Accounting (0452) · May/June 2022 · Question paper 22

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Cambridge IGCSE™

* 3 0 7 4 6 1 2 7 9 2 *

ACCOUNTING

0452/22

Paper 2 Structured Written Paper

May/June 2022
1 hour 45 minutes

You must answer on the question paper.
No additional materials are needed.
INSTRUCTIONS
●
Answer all questions.
●
Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
●
Write your name, centre number and candidate number in the boxes at the top of the page.
●
Write your answer to each question in the space provided.
●
Do not use an erasable pen or correction fluid.
●
Do not write on any bar codes.
●
You may use a calculator.
●
International accounting terms and formats should be used as appropriate.
●
You should show your workings.

INFORMATION
●
The total mark for this paper is 100.
●
The number of marks for each question or part question is shown in brackets [ ].
●
Where you are asked to complete a layout, you may not need all the lines for your answer.

This document has 20 pages. Any blank pages are indicated.
DC (NF) 303890/3
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Peter is a trader. The following transactions took place in April 2022.
April

2

Cash sales, $410, were paid directly into the bank account

3

Paid $798 to Rahat, by cheque, in full settlement of a debt of $840

8

Paid $42 cash for a motor vehicle repair

15

Purchased goods, list price $320, on credit subject to a trade discount of 10%, from
Rahat

18

Cash sales, $460

20

Paid $392 to Samir by telephone transfer, having deducted 2% cash discount from
the amount due

25

A cheque for commission receivable, $115, was paid into the bank account

29

Paid $285 to Rafael by cash, in full settlement of a debt of $300

REQUIRED
(a) Prepare Peter’s cash book on the page opposite.
Balance the cash book and bring down the balances on 1 May 2022.

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Balance b/d

Details

Apr 1

2022

Date

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Discount
allowed
$

135

$

Cash

920

$

Bank

2022

Date

Peter
Cash Book

Details

Discount
received
$

$

Cash

[11]

$

Bank

3

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Peter has received a bank statement for April. He is using it to prepare a bank reconciliation
statement and to update his cash book.
REQUIRED
(b) Place a tick (✓) to show how each item in the table below would be used to prepare the bank
reconciliation statement or to update the cash book.
Prepare bank reconciliation
statement
Items to be adjusted

Added
to bank
statement
balance

Deducted
from bank
statement
balance

Update cash book

Debited to
cash book

Credited to
cash book

Bank charges
Direct debit for rent
Cheque paid to a supplier
but not yet cashed
Cheque for commission
received dishonoured
Dividend received
[5]
REQUIRED
(c) Prepare the account for Rahat as it would appear in the ledger of Peter.
Balance the account and bring down the balance on 1 May 2022.
Peter
Rahat account
Date
2022

Details

$

Apr 1

Balance b/d

Date
2022

Details

$
840

[4]
[Total: 20]
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2

Stalla started trading on 1 April 2021. All receipts are paid into the bank and all payments are made
from the bank. She has not kept a full set of books but has provided the following information.
Summary of receipts and payments for the year ended 31 March 2022
$
Receipts
Capital introduced

8 000

Loan received (repayable 2027)

5 000

Sales (all cash)

36 000

Payments
Trade payables

17 850

Fixtures and fittings

12 000

General expenses

1 920

Rent and insurance

7 100

Drawings

?

Bank balance at 31 March 2022

2 330

REQUIRED
(a) Record the total receipts and total payments to Stalla’s bank account showing the cash
drawings for the year ended 31 March 2022. Balance the bank account and bring the balance
down on 1 April 2022.
Stalla
Bank account
Date

Details

$

Date

Details

$

[4]

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During the year ended 31 March 2022, Stalla took goods from the business for her own personal
use. The selling price of these goods is $3375. Her mark-up is 25%.
REQUIRED
(b) Calculate Stalla’s total drawings for the year ended 31 March 2022.

[2]
Stalla has provided a list of balances at 31 March 2022.
$
Fixtures and fittings (net book value)
Inventory

10 800
2 150

Prepaid rent

500

Balance at bank

2 330

Trade payables

1 875

Loan (repayable 2027)

5 000

Capital

?

REQUIRED
(c) Prepare a statement of affairs to calculate Stalla’s capital at 31 March 2022.

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Stalla
Statement of Affairs at 31 March 2022

$

$

[5]

(d) Calculate Stalla’s profit for the year ended 31 March 2022.

[4]

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Stalla is now considering whether she should start to sell at least some of her goods on credit.
REQUIRED
(e) Advise Stalla whether or not she should start selling on credit terms. Justify your answer.

[5]
[Total: 20]

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Mosi is a trader. The totals of his trial balance at 30 April 2022 did not agree and the difference
was placed in a suspense account.
Mosi later discovered the following errors.
1

Commission received, $96, had been debited to the discount received account. The entry to
the bank account was correctly made.

2

The total of the sales journal for April 2022, $1258, was transferred to the sales account as
$2185.

3

A cheque payment for motor expenses, $77, had been omitted from the book-keeping
records.

4

A payment by electronic transfer, $135, was recorded as a payment in the petty cash book.

5

An invoice received from Tracey, $160, was credited to the account for Stacey.

REQUIRED
(a) Prepare the journal entries to correct errors 1–5. Narratives are not required.

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Mosi
Journal
Error
number

Details

Debit
$

Credit
$

[11]

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(b) Prepare the suspense account. Include the original difference on the trial balance as a
balancing figure.
Mosi
Suspense account
Date

Details

$

Date

Details

$

[4]
Mosi’s original draft profit, before correcting the errors, was $39 970.
REQUIRED
(c) Calculate Mosi’s corrected profit for the year ended 30 April 2022.

[5]
[Total: 20]

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4

Nala is a trader who buys and sells stationery.
She provided the following information about her inventory at 28 February 2022.
Item

Number of
units

Packs of paper

240

$
4.50

Carriage
inwards per
unit
$
–

Packs of envelopes

225

5.50

1.00

1.50

10.00

Notepads

150

4.00

2.00

–

5.00

96

3.50

–

–

6.00

Boxes of pencils

Cost per unit

Selling
expenses
per unit
$
–

Selling
price per
unit
$
8.00

REQUIRED
(a) (i)

Calculate the value of Nala’s inventory at 28 February 2022.

[6]

(ii)

State the accounting principle used to value inventory.
[1]

(b) (i)

Complete the table by placing a tick (✓) to show how Nala should treat each item of her
expenditure.
Capital
expenditure

Revenue
expenditure

Computer printer paper
Computer equipment
Installation of computer equipment
Motor vehicle
Insurance of motor vehicle
Delivery of motor vehicle
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(b) (ii)

Explain how the materiality principle is applied to the treatment of non-current assets.

[2]

Nala has treated the receipt of a bank loan as a revenue receipt.
REQUIRED
(c) Complete the table by placing a tick (✓) to show the effect of the error on capital and on
liabilities.
overstated

understated

Effect on capital
Effect on liabilities
[2]
Nala has charged depreciation on her shop fittings at 25% per annum using the reducing balance
method. This year she is considering changing this to 10% per annum using the straight-line
method, as this would improve her profit for the year.
REQUIRED
(d) Advise Nala whether or not she should change her depreciation method. Justify your answer.

[5]
[Total: 20]
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5

The trial balance of M Limited at 30 November 2021 was as follows.
M Limited
Trial Balance at 30 November 2021
Debit

Credit

$

$

Revenue

203 600

Inventory at 1 December 2020

12 945

Purchases

143 750

Rent and rates

12 460

Operating expenses

12 920

Wages

24 380

Equipment at cost

40 000

Provision for depreciation of equipment

17 500

Trade receivables

9 800

Provision for irrecoverable debts

295

Bank

162

Trade payables

11 585

Ordinary share capital

20 000

General reserve

3 000

Retained earnings

2 037

Dividend paid on ordinary shares

1 600
258 017

258 017

Additional information
1

Inventory at 30 November 2021 was valued at $12 830.

2

Depreciation on equipment is to be charged at 25% per annum using the reducing balance
method.

3

Accrued operating expenses at 30 November 2021 were $415.

4

Rent includes a payment of $2250 for the 3 months from 1 October 2021 to 31 December
2021.

5

The provision for doubtful debts is to be set at 4% of trade receivables.

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6

No dividends were outstanding at 30 November 2021.

7

$1000 is to be transferred to the general reserve at 30 November 2021.

REQUIRED
(a) Prepare the income statement for M Limited for the year ended 30 November 2021.
M Limited
Income Statement for the year ended 30 November 2021
$

$

[7]

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(b) Prepare the statement of changes in equity for M Limited for the year ended 30 November 2021.
M Limited
Statement of Changes in Equity for the year ended 30 November 2021
Details

Ordinary
Share capital

General
reserve

Retained
earnings

Total

$

$

$

$

On 1 December 2020

On 30 November 2021

[5]

(c) Calculate the liquid ratio for M Limited at 30 November 2021.
The answer should be correct to two decimal places.
Liquid (acid test) ratio
workings

answer

[3]

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The managing director, Emily, plans to buy new equipment to be used to improve the profitability
of the company. She is considering whether to fund the equipment by issuing further ordinary
shares or requesting a bank overdraft.
REQUIRED
(d) Advise Emily whether to fund the purchase of the equipment by issuing further ordinary
shares or by requesting a bank overdraft. Justify your answer.

[5]
[Total: 20]

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