2 3

Answer all questions. 2 Lim runs a business, Polka Dots Party Planners, which provides planning for parties
and events.
1 Tiru is a trader. His business maintains full accounting records.
REQUIRED
REQUIRED
(a) Name the accounting theory which must be applied when accounting for the sale
(a) State the four stages of the accounting cycle. of goods or the provision of services.
…………………………………………………………………………………………… ……….…………………………...……………………………………………………[1]
…………………………………………………………………………………………… Polka Dots Party Planners’ financial year ends 31 July. The following ledger account
has been provided at 31 July 2023.
……………………………….………………………………………………….……..[4]
Service fee revenue account
(b) Complete the following table to name the source document which Tiru would use Date Particulars Dr ($) Cr ($) Bal ($)
to record each of the following transactions. 2022
Aug 1 Service fee revenue received in advance 400 400 Cr
Transaction Source document
Dec 31 Trade receivables 7 000 7 400 Cr
Purchase of furniture on credit 2023
Apr 30 Cash at bank 6 000 13 400 Cr
Settling a trade payable amount by cheque
Jul 31 Service fee revenue received in advance 1 400 12 000 Cr
Notifying a credit customer of an undercharge 31 Income summary 12 000 -
[3]
REQUIRED
On 31 January 2023, Tiru introduced his personal van valued at $45 000 into the
(b) Interpret the entries in the service fee revenue account on:
business.
(i) 31 December 2022
REQUIRED
………………………………………………………………………………………
(c) Prepare the journal entries to record this transaction. A narration is required.
………………………………………………………………………………………
Journal
Date Particulars Dr ($) Cr($)
………………………………………………………………………………………

……………………………….…………………………………………………..[1]

(ii) 31 July 2023

………………………………………………………………………………………

………………………………………………………………………………………

[3] ………………………………………………………………………………………

[Total: 10] ……………………………….…………………………………………………..[1]

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(c) Analyse the effect of not making an adjustment for service fee revenue received Polka Dots Party Planners also rents out part of the business premises. The rental
in advance on 31 July 2023 on: income received during the year ended 31 July 2023 was $ 5 000. There were no
amounts outstanding at 1 August 2022. The tenant owed $600 as at 31 July 2023.
(i) Profit for the year
REQUIRED
………………………………………………………………………………………
(e) Prepare an extract of the statement of financial performance for the year ended
……………………………….…………………………………………………..[1] 31 July 2023 to show the amounts to be included for service fee revenue, rental
income and salaries expense. Refer to parts (b) and (d) for other relevant
(ii) Statement of financial position information.

………………………………………………………………………………………
Polka Dots Party Planners
……………………………….…………………………………………………..[2] Statement of financial performance for the year ended 31 July 2023 (extract)

Polka Dots Party Planners has also provided the following ledger account. $
Service fee revenue ……………….
Salaries expense account
Date Particulars Dr ($) Cr ($) Bal ($) Other income
2022 Rental income ……………….
Aug 1 Prepaid salaries expense 200 200 Dr
2023 Less: Other expenses
Feb 15 Cash at bank 700 Salaries expense ……………….
Jul 31 Salaries expense payable 80
31 Income summary ? [3]

REQUIRED [Total: 10]

(d) Calculate the amount of salaries expense to be transferred to the income

summary on 31 July 2023. Show all workings.

………………………….…………………………………………………………………

……………………………….………….……………………………………………..[1]

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3 Suhana owns a catering business and she purchased a delivery vehicle for $70 000 Over the year ended 30 Jun 2023, Suhana’s catering business incurred some
on 31 May 2022. Her financial year ends 30 June. The following is the accumulated expenditure.
depreciation of motor vehicle account which relates to the delivery vehicle. A full year’s
depreciation is charged in the year of purchase. REQUIRED

Accumulated depreciation of motor vehicle account (d) Classify the expenditure in the following table by placing a tick (√) in the
Date Particulars Dr ($) Cr ($) Bal ($) appropriate column.
2022
Jun 30 Depreciation of motor vehicle 7 000 7 000 Cr
Jul 1 Bal b/d 7 000 Cr
2023 Capital expenditure Revenue expenditure
Jun 30 Depreciation of motor vehicle 7 000 14 000 Cr
Jul 1 Bal b/d 14 000 Cr Payment for vehicle insurance

Upgrading vehicle seat covers

REQUIRED from fabric to leather seats
Tire replacement due to wear
(a) State the depreciation method employed by Suhana. and tear
Washing of tablecloths after
……………………………….………….……………………………………………..[1] events
Purchase of tables and chairs
(b) Calculate the annual rate of depreciation applied. Show all workings. for catering events
[5]
………………………….…………………………………………………………………
[Total: 10]
……………………………….………….……………………………………………..[1]

(c) State an alternative method of deprecation that Suhana could have employed.
Calculate the depreciation expense for motor vehicle for each of the two years
using the alternative method if Suhana had depreciated her motor vehicle at a
rate of 20% per annum.

Name of alternative method:…………………………………….………………….[1]

Depreciation expense for the year ended

30 Jun 2022 30 Jun 2023
$ $

…………………………………………… …………………………………………

…………………………………………… …………………………………………

…………………………...……………[1] ………………………………………[1]

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4 Gary sells goods to all his customers on credit. On 1 March 2023, Debbie owed Gary (b) Give two reasons why the cheque on March 25 might have been returned
$ 3 500. The following information relates to Debbie’s account in the books of Gary’s ‘unpaid’ by the bank.
business in the month of March 2023.
………………………………………………………………………….…………………

2023 ………………………………………………………………….…………………………
Mar 3 Gary sold goods on credit to Debbie at a list price of $4 400, less 20% trade
discount. …………………………………………………………………….………………………
8 Debbie returned damaged goods, at a list price of $300, to Gary. The goods
were bought on 3 March. ……………………………….…………………………….…………………………..[2]
22 Debbie issued Gary a cheque of $5 600 after being offered a cash discount
of $400. [Total: 10]
25 The cheque from Debbie on 22 March was returned as ‘unpaid’ by the bank.

REQUIRED

(a) Prepare Debbie’s account in Gary’s books for the month of March 2023. Bring
down the balance on 1 April 2023.

Trade receivable – Debbie account

Date Particulars Dr ($) Cr ($) Bal ($)

[8]
End of paper

SMSS 4N PRELIMINARY EXAMINATION 2023 SMSS 4N PRELIMINARY EXAMINATION 2023