0452/23/M/J/24 Question Paper – Accounting May/June 2024 Paper 23

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Cambridge Accounting (0452) question paper for paper 23, May/June 2024 — 0452/23/M/J/24, file 0452_s24_qp_23.pdf.

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Cambridge IGCSE™

* 9 3 3 3 7 6 9 9 8 9 *

ACCOUNTING

0452/23

Paper 2 Structured Written Paper

May/June 2024
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 (JP) 341615
© UCLES 2024

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2
1

Lottie is a trader. Her financial year end is 30 April. She keeps her petty cash book using the
imprest system. The imprest amount is $150. The totals of the payments analysis columns in her
petty cash book for April 2024 are as follows.
$
Cleaning

Stationery

Sundry expenses

During April 2024, Lottie received a refund for damaged stationery, $15. This amount was received
into petty cash.
REQUIRED
(a) Calculate the amount required to restore the petty cash imprest on 1 May 2024.

[3]
The petty cash book is one of the books of prime entry.
REQUIRED
(b) State
(i)

one other book of prime entry

[1]

(ii)

two advantages of using books of prime entry

[2]

0452/23/M/J/24

3
On 30 April 2024, Lottie sold a motor vehicle for $6000 on credit to Y Limited. She had purchased
the vehicle on 1 May 2021 for $12 000. Lottie charges depreciation on vehicles at 25% using the
reducing balance method. No depreciation is charged in the year of disposal.
REQUIRED
(c) (i)

Calculate the accumulated depreciation on the vehicle at 30 April 2024.

[2]

(ii)

Prepare the disposal of motor vehicles account.
Lottie
Disposal of motor vehicles account

Date

Details

Date

Details

[4]

0452/23/M/J/24

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4
Lottie sells 3 different types of goods. Her inventory at 30 April 2024 is as follows.
Type

Number of
units

Purchase
price per unit
$

Net realisable
value per unit
$

Carriage inwards
per unit
$

REQUIRED
(d) Calculate the value of Lottie’s inventory at 30 April 2024.

[4]
Lottie pays $360 per annum for insurance. On 1 May 2023, insurance of $60 was prepaid.
On 1 August Lottie paid $360 by bank transfer for the year 1 July 2023 to 30 June 2024.
REQUIRED
(e) Prepare the insurance account for the year ended 30 April 2024. Bring down the balance at
1 May 2024.
Lottie
Insurance account
Date

Details

Date

Details

[4]
[Total: 20]

0452/23/M/J/24

5
BLANK PAGE

0452/23/M/J/24

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6
2

Toyah owns a factory which makes dolls’ houses. Her financial year end is 31 January.
At 31 January 2024, her ledger accounts included the following balances.
$
Inventory at 1 February 2023
Raw materials

12 400

Work in progress

16 970

Finished goods

14 825

Revenue

390 100

Purchases of raw materials

143 000

Wages
Factory operatives

51 000

Factory supervisor

19 000

Sales staff

30 000

Factory electricity

16 000

Rates and insurance

16 200

General factory expenses

6 155

Factory machinery – at cost

120 000

Factory machinery – provision for depreciation

52 500

Additional information
1. Inventory at 31 January 2024
Raw material

11 205

Work in progress

17 682

Finished goods

13 480

2. Rates and insurance are to be apportioned 2/3 to the factory and 1/3 to the office.
3. At 31 January 2024, general factory expenses of $235 were unpaid.
4. Factory machinery is depreciated at 25% per annum using the reducing balance method.

0452/23/M/J/24

7
REQUIRED
(a) Prepare Toyah’s manufacturing account for the year ended 31 January 2024.
Toyah
Manufacturing Account for the year ended 31 January 2024
$

[9]

0452/23/M/J/24

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8
(b) Prepare Toyah’s income statement (trading section) for the year ended 31 January 2024.
Toyah
Income statement (trading section) for the year ended 31 January 2024
$
$

[5]

The factory produced 6936 dolls’ houses during the year ended 31 January 2024.
REQUIRED
(c) Calculate the manufacturing cost of each dolls’ house. Round up your answer to the nearest
dollar.

[1]

0452/23/M/J/24

9
Idir, a competitor of Toyah’s, has decided to cease trading. He has offered to sell his inventory of
finished goods to Toyah at a discounted price in return for immediate payment in cash. The total
price for these items is $9600. Toyah has $1415 cash at bank.
REQUIRED
(d) Advise Toyah whether or not she should buy Idir’s inventory. Justify your answer by providing
two points for and two points against buying this inventory.

[5]
[Total: 20]

0452/23/M/J/24

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10
3

Akil prepared his trial balance at 29 February 2024. The total of the debit side was $83 640 and
the total of the credit side was $84 025.
Akil later discovered the following errors.
1

The total of the sales journal for January 2024, $3416, had been credited to the sales
returns account.

A direct debit for insurance, $115, had been credited to both the bank account and the
insurance account.

Discount allowed, $47, had been credited to the account for discount received.

A payment for office equipment, $52, had been debited to the stationery account.

The purchases journal for February had been overcast by $90.

