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Answer All Questions. All Workings Must Be Shown.

Question 1

An extract of the Trial Balance of Mary Traders as at 31 December 2014 is shown below:

Mary Traders
Extract of Trial Balance as at 31 December 2014
Dr ($) Cr ($)
Allowance for impairment of
accounts receivable 59,000
Consultancy fees 49,000
Prepaid insurance expense 14,850
Accounts receivable 195,000
Telephone expense 1,350

Additional information:

(i) Telephone expense amounting to $200 for the month of December 2014 will only be
paid on 10 January 2015.

(ii) Consultancy fees amounting to $49,000 were received in November 2014 for services
provided from 1 October 2014 to 30 April 2015.

(iii) Consultancy services provided to clients amounting to $6,000 for the month of
December 2014 had neither been invoiced nor recorded.

(iv) Prepaid fire insurance expense amounting to $14,850 was paid for insurance coverage
from 1 August 2014 to 30 April 2015.

(v) Accounts receivable, Tom who owed the business $7,200 was declared bankrupt in
November 2014. The business decided to write it off as bad debts at year end. Tom was
included in the list of allowance for impairment of accounts receivable.

(vi) It was decided to increase the balance for the Allowance for Impairment of Accounts
Receivable to $61,800 at year end.


(a) Prepare the necessary general journal entries for Mary Traders for the year ended 31
December 2014. (Ignore narrations).

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(b) Assuming that the net profit before adjustment for the year ended 31 December 2014
was $42,600, calculate the final net profit/(loss) after taking into account all the above

(c) Prepare an extract of the Statement of Financial Position for Mary Traders as at 31
December 2014, showing the Current Assets and Current Liabilities sections only
and with sub-totals.

Question 2

(a) James Trading has an annual turnover of $600,000. During the month of January
2014, the business purchased $50,000 of goods on credit from a GST registered trader
and sold $25,000 of goods on credit locally. All transactions are exclusive of GST.


Prepare journal entries for the above transactions for James Trading. (Narration is not
(4 marks)

(b) Chong Traders is a GST registered trader. During the month of February 2014, the
business purchased goods amounting to $101,650 (inclusive of GST) and sold goods
amounting $160,500 (inclusive of GST) locally. The business also exported goods to
Vietnam amounting to $300,000 during the month of February 2014. All transactions
were settled by cash.


(i) Prepare journal entries for the above transactions for Chong Traders.
(Narration is not required).

(ii) Prepare the GST Control account (in T-format) for the month ended 28
February 2014 for Chong Traders. Balance and close the account.

Question 3

Moody Trader had a machine M1 costing $300,000, which was bought on 1 August 2010.
Machine M1 broke down frequently and as a result, it was traded-in for a newer machine M2
on 30 November 2013. Machine M2 cost $430,000 and the remaining outstanding balance
for its purchase was paid in cash. The loss on disposal of Machine M1 was $9,160.

On 1 January 2014, another machine M3 was bought on credit with the following payments:

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Cost price of machine M3 $200,000
Installation cost 15,000
Insurance during delivery 10,000
Annual maintenance 30,000

Moody Trader had the following account balances on 1 March 2013:

Cost $990,000
Accumulated depreciation 550,000

Depreciation on all machines is provided at 20%, using the reducing balance method on a
monthly basis. The accounting year of Moody Trader ends on 28 February every year.


(a) Prepare journal entries for the above transactions for the year ended 28 February
2014. (Narration is not required.)

(b) Prepare an extract of the Statement of Financial Position for Moody Trader as at 28
February 2014, showing only the Non-current Assets section.

Question 4

The bank reconciliation as at 30 June 2014, the bank statement for the month of July 2014, a
listing of receipts and payments and the Cash at Bank account of Tommy Trading for the
month of July 2014 are given below:

Bank Reconciliation as at 30 June 2014

$ $
Balance as per Bank Statement, CR 24,000
Add: Uncredited deposits 10,000
Less: Unpresented cheques,
Cheque nos: 0021 1,200
0804 2,800
0710 4,700 (8,700)
Balance as per Cash at Bank account, DR 25,300

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Bank Statement for the month of July 2014
Date Particulars Debit Credit Balance

July 1 Brought forward 24,000 CR

2 Deposits 10,000 34,000 CR
7 0021 1,200 32,800 CR
9 0814 14,000 46,800 CR
12 0023 1,600 45,200 CR
15 0710 4,700 40,500 CR
18 0022 400 40,100 CR
24 Bank interest 1,000 41,100 CR

Cash Receipts
Date Receipt
no. Particulars $
July 2 003 Debtor Chong Trader (cheque no. 0814) 14,000
29 004 Consultancy fee (cheque no. 0947) 16,000
30 005 Debtor - Kheng (cheque no. 0750) 2,000
31 CRS Cash sales 11,000
Total 43,000

Cash Payments
Date Cheque Particulars
no. $
July 7 0022 Telephone expense 400
10 0023 Insurance expense 1,600
29 0024 Creditor Teng Trading 8,800
Total 10,800

Cash at Bank
2014 $ 2014 $
July 1 Balance b/d 25,300 July 311 Total payments 10,800
31 Total receipts 43,000 Balance c/d 57,500
68,300 68,300
August 1 Bal b/d 57,500


(a) Prepare the adjusted Cash at Bank account for the month ended 31 July 2014.

(b) Prepare a Bank Reconciliation Statement as at 31 July 2014.

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Question 5
Lim Trader established a petty cash fund of $400 on 1 March 2014.
On 31 March 2014, the petty cash box contained vouchers totalling $30 for reimbursement of
taxi fare, $110 for postage, $80 for payments to cleaners and $75 for office stationery. There
were currency notes of $74 left in the box.


(a) Prepare the journal entry to replenish the petty cash fund on 31 March 2014.

(b) On 31 March 2014, the accountant found a missing petty cash voucher for $25 that
was issued to pay for newspapers on 28 March 2014. Given this additional
information, prepare the journal entry to update the accounts.

(c) On 1 April 2014, the company decided to increase the petty cash fund to $500.
Prepare the journal entry to record this increase.


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