2018 account-nht-w - Answers from the book to look at and study upon while preparing for your exams PDF

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Answers from the book to look at and study upon while preparing for your exams good luck and have f...

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Victorian Certificate of Education 2018

ACCOUNTING Written examination Friday 1 June 2018 Reading time: 10.00 am to 10.15 am (15 minutes) Writing time: 10.15 am to 12.15 pm (2 hours)

QUESTION BOOK

Structure of book Number of questions

Number of questions to be answered

Number of marks

8

8

100

• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers, sharpeners,rulersandonescientificcalculator. • StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/or correctionfluid/tape. Materials supplied • Questionbookof13pages • Answerbookof19pages Instructions • Writeyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook. • Answerallquestionsintheanswerbook. • AllwrittenresponsesmustbeinEnglish. At the end of the examination • Youmaykeepthisquestionbook. Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room. ©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2018

2018ACCOUNTINGEXAMQB(NHT)

2

Question 1 (16marks) Wang’sEmporiumsellsarangeofelectricalgoods.Thebusinessusesamark-upof50%oncostandit reportsmonthly. Balancesat1May2018 StockControl $31500dr CreditorsControl $13200cr Thefollowingjournalssummarisethebusiness’sMaytransactionsupto31May. Cash Payments Journal (summary) Date 2018

Details

Cheq. No.

Bank

Disc. Rev.

Creditors Stock Control Control

Wages

Sundries

GST

31May

Totalstodate

–

19420

–

7 800

4000

4500

2800

320

Disc. Exp.

Debtors Control

Cost of Sales

Sales

Sundries

GST

250

12000

2000

3000

7 000

300

Theitemsinthe‘Sundries’columnwere: • PrepaidInsurance$1600 • Drawings$1200. Cash Receipts Journal (summary) Date 2018

Details

Rec. No.

31May

Totalstodate

–

Bank

Theitemsinthe‘Sundries’columnwere: • Capital$5000 • PrepaidSales$2000. Sales Journal (summary) Date 2018

Debtor

Invoice No.

31May

Totalstodate

–

Cost of Sales

Sales

GST

GST

Creditors Control

Debtors Control

15000

Purchases Journal (summary) Date 2018

Creditor

Invoice No.

31May

Totalstodate

–

Stock Control 9000

900

9900

Question 1–continued



3

2018ACCOUNTINGEXAMQB(NHT)

Thefollowingtransactionshavenotyetbeenrecorded. CreditNote:888

Simsong Electrics

30May2018 To:Wang’sEmporium For:Creditforfaulty goodsreturned GST

$1200 $ 120

Total

$1320

Wang’s Emporium Memo:61

31May2018

Writedowneachof the11superseded digitalradiosfrom $125to$65.

T Wang

a.

CompletethefourmissingfiguresintheCashReceiptsJournalandtheSalesJournal.

2marks

b. 

PrepareGeneralJournalentriestorecordthetwosourcedocumentsabove. Narrationsarenotrequired.

4marks

c.

ShowhowthefollowingaccountswouldappearintheGeneralLedgerafteralltransactions fromthejournalshavebeenposted: • StockControl • CreditorsControl



Youarenotrequiredtobalancetheaccounts.

7marks

d.

Withreferencetoonequalitativecharacteristic,explaintheneedtoreporttheinformationin Memo61.

3marks

TURN OVER

2018ACCOUNTINGEXAMQB(NHT)

4

Question 2 (9marks) Aldotto sellsarangeofhigh-qualityimportedleatherbags.ThebestsellingbagistheMilano.The StockCardfortheMilanobagforJune2018isshownbelow. Product: Milano bag Date 2018

Details

June1

Balance

8

Rec.158

14

Chq.67

22

CrN.521

Cost Assignment Method: FIFO IN Qty

Cost

OUT Total

Qty

80 5

120

Cost

120

BALANCE Total

9600

600 20

120

2400

Qty

Cost

Total

195

120

23400

115

120

13800

120

120

14400

100

120

12000

ThefollowingtransactionshavenotyetbeenenteredintotheStockCardfortheMilanobag: • 28June 100Milanobagswerepurchasedatacostof$128(plusGST)eachandAldotto  paiddeliveryof$400(plusGST)(InvoiceV465). • 29June 130Milanobagsweresoldatasellingpriceof$240(plusGST)each  (Receipts298–427). • 30June Astocktakeshowed73Milanobagsonhand(Memo125). a.

