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TEST CODE 001093/2

FORM TP 23124

May/June 2003
CARIBBEAN

EXAMINATIONS

COUNCIL

SECONDARY EDUCATION CERTIFICATE


EXAMINATION
PRINCIPLES OF ACCOUNTS
Paper 03/2 - General Proficiency
1 hour
26 MAY 2003 (p.m.)

1.

Answer ALL questions.

2.

Answer the questions on the Answer Sheet provided and return it.

3.

Silent electronic calculators may be used, but ALL necessary working should be clearly
shown.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO


Copyright 2002 Caribbean Examinations Council.
All rights reserved.
001093/F 2003/2

-2School Project
The principal at the Southborough Comprehensive High School decided to convert the school's
photocopying activity into a business operation. Effective September 1, 2001, a charge of $2 per page
was implemented for all copying done on the school's photocopy machines. Students and teachers
were required to take materials to the photocopy room during the normal school hours to have them
copied by the machine operator. There was no limit as to the type and quantity of materials to be
photocopied.
The photocopying room was equipped with:
-

One heavy duty photocopy machine costing

$150000

One small desk copying machine costing

$30 000

Two tables, each costing

$8000

Two standing fans, each costing

$5000

One heavy duty stapling machine costing

$3000

One large cabinet to store photocopy paper

$9000

Six layers of shelving costing

$6000

In addition, there is a supply of photocopy ink, paper and a wide variety of other stationery items.
For the first 3 months of operation the records showed the following:
Number of pages photocopied

$60000

Purchases of photocopy paper

$20 000

Purchases of photocopy ink

$10000

Purchases of other stationery items

$ 8000

Wages paid to operator

$18000

Electricity and telephone related to the copy room

$ 5000

Rent assigned to the copy room

$ 6000

All purchases were on credit but teachers and students received no credit. At the end of the three-month
period the value of photocopy paper, ink and other stationery items on hand amounted to $7 000. It was
decided to depreciate all fixed assets by 10% per year.
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001093/F 2003/2

-3QUESTIONS
1.

Identify the fixed assets for the operation.

2.

Identify the current assets for the operation.

3.

Identify the customers of the operation.

4.

What books of original entry are appropriate for this operation?

5.

Suggest THREE types of materials that would be photocopied.

6.

What was the revenue for the first THREE months of operation?

7.

Calculate total purchases for the period.

8.

Prepare a list of ALL the expenses identified in the project.

9.

Name TWO items that could be included in "other stationery items".

10.

What is the total depreciation expense on ALL fixed assets for the three-month period?

11.

Prepare a statement to show the profit OR loss on the operation for the THREE months.
(Include an appropriate heading).

12.

What items would appear on the operations Balance Sheet?

13.

Who are the possible creditors?

14.

Would there be ANY debtors?

15.

Identify the stock items related to the operation.

16.

Give THREE benefits to the school when the photocopying activity is treated as a business
operation.

17.

Identify TWO other related expenses NOT mentioned in the case.

18.

Show the value of the TWO photocopying machines at the end of TWO years.

19. Suggest THREE ways of expanding the services of the photocopy room.
20.

Assuming that the trend for the next 9 months of operation will be NO different from the
trend set in the FIRST 3 months, prepare a statement to show the profit OR loss on operations
for a full year.

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