2020 O Level POA Answers Paper 2
Makiet Pte Ltd
Statement of financial performance for the year ended 31 August 2019
| $ | $ | |
| Sales revenue | 425,725 | |
| Less: sales returns | 18,015 | |
| Net sales revenue | 407,260 | |
| Less : cost of sales | 226,930 | |
| Gross profit | 180,330 | |
| Less : expenses | ||
| Wages and salaries | 72,800 | |
| Rent | 38,400 | |
| General expense | 20,870 | |
| Selling expense | 8,225 | |
| Depreciation of equipment | 34,500 | |
| Depreciation of motor vehicle | 7,360 | |
| Reversal of impairment loss on trade receivables | (235) | |
| Impairment loss on inventory | 1990 | 183,910 |
| Loss for the year | (3,580) |
Makiet Pte Ltd
Statement of financial performance for the year ended 31 August 2019
| Assets | $ | $ | $ |
| Non-current asset | cost | Acc. dep. | N.B.V |
| Motor vehicle | 57,500 | 28,060 | 29,440 |
| Equipment | 345,000 | 205,000 | 140,000 |
| 169,440 | |||
| Current assets | |||
| Trade receivables | 43,950 | ||
| Less: allowance for impairment of trade receivables | (985) | ||
| Net trade receivables | 42,950 | ||
| Inventory | 33,310 | ||
| Prepaid rent | 9,600 | ||
| Total current assets | 85,875 | ||
| Total assets | 255,315 | ||
| Equity and liabilities | |||
| Issued share capital , 150,000 ordinary shares | 150,000 | ||
| Retained earnings | 32,020 | ||
| Total equity | 182,020 | 182,020 | |
| Current liabilities | |||
| Accrued general expense | 570 | ||
| Short term borrowing | 8,700 | ||
| Trade payable | 34,025 | ||
| Total current liabilities | 43,295 | ||
| Total equity and liabilities | 255,315 |
(a)
-Act as an independent check on all individual trade receivable accounts. [1]
-Provide a summary of all the individual trade receivable accounts. [1]
2(b)
Trade receivable control account
| Date | Particulars | Dr | Cr | Bal |
| 2020 | $ | $ | $ | |
| Jun 1 | Balance b/d | 5,996 Dr | ||
| Jun 30 | Discount allowed | 1,824 | ||
| Sales returns | 3,750 | |||
| Interest income | 846 | |||
| Trade payable control | 1,650 | |||
| Cash at bank | 9,527 | |||
| Cash at bank (dishonoured cheque ) | 292 | |||
| Sales revenue | 16,865 | |||
| Jul 1 | Balance b/d | 7,248 Dr |
Q2c)
Offset entry is the entry that allows a party and the business who is a receivable and payable to contra
its balances in order to obtain a net position. This will avoid the hassle of making payments for the
amount owing and amount owed between the business and the party involved.
(d)(i) and (d)(ii) General journal
(a)
Adjusted cash at bank account
| Date | Particulars | Dr | Cr | Bal |
| 2020 | $ | $ | $ | |
| Apr 30 | Balance b/d | 5,517 Dr | ||
| Trade receivables – M lin | 1,524 | |||
| Rent expense | 850 | |||
| Bank charges | 25 | |||
| May 1 | Balance b/d | 5,806 Dr |
(b)
Bank reconciliation statement as at 30 Apr 2020
| Credit balance as per bank statement | 4,577 | |
| Add: cheques not yet credited | ||
| Sales revenue | 1,926 | |
| Add: Error in recording | 200 | |
| Less: cheques not yet presented | ||
| Tung | 897 | |
| Adjusted cash at bank | 5,806 |
(c)
-To prevent fraud [1]
-To reconcile for the differences between cash at bank and bank statement balance in order to find the
accurate cash at bank amount [1]
(d)
Cash at bank deposited in bank is viewed as an asset by the company [1] while Cash at bank received
from the company is viewed as a liability by the bank. [1]
