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5 marksAccruals and Prepayments

CSEC Principles of Accounts · January 2018 · Paper 2 · Question 3(b)(ii)

A summary of Sweet Serve's bank account for the year ended 31 December 2017 shows: Dr: Bal b/d 20 000, Sales 220 000, Rent received 24 000 Cr: Drawings 15 000, Bal c/d 24 000 (total 264 000), Purchases 120 000, Insurance 45 000, Sundry expenses 60 000. Additional information: Rent revenue outstanding: 31/12/2016 2 000; 31/12/2017 1 000. Insurance expense owing: 31/12/2016 1 500; 31/12/2017 $700.

Using the T-account format, prepare the Insurance Expense account for Sweet Serve for the year ending December 31 2017.

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Other parts of this question

  1. 3(a)Prepare a trading account for the Sweet Serve Company for the period, showing clearly inventories, cost of goods sold and gross profit.[4 marks]
  2. 3(b)(i)Using the T-account format, prepare the Rent Revenue account for Sweet Serve for the year ending December 31 2017.[5 marks]
  3. 3(c)Prepare the company's Provision for Bad Debts Account for the three years, 2015–2017.[6 marks]

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