REQUIRED
(a) State
(i)

which business document shows when the direct debit for insurance was paid
[1]

(ii)

which of the errors listed in 1 to 5 above is an error of principle
[1]

0452/23/M/J/24

11
(b) Prepare the journal entries to correct errors 1 to 3 only. Narratives are not required.
Akil
Journal
Error
number

Details

Debit
$

Credit
$

[7]

0452/23/M/J/24

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12
(c) (i)

State why a balance may remain on the suspense account after errors 1 to 5 have
been corrected.

[1]

(ii)

Prepare the suspense account. Bring down any remaining balance at 1 March 2024.
Akil
Suspense account

Date

Details

Date

Details

………

[5]
Akil’s draft profit for the year, before correction of the errors, was $17 420.
REQUIRED
(d) Calculate Akil’s profit after items 1 to 5 have been corrected.

[5]
[Total: 20]

0452/23/M/J/24

13
BLANK PAGE

0452/23/M/J/24

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14
4

Tadeen and Yadid are lawyers who have been in partnership for many years.
The partners provided the following trial balance at 30 April 2024.
Tadeen and Yadid
Trial balance at 30 April 2024
$
Revenue
Salaries
Rates and insurance
Advertising
Office expenses
Interest on loan from Tadeen
Premises at cost
Fittings and equipment at cost
Provision for depreciation of fittings and equipment
Receivables
Cash at bank
Cash in hand
Loan from Tadeen
Capital accounts
Tadeen
Yadid
Current accounts
Tadeen
Yadid
Drawings
Tadeen
Yadid

79 800
17 320
16 730
6 150
1 200
180 000
70 000
24 200
19 335
1 375

$
236 350

31 500

20 000
125 000
85 000

4 240

3 300

34 300
46 500
501 150

501 150

Additional information
1

Rates and insurance include an amount of $1920 for the year 1 March 2024 to
28 February 2025.

At 30 April 2024, $1800 for salaries was due but unpaid.

Irrecoverable receivables of $670 are to be written off.

Depreciation on fittings and equipment is to be charged at 15% per annum using the
straight‑line method.

The partnership agreement provides for
interest on partner’s loan of 6% per annum
interest on drawings of 5%
interest on capital of 3% per annum
a salary to Yadid of $10 000 per annum
residual profits and losses are to be shared 60% to Tadeen and 40% to Yadid.

0452/23/M/J/24

15
REQUIRED
(a) Prepare the income statement for Tadeen and Yadid for the year ended 30 April 2024.
Tadeen and Yadid
Income Statement for the year ended 30 April 2024
$

[8]

0452/23/M/J/24

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16
(b) Prepare the appropriation account for Tadeen and Yadid for the year ended 30 April 2024.
Tadeen and Yadid
Appropriation account for the year ended 30 April 2024
$

[5]

one reason why the partners might consider reducing their drawings

[1]

(ii)

which accounting principle reflects the partners’ intention to continue trading indefinitely.
[1]

0452/23/M/J/24

17
The partners employ one lawyer and office staff. The lawyer, Lakia is paid $25 000 but has decided
to leave. Tadeen and Yadid have found a replacement lawyer, Raim. He has worked as a lawyer
for 15 years and is well known in the local area. However, Raim wants to be a partner in the
business rather than an employee and would expect 40% of the residual profit of the partnership
each year.
REQUIRED
(d) Advise Tadeen and Yadid whether or not they should offer Raim a partnership. Justify your
answer by providing points for and against offering Raim a partnership.

[5]
[Total: 20]

0452/23/M/J/24

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18
5

Ajay is a retailer. He has provided the following information.
$
At 1 April 2023
Inventory

5 200

Trade receivables

6 875

Cash at bank

1 946

Trade payables

5 115

For the year ended 31 March 2024
Revenue – credit sales

86 400

– cash sales

10 600

Purchases

51 300

Expenses

23 750

At 31 March 2024
Inventory

6 500

Trade receivables

9 550

Cash at bank

1 200

Trade payables

6 000

0452/23/M/J/24

19
REQUIRED
(a) Complete the following table.
ratio

working

answer

Gross margin
(to 2 decimal places)

Profit margin
(to 2 decimal places)

Rate of inventory
turnover (times)
(to 2 decimal places)
Trade receivables
turnover days
(round up to next whole day)
Liquid (acid test) ratio
(to 2 decimal places)

[11]
Ajay has been trading for 3 years and he has established a good reputation. He has never
changed his selling price. His gross margin for the year ended 31 March 2024 is higher than for
the previous years.
REQUIRED
(b) (i)

Suggest one reason why Ajay’s gross margin has increased.

[1]

(ii)

State one reason why Ajay’s customers might be interested in his financial statements.

[1]

0452/23/M/J/24

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20
Ajay is concerned about the levels of his inventory and trade receivables. He is considering
reducing his selling price.
REQUIRED
(c) Advise Ajay whether or not he should reduce his selling price. Justify your answer by providing
advantages and disadvantages of reducing his selling price.

[5]
Although Ajay’s gross margin has increased, his profit margin has fallen for each of the last
two years. Sales revenue is Ajay’s only income.
REQUIRED
(d) State two reasons why Ajay should be concerned about his falling profit margin.
1

[2]
[Total: 20]

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at www.cambridgeinternational.org after the live examination series.
Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
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0452/23/M/J/24

Accounting (0452) · May/June 2024 · Question paper 23

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