StatethetransactionthatgaverisetotheentryintheStockCardon22June.

1mark

b.

CompletetheStockCardfortheMilanobagforJune.

3marks

c. 

PreparetheGeneralJournalentrytorecordthetransactionon30June. Anarrationisnotrequired.

2marks

d.

TheownerbelievestheMilanobagsonhandat30Juneshouldallbevaluedattheirexpected sellingpricebecause‘thatiswhattheyareworthtothebusiness’.



Withreferencetooneaccountingprinciple,explainwhytheMilanobagsshould notbe valuedattheirexpectedsellingprice.

3marks



5

2018ACCOUNTINGEXAMQB(NHT)

Question 3 (15marks) Fionahadbeenproducingarangeofhand-decoratedchocolatesathomeasahobbybeforeshe establishedasmallbusinesscalledChocBloks.ThebusinessusesspecialjournalsandtheGeneral Journal,andreportsmonthly. Thebusinesscommencedon1June2018,whenFionadeposited$8000intoabusinessbank account(Receipt001). Asiteatacitymarketwasobtainedbypaying$1200(plusGST)forrentforathree-monthperiod commencing1June2018(Cheque4511). Fittingscosting$4800(plusGST)werepurchasedfromShopFit(Invoice898)andinstalledon 1June2018. StockpurchasesduringJunetotalled$3550(plusGST)(Cheque4512). SalesduringJunetotalled$8000(plusGST)(cost$2300,plusGST)(Receipts2–8). Apaymentof$1000wasmadetoShopFiton29June2018(Cheque4513). Additional information • Thefittingsaretobedepreciatedat25%perannumoncost. • Stockonhandat30June2018was$1250. a. 

PreparetheappropriateGeneralJournalentriesrequiredfortheJune2018transactions. Narrationsarenotrequired.

6marks

b.

PreparetheBalanceSheetforChocBloksasat30June2018.

9marks

TURN OVER

2018ACCOUNTINGEXAMQB(NHT)

6

Question 4 (9marks) HPGFreportsannuallyon30June.Itpurchasedalargepackingmachineon30June2012. Thefollowinggraphshowsthecarryingvalueofthepackingmachineat30Juneeachyear. Carrying value of packing machine at 30 June each year 45 000 40 000

$40 000 $34 000

35 000 30 000 carrying value ($)

$28 000

25 000

$22 000

20 000

$16 000

15 000 $10 000

10 000 5 000 0 2012

2013

2014

2015

2016

2017

year

Withreferencetooneaccountingprinciple,explainthedepreciationmethodusedforthe packingmachine.

3marks

b.

Explainwhatthecarryingvalueof$28000at30June2014represents.

2marks

c.

On1July2017thepackingmachinewastradedinforanallowanceof$8500onanew machinefromXTPackers.



PreparetheDisposalofPackingMachineledgeraccounttodeterminetheprofitorlossonthe disposalofthepackingmachine. 4marks

a.



7

2018ACCOUNTINGEXAMQB(NHT)

Question 5 (18marks) JBSportsellssportinggoodstoclubsandtothepublic.Itpreparesreportsattheendofeachmonth. On24June2018,BayFCordered40footballs.Thefootballssellfor$75each(plusGST) (costpriceis$50each,plusGST).BayFCprovidedacashdepositof$500(Receipt524).The footballsweredeliveredtoBayFCon16July2018andBayFCwasinvoicedforthebalance owing(Invoice2134). a.

b. 

Explainhowthedepositof$500wouldbetreatedinJBSport’sfinancialreportson 30June2018.

3marks

PreparethejournalentriesrequiredbyJBSporttorecordthetransactionon16July2018and thebalancedayadjustmenton31July2018. Anarrationisnotrequired.

