CAPE Accounting Unit 1 · 2014 · Paper 2

23 questions and parts from this paper. Open one to see it in full, then practise it on Quelpr and get it marked against the mark scheme.

1. 1(a)10 marksPrepare journal entries to record the transactions (i) to (iv) for Douglas Spencer Ltd (DS Ltd) during 2014. Narratives are not required.
2. 1(b)5 marksPrepare the journal entry to record the sale of 5 000 shares of Mango Pulp Company by The National Gas Corporation on 27 March 2013.
3. 1(c)(i)4 marksGive TWO reasons why it became necessary to develop IFRS for SMEs.
4. 1(c)(ii)1 markName ONE Institute of Chartered Accountants in the Caribbean whose main function is to ensure members adopt and implement IAS / IFRS for SMEs.
5. 1(d)(i)5 marksIdentify the internal control principle that is being violated for situations 2 through 6 using Table 1.
6. 1(d)(ii)10 marksSuggest ONE corrective measure that could be employed and give your reason for situations 2 through 6 using Table 1.
7. 2(a)10 marksPrepare a Statement of Partners' Equity for the current year ended 30 September, assuming no partner made additional investments during the year.
8. 2(b)1 markAssuming Calvin and Sylvia spend the same amount of time in the business, why might Leroy be given the same portion of the profits as the other two partners?
9. 2(c)3 marksState THREE factors that the partners should consider when deciding how to distribute the profits of the partnership.
10. 2(d)(i)2 marksDistinguish between corporations and partnerships in terms of owners' liability for debts of the business.
11. 2(d)(ii)2 marksDistinguish between corporations and partnerships in terms of transferability of ownership interest.
12. 2(d)(iii)2 marksDistinguish between corporations and partnerships in terms of continuity of existence.
13. 2(e)15 marksPrepare a Multi-step Income Statement in accordance with IAS 1 (Section 5/6 of IFRS for SMEs), correcting the errors and applying the 25% tax rate.
14. 3(a)(i)2 marksName TWO users of the Statement of Cash Flows.
15. 3(a)(ii)2 marksState ONE reason why EACH user named in (a)(i) would need a Statement of Cash Flows.
16. 3(b)10 marksClassify the ten given items (i) to (x) under operating activity (indirect method), investing activity, financing activity, or significant non-cash investing and financing activity.
17. 3(c)8 marksPrepare the operating activities section of the Statement of Cash Flows in accordance with IAS 7 (Section 7 of IFRS for SMEs) using the indirect method.
18. 3(d)3 marksState THREE limitations of accounting ratios.
19. 3(e)(i)2 marksCalculate the Gross profit margin and state ONE meaning of your result.
20. 3(e)(ii)2 marksCalculate the Times interest earned and state ONE meaning of your result.
21. 3(e)(iii)2 marksCalculate the Earnings per share and state ONE meaning of your result.
22. 3(e)(iv)2 marksCalculate the Price earnings ratio and state ONE meaning of your result.
23. 3(e)(v)2 marksCalculate the Dividend payout and state ONE meaning of your result.