valid reasons. Any 2 reasons (1) each 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 8 of 16 Question Answer Marks 2(h) Bank manager Lender Manager Employee Government Competitor Take-over bidder Potential partner Investor Customer Owner Or other suitable interested parties but NOT suppliers (which are in (g)) Any 2 parties (1) each 2 Question Answer Marks 3(a) Allows chief cashier to control/limit/keep track of petty cash expenditure The cash remaining and the vouchers received should equal the imprest amount Can help to reduce/prevent fraud Accept other suitable advantage Any 2 advantages (1) each 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 9 of 16 Question Answer Marks 3(b) Sarah Petty Cash Book Total received $ Date Details Total paid $ Office expenses $ Travel $ Cleaning $ Ledger accounts $ 2019 38 Jan 1 Balance b/d (1) 212 Bank (1) 10 6 Cleaner repayment (1) 8 Eva (1) 62 62 13 Refreshments (1) 9 9 18 Olivia (1) 43 43 21 Taxi fare (1) 14 14 24 Flowers 10 10 31 Cleaner (1) 80 80 218 19 14 80 105 Balance c/d 42 260 260 2019 42 Feb 1 Balance b/d (1)OF + (1) dates + (1) OF totalling analysis columns 11 3(c) Sarah Cleaning account Date Details $ Date Details $ (2019) (2019) Jan 31 Petty cash 80 Jan 31 Petty cash 10 (1) (1) 2 3(d) Debit Eva’s account with $62 (1) Debit Olivia’s account with $43 (1) 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 10 of 16 Question Answer Marks 3(e)(i) 250 – 42 OF = 208 (1)OF 1 3(e)(ii) debit credit petty cash (1) bank (1) 2 Question Answer Marks 4(a) $ Subscriptions received 5 940 (1) Add Opening prepayment 275 (1) 6 215 Less Opening accrual 550 (1) 5 665 Less Closing prepayment 165 (1) Subscriptions for the year 5 500 (1)OF Alternative presentation Subscriptions account Date Details $ Date Details $ 2018 2018 Mar 1 Balance b/d (1) 550 Mar 1 Balance b/d (1) 275 2019 2019 Feb 28 Income and Expenditure (1)OF 5 500 Feb 28 Bank (1) 5 940 Balance c/d (1) 165 No aliens for o/f 6 215 6 215 5

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 11 of 16 Question Answer Marks 4(b) W Athletics Club Income and Expenditure Account for the year ended 28 February 2019 $ $ Income Subscriptions 5 500 (1)OF Expenditure (Loan) interest 100 (1) General expenses (890 (1) + 30 (1)) 920 Rent and insurance (4280 (1) – 240 (1)) 4 040 (Net cost of) competitions 310 (1) Depreciation of (equipment) (4500 + 1650 – 5900) 250 (1) 5 620 120 (1)OF Deficit 9 4(c)(i) Bank balance (opening or closing) Repayment of loan Purchase of equipment Insurance prepaid Subscriptions prepaid (at 28 February 2019) Any 2 items (1) each 2 4(c)(ii) Deficit Depreciation of equipment Accrued general expenses (at 28 February 2019) Any 2 items (1) each 2 4(d) $165 (1) Liability (1) 2 4(e) $6880 – $120 OF = $6760 (1)OF 1

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 12 of 16 Question Answer Marks 5(a)(i) The cost of the essentials necessary for production OR The total of direct materials, direct labour and direct expenses 1 5(a)(ii) The total cost of manufacturing the finished products OR The prime cost plus factory overheads 1 5(a)(iii) The goods which are partially completed 1 5(b) Hari Manufacturing Account for the year ended 31 December 2018 $ $ Cost of materials consumed Opening inventory of raw materials 13 500 (1)* both inventories Purchases of raw materials 142 500 Carriage on raw materials 1 680 144 180 (1) 157 680 Closing inventory of raw materials 14 200 * 143 480 Direct factory wages 86 250 (1) Prime cost 229 730 (1)OF Factory overheads Indirect factory wages 42 570 (1) Factory rent, rates and insurance (14 000 (1) + 1500 (1) – 690 (1)) 14 810 Depreciation – Factory machinery (20% × (95 000 – 34 200)) 12 160 (1) Loose tools (7140 – 6310) 830 (1) 70 370 300 100 (1)OF Opening work in progress 15 100 (1)* both inventories 315 200 Closing work in progress 14 200 * Cost of production 301 000 (1)OF 13

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 13 of 16 Question Answer Marks 5(c) 302800 (24000 22200) / 2 + } } whole formula (1) = 13.1 times(1) 2 5(d)(i) Cost Net realisable value 1 5(d)(ii) Prudence OR Accruals (matching) 1 5(e) overstated understated Cost of materials consumed for the year ended 31 December 2018 9 Cost of production for the year ended 31 December 2018 9 (1) Gross profit for the year ended 31 December 2018 9 (1) Current assets at 31 December 2018 9 (1) Profit for the year ending 31 December 2019 9 (1) 4 5(f) Increase selling price Reduce cost of production/reduce factory overheads/reduce direct wages/reduce cost of materials consumed/reduce cost of sales Or other suitable suggestion Any 2 suggestions (1) each 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 14 of 16 Question Answer Marks 6(a)(i) The total amount of capital a company has requested from its shareholders 1 6(a)(ii) That part of the called-up capital for which a company has actually received the money from its shareholders 1 6(a)(iii) The shareholders of a company are only liable for the debts of the company up to the amount they have agreed to pay for their shares 1 6(b) debentures preference shares ordinary shares The holders receive dividend before ordinary share dividend. 9 They are a long-term loan. 9(1) The holders are entitled to vote at the annual general meeting. 9(1) The holders receive a variable rate of dividend. 9(1) The holders receive a fixed rate of dividend. 9(1) If the company is wound-up the holders are repaid after all other investors. 9(1) 5 6(c) Get a fixed return Have priority over ordinary shareholders for the interest/dividend Have priority over ordinary shareholders in a winding-up Neither have voting rights Not members of the company Or other suitable comment Any 2 comments (1) each 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 15 of 16 Question Answer Marks 6(d) Income statement Statement of changes in equity Statement of financial position No entry Half year interest on debentures paid on 1 July 2018 9 Half year interest on debentures owing at 31 December 2018 9(1) 9(1) Payment of interim ordinary share dividend on 1 July 2018 9(1) Payment of final ordinary share dividend for the year ended 31 December 2017 9(1) Proposed ordinary share dividend at 31 December 2018 9(1) Creation of general reserve 9(1) 9(1) 7 6(e) Bank overdraft not suitable for long-term borrowing Bank may require overdraft to be repaid at short notice Interest may be more than that on a loan Overdraft facility may be withdrawn at short notice Or other suitable comments Any 2 comments (1) each 2

0452/12 Cambridge IGCSE – Mark Scheme PUBLISHED March 2019 © UCLES 2019 Page 16 of 16 Question Answer Marks 6(f) increase $ decrease $ no effect total of current assets at 1 January 2019 30 000 total equity at 1 January 2019 9(1) total of non-current liabilities at 1 January 2019 30 000 (1) total profit for the year ending 31 December 2019 1 500 (1) 3