4marks

RelevantaccountbalancesfromJBSport’sadjustedTrialBalanceat31July2018were: $ DepreciationofFittings Sales CostofSales Wages Rent DiscountRevenue Capital Drawings

4000 285000 109000 68000 13000 2000 350000 38000

c. 

Usingtheinformationprovided,preparetheGeneralJournalentrytocloseexpenseaccounts. Narrationsarenotrequired.

d.



ShowhowtheProfitandLossSummaryaccountandtheCapitalaccountwouldappearinthe GeneralLedgeraftertheclosingentrieswereposted.Noadditionalcapitalwascontributed duringtheperiod. Youarenotrequiredtobalancetheaccounts. 6marks

e.

Explainthepurposeofclosingentriesintheaccountingprocess.

3marks

2marks

TURN OVER

2018ACCOUNTINGEXAMQB(NHT)

8

Question 6 (10marks) TheownerofBladeStorehasbeenreviewingbusinessperformanceandhasrecentlycommented that‘businesshasreallypickedupinthelastcoupleofyears’.Theaccountanthasproducedthe followinggraphtouseasthebasisforadiscussion. Blade Store – Key profit indicators

Key

320 000

60

Sales ($)

50

Gross Profit Margin (%)

40

Net Profit Margin (%)

50% 54% 310 000

51%

sales ($) 300 000 30%

23% 20%

30 percentage (%) 20

290 000 10 0

280 000 2015

2016

2017

year

a.

Usingthedatainthegraphabove,discusstrendsinBladeStore’sprofitability.

6marks

b.

Providetwoexamplesofnon-financialinformationthatthebusinesscouldalsousetoassess profitabilityandexplainhowthebusinesscoulduseeachexample.

4marks



9

2018ACCOUNTINGEXAMQB(NHT)

CONTINUES OVER PAGE

TURN OVER

2018ACCOUNTINGEXAMQB(NHT)

10

Question 7 (11marks) VescoTapsreportsannuallyon31Decemberandalsobudgetsonanannualbasis.Ithaspreparedthe BudgetedIncomeStatementandBudgetedBalanceSheetfortheyearending31December2018,andnow itneedstopreparetheBudgetedCashFlowStatementforthesameperiod.Thefollowinginformationis provided. Vesco Taps Budgeted Income Statement for the year ending 31 December 2018 $

$

Revenue Sales LessSalesReturns Net Sales

 

820000 10 000 810 000

LessCostofSales Gross Profit Plus Other Revenue



380000 430000

DiscountRevenue  Less Expenses Wages RentExpense BadDebtsExpense DepreciationofEquipment InterestExpense Net Profit

 

8 000 438000

137000 26000 2000 36000 12000

213000 225 000

Question 7–continued

2018ACCOUNTINGEXAMQB(NHT)

11

Vesco Taps Budgeted Balance Sheet as at 31 December 2017 Actual

2018 Budgeted

Current Assets Cash

21600

41600

110600

122000

20000

30000

148800

134400

Equipment

417000

479000

LessAccumulatedDepreciationofEquipment

(180000)

(189000)

Total Assets

538 000

618 000

3800

2600

115200

125600

3000

4800

56000

56000

131000

75000

Capital

229000

354000

Total Equities

538 000

618 000

DebtorsControl PrepaidRentExpense StockControl Non-Current Assets

Current Liabilities GSTClearing CreditorsControl AccruedWages Loan–BankXYZ Non-Current Liabilities Loan–BankXYZ Owner’s Equity

Additional information (budgeted) for the year • Allsalesandpurchasesofstockwillbeoncredit. • VescoTaps willselloldequipmentthatoriginallycost$45000for$6200.Itwillalso purchasenewequipmentforcash. • Theownerwilltakedrawingsduringtheyearincluding$5000stockforahome renovation. • Therewillbenocapitalcontributionsduringtheyear. a.

Calculatethebudgetedcashtobepaidforwages.

2marks

b.

Withreferencetoonequalitativecharacteristic,explainwhythereisadifferencebetweenthe budgetedcashpaidforwagesandthebudgetedwagesexpensefortheyear. 3marks

c.

PreparetheinvestingandfinancingsectionsoftheBudgetedCashFlowStatementfortheyear ending31December2018. 6marks TURN OVER

2018ACCOUNTINGEXAMQB(NHT)

12

Question 8 (12marks) MacsMediasellsarangeofITproducts.Salestootherbusinessesareoncredit(terms5/10,n/30)and salestoindividualcustomerswhocomeintothestorearecashsales.Stockispurchasedoncredit,with manyproductsbeingimporteddirectlyfromoverseas(creditterms3/10,n/45).Thebusinesshasfocused onupgradingitsshopfrontoverthepastsixmonths,includinginstallingadditionalsecuritymeasuresinan attempttoreducestockloss.Somefinancialinformationfortheyearended30June2018isprovidedbelow. Expenses for the year ended 30 June 2018

Revenue for the year ended 30 June 2018 CreditSales

70%

CostofSales

50%

CashSales

25%

Wages

25%

Advertising

10%

OtherRevenue

5%

StockLoss

7%

BadDebts

5%

Interest

3%

Cash Flow Activities for the year ended 30 June 2018 $100 000

$50 000

0

–$50 000

–$100 000

–$150 000 Operating Activities

Financial indicator

Investing Activities

Financing Activities

2017

2018

DebtorsTurnover

61days

65days

CreditorsTurnover

42days

33days

StockTurnover

59days

57days

26%

40%

DebtRatio

Question 8–continued



a.

13

2018ACCOUNTINGEXAMQB(NHT)

Identifytwotypesofrevenue,otherthanDiscountRevenue,thatcouldappearintheOther RevenuesectionofMacsMedia’sIncomeStatement.

2marks

b.

MacsMedia’saccountantisconcernedabouttheliquidityofthebusiness.



Usingtheinformationprovided,identifyanddiscusstheissuestheaccountantmaybe referringto.

6marks

ExplaintwostrategiesthattheownerofMacsMediacouldimplementinordertoimprove liquidity.

4marks

c.

END OF QUESTION BOOK

SUPERVISOR TO ATTACH PROCESSING LABEL HERE

Victorian Certificate of Education 2018

Letter STUDENT NUMBER

ACCOUNTING Written examination Friday 1 June 2018 Reading time: 10.00 am to 10.15 am (15 minutes) Writing time: 10.15 am to 12.15 pm (2 hours)

ANSWER BOOK

Instructions • • • •

Aquestionbookisprovidedwiththisanswerbook. Answerallquestionsinthespacesprovidedinthisbook. Writeyourstudent numberinthespaceprovidedaboveonthispage. RefertoInstructionsonthefrontcoverofthequestionbook.

Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room. ©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2018

2

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do not write in this area

2018ACCOUNTINGEXAMAB(NHT)

do not write in this area



3

2018ACCOUNTINGEXAMAB(NHT)

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TURN OVER

2018ACCOUNTINGEXAMAB(NHT)

4

Question 1 (16marks) a. Cash Receipts Journal (summary) Date 2018

Details

Rec. No.

31May

Totalstodate

–

2marks Bank

Disc. Exp.

Debtors Control

Cost of Sales

Sales

Sundries

GST

250

12000

2000

3000

7000

300

Theitemsinthe‘Sundries’columnwere: • Capital$5000 • PrepaidSales$2000.

Date 2018 31May

Debtor

Invoice No.

Totalstodate

–

Cost of Sales

Sales

GST

15000 4marks

b. Wang’s Emporium General Journal Date 2018

Debtors Control

Details

General Ledger Debit

Credit

Subsidiary Ledger Debit

Credit

Question 1 –continued

do not write in this area

Sales Journal (summary)



5

2018ACCOUNTINGEXAMAB(NHT)

7marks

c. Stock Control Date 2018

do not write in this area

1May

Cross-reference Balance

Amount

Date 2018

Cross-reference

Amount

Cross-reference

Amount

31500

Creditors Control Date 2018

Cross-reference
...