2016 accounting written · pdf file2016 accounting exam qb 2 question 1 (13 marks) ... the...

ACCOUNTINGWritten examination

Friday 4 November 2016 Reading time: 3.00 pm to 3.15 pm (15 minutes) Writing time: 3.15 pm to 5.15 pm (2 hours)

QUESTION BOOK

Structure of bookNumber of questions

Number of questions to be answered

Number of marks

9 9 100

• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpeners,rulersandonescientificcalculator.

• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.

Materials supplied• Questionbookof10pages.• Answerbookof17pages.

Instructions• Writeyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook.• Answerallquestionsintheanswerbook.• AllwrittenresponsesmustbeinEnglish.

At the end of the examination• Youmaykeepthisquestionbook.

Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2016

Victorian Certificate of Education 2016

2016ACCOUNTINGEXAMQB 2

Question 1 (13marks)MMESportssellsawiderangeofsportinggoodstoschoolsandrecreationcentres.Goodsaresoldoncredit,withamark-upof50%oncost.

Schedule of Debtors as at 1 January 2016MainvilleCouncil $54000BatesPrimarySchool 2800RECSports 4400BalanceasperDebtorsControl $61200

Sales Journal (summary)

Date 2016

Debtor Invoice No.

Cost of Sales

Sales GST Debtors Control

31Jan. Totalstodate – 36000 54000 5400 59400

Cash Receipts Journal (summary)

Date 2016

Details Rec. No.

Bank Disc. Exp.

Debtors Control

Cost of Sales

Sales Sundries GST

31Jan. Totalstodate

– 49520 2450 49000 1800 2700 – 270

Additional information• 14Jan. BatesPrimarySchoolreturned$600(plusGST)ofsportingequipment

(CreditNote435).• 25Jan. MMESportsreceivedlegaladvicethatRECSportswouldbeabletopayonly

25centsforeverydollarowed.Theoutstandingaccountis$4400.

a. RecordtheadditionalinformationintheGeneralJournalprovided. Narrationsarenotrequired. 5marks

b. CompletetheDebtorsControlaccountprovided. Youarerequiredtobalancethisaccount. 5marks

c. Withreferencetoonequalitativecharacteristic,explaintheimportanceofpreparingaScheduleofDebtors. 3marks

3 2016ACCOUNTINGEXAMQB

TURN OVER

Question 2 (8marks)DMDesignssellsarangeofframedpictures.Ithasreceivedthefollowingdocument.Someoftheamountshavebeenremoved.

Statement of Account

Aust ImportsPOBox340 Date:31Mar.2016MiddleTown3243Ph:0383202456

StatementofAccountfor:DM Designs

Date Details Debit Credit Balance

Mar. 1 Balance 12500dr

13 Rec.940–cash

Rec.940–discount 250 6050dr

15 Inv.2560 15950dr

19 CrN.356 550

Creditterms:2/14,n/30

a. CompletetheStatementofAccountprovided. 2marks

b. ShowhowtheAustImportsaccountwouldappearintheCreditorsSubsidiaryLedgerofDMDesignsforMarch2016.

Youarenotrequiredtobalancetheaccount. 4marks

c. ExplainhowtheStatementofAccountassistsinternalcontrolforDMDesigns. 2marks


Question 3 (10marks)BusnextpaysinsuranceinadvanceinMarcheachyearforthe12-monthperiod1Aprilto31March.Thebusinessreportsannuallyon30June.On1July2015,thebalanceinthePrepaidInsuranceExpenseaccountwas$2700.On27March2016,thebusinesspaidthenextpremiumof$4356includingGST.Thisamountincludedapriceincrease.

a. PreparetheGeneralJournalentriesrequiredtoadjustandclosetherelevantaccountson 30June2016.

Narrationsarenotrequired. 4marks

b. ShowhowthePrepaidInsuranceExpenseaccountwouldappearintheGeneralLedgerat30June2016afterallentrieshavebeenposted.

Youarerequiredtobalancetheaccount. 3marks

c. Withreferencetooneaccountingprinciple,explainthepurposeofclosingthe GeneralLedger. 3marks


TURN OVER

Question 4 (16marks)MixMGamessellselectronicgames.Allstockismarkedupby100%oncost.Thebusinesspreparesreportseverysixmonths,inJuneandDecember.

Pre-adjustment Trial Balance (extract) as at 30 June 2016

Debit CreditSales 210000PrepaidSalesRevenue 4100Wages 67000AdvertisingExpense 45000CostofSales 105000CartageIn 3200DeliveryExpense 560DiscountRevenue 340SalesReturns 1340Loan 7200StockControl 35000

Additional information• Wagesof$2300areowingat30June.• Theloan(interestonly)wastakenouton1February2016at8%perannum.Nointerest

hasbeenpaidtodate.• PrepaidSalesRevenueat30Juneis$1600.• Vehiclescosting$120000(plusGST)werepurchasedon1June2015.Theyhavean

estimatedusefullifeofeightyearsandanestimatedresidualvalueof$24750.Thevehiclesaredepreciatedatarateof20%perannumusingthereducingbalancemethod.

a. PreparetheGeneralJournalentriesrequiredtorecordtheadditionalinformation. Narrationsarenotrequired. 8marks

b. Completethememo,describingatransactionon3June2016thatwouldresultinthe StockControlaccountbalancedecreasingby$250. 1mark

c. PreparetheIncomeStatementforthesixmonthsended30June2016. 7marks


Question 5 (10marks)OldeWorldeTradersisseekingtovalueitsstockonhandat30June2016.Theownerhasaskedforadviceonvaluingthefollowingtwoitems:Stock item 43:AnantiquechairwaspurchasedinOctober2015for$420(plusGST).Itwasthenre-coveredinahigh-qualitymaterialfor$250(plusGST).Theestimatedsellingpriceis$1800(plusGST).Deliveryisanextra$50(plusGST),tobepaidbythecustomer.Stock item 57:Adiningsetting,includingonetableandsixchairs,waspurchasedinSeptember2015for$1200(plusGST).Restorationcostsofthesettingtotalled$800(plusGST).Twoofthechairswereunabletobecompletelyrestoredandthesellingpriceofthediningsettingwillbereducedfrom$2500(plusGST)to$1750(plusGST).Deliverytothecustomeris$100 (plusGST)andwillbepaidbyOldeWorldeTraders.

a. Completethetableprovidedtodeterminethecorrectvaluationforeachitem. 4marks

b. PreparetheGeneralJournalentryarisingfromthevaluationprocesson30June2016. Anarrationisnotrequired. 2marks

c. Explainthevaluationofstockitem57andtheeffectthatthevaluationhasontheIncomeStatementandtheBalanceSheet. 4marks


TURN OVER

Question 6 (14marks)ThefollowinginformationhasbeenextractedfromthefinancialreportsofXYZTraders. Thebusinessreportsonanannualbasis.

XYZ TradersBalance Sheet (extract) as at

30 June 2015 30 June 2016Bank – 26000StockControl 38300 45200

Machinery 125000 140000AccumulatedDepreciationof Machinery (85000) (80000)

Bank(Overdraft) 17500 –Loan 55000 45000Capital 155000 220000

Income Statement (extract) for the year ended 30 June 2016GainonDisposalofMachinery 5000DepreciationofMachinery 18500NetProfit 45000

Additional information• On1July2015,thebusinesstraded-inoldmachinerywithacarryingvalueof$14000.• Thebusinesspaidcashforthebalanceofthenewