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O-LevelAccountingAccounting procedures7707/21 · Oct/Nov 2019 · Q320 Marks

The Primrose Garden Store has two departments: plants and tools. The following information is available for the year ended 30 September 2019. Revenue plants $252000, tools $130000 Wages plants $38000, tools $17000 Direct expenses $5730 Additional information 1 The mark-up on plants is 40%. 2 The profit margin on tools is 20%. 3 Direct expenses are apportioned to departments on the basis of revenue. REQUIRED

  1. (a)Calculate the cost of sales for:
  2. (a)(i)plants[2]
  3. (a)(ii)tools[2]
  4. (b)Prepare the departmental trading account showing the profit or loss of each department. Primrose Garden Store Departmental Trading Account for the year ended 30 September 2019 | | Plants () | Tools () | | :-------- | :--------- | :-------- |[8]
  5. (c)State three examples of voluntary deductions made from wages.[3]
  6. (d)Prepare the following ledger accounts showing the entries for September 2019. It is not necessary to total or balance the accounts.
  7. (d)(i)Wages account[3]
  8. (d)(ii)Income tax account[2]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

  1. [1] 252000 × 100
  2. [1] / 140 = 180000 (1)
  3. [1] 130000 × 80
  4. [1] / 100 = (1)104000 (1)
  5. [1] Revenue 252 000, 130 000
  6. [1] Cost of sales (180 000) (1)OF, (104 000) (1)OF
  7. [1] Gross profit 72 000 (1)OF, 26 000) (1)OF
  8. [1] Wages (38 000), (17000) (1) both
  9. [1] Direct expenses (3 780) (1), (1 950) (1)
  10. [1] Departmental profit 30 220, 7 050 (1)OF both
  11. [1] Pension contributions (1)
  12. [1] Trade union subscriptions (1)
  13. [1] Social club contributions (1)
  14. [1] Donations to charities (1)
  15. [1] Health care (1)
  16. [1] Max 3
  17. [1] Accept other acceptable points.
  18. [1] 30 Sep Cash 3940 (1)
  19. [1] Income tax 950 (1)
  20. [1] Voluntary con 510 (1)
  21. [1] 9 Oct Bank 950 (1)
  22. [1] 30 Sep Wages 950 (1)

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About this question

Topic
Accounting procedures, O-Level Accounting (syllabus 7707). Structured question, 20 marks.
Source
O-Level Accounting, Oct/Nov 2019 Paper 2 Variant 1, question 3.

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