Accounting Principles Paper Essay Example

Accounting Principles Paper Essay Example Accounting Principles Paper Essay Accounting Principles Paper Essay THIS IS A NEW SPECIFICATION ADVANCED SUBSIDIARY GCE FOI ACCOUNTING Accounting Principles Tuesday 2 June 2009 Morning RESOURCE BOOKLET To be given to candidates at the start of the examination Duration: 1 hour INSTRUCTIONS TO CANDIDATES The information required to answer questions 1-2 is contained within this Resource Booklet. Do not hand this Resource Booklet in at the end of the examination. It is not needed by the Examiner. INFORMATION FOR CANDIDATES This document consists of 4 pages. Any blank pages are indicated. OCR 2009 [1-4/500/7722] sp (NE) T7701 5/2 OCR is an exempt Charity Turn over 2 on 30 April 2009. Rent General expenses Insurance Salaries Electricity Capital Motor expenses Bad debts Drawings Debtors Creditors Bank Stock 10% Loan Loan interest Carriage outwards Commission received Purchases Sales Purchases returns Sales returns Discounts allowed Discounts received Provision for doubtful debts Equipment Provision for depreciation of equipment Motor vehicles Provision for depreciation of motor vehicles 4 000 6 ooo 3 300 14 000 2 ooo cr 44 000 200 6 200 3 800 2 600 3 600 15000 1 250 700 730 56 ooo 108 ooo 2 500 4 800 520 48 ooo 14 400 36 ooo 0800 200 150 The following information is also available. Included in the general expenses is an item of equipment purchased during the year for El 200. This item has not yet been included in the equipment account. A cheque for E800 received from a debtor has not yet been entered in the accounts. At 30 April 2009, loan interest owing amounted to E250; electricity owing was E380; whilst insurance was prepaid by E460. During the year Paula Redwood had withdrawn, for her personal use, goods costing O OCR 2009 The closing stock as at 30 April 2009 was valued at E4 200. Commission receivable of El 50 was owing to Paula Redwood at 30 April 2009. FOI 1/ RB Junog 3 (Vii) The provision for doubtful debts is to be provided for a specific debt of E200, plus 2% of the remaining debtors. (Viii) One half of the 10% loan is repayable during the year ending 30 April 2010, and the balance after that date. Depreciation is to be provided as follows: 10% per annum on cost using the straight line method. A full years depreciation is provided on all office equipment held on 30 April 2009, regardless of the date of purchase. 25% by the reducing balance method. There were no additions or disposals during the year. REQUIRED The Trading and Profit and Loss Account of Paula Redwood for the year ended 30 April 2009 and the Balance Sheet as at 30 April 2009. [47] Total marks [47] Raymond Bow prepared the following aged debtors schedule for his business on 31 March 2009. 2 1 400 1 880 months Peter White Janet Black John Green Susan Yellow Sunil Orange Jose Violet Bret Purple Carlos Blue 1 800 over 6 Amount due 5 400 5 880 160 2 620 300 190 4 680 2 200 1 600 21 730 Debtor 10 100 1 ooo 620 150 1 340 210 490 The provision for doubtful debts as at 1 April 2008 was El 890. Jose Violet has recently been declared bankrupt. Raymond Bow has received payment of EO. 25 in the E in final settlement of the debt. The final settlement has not yet been processed through the accounts. The remainder of the amount due is to be treated as a bad debt. Raymond BOWS policy for dealing with outstanding debtors is to: (i) months; make specific provisions for all the other debts outstanding for between four to six write off as bad debts all amounts outstanding for more than six months; make a general provision of 3% on all the remaining outstanding debts. FOI 1 IRB Junog 4 a) Prepare the following ledger accounts of Raymond Bow for the year ended 31 March 2009, showing where appropriate the closing entry to the final accounts at the end of the year. (i) Jose Violet. Bret Purple. Bad Debts. Provision for Doubtful Debts. (b) The Profit and Loss Account extract for Bad Debts and Provision for Doubtful Debts for the year ended 31 March 2009. (c) The Balance Sheet extract for Debtors as at 31 March 2009. (d)* Discuss the reasons why a business needs to monitor and control its debtors. (e) Explain two factors used in determining the provision for doubtful debts. 10] Total marks [33] Copyright Information OCR is committed to seeking permission to reproduce all third-party content that it uses in its assessment materials. OCR has attempted to identify and contact all copyright holders whose work is used in this paper. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced in the OCR Copyright Acknowledgements Booklet. This is produced for each series of examinations, is given to all schools that receive assessment material and is freely available to download from our public website (www. r. org. uk) after the live examination series. If OCR has unwittingly failed to correctly acknowledge or clear any third-party content in this assessment material, OCR will be happy to correct its mistake at the earliest possible opportunity. For queries or further information please contact the Copyright Team, First Floor, 9 Hills Road, Cambridge CB2 1 PB. OCR is part of the Cambridge Assessment Group; Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. OCR 2009 FOI 1 IRB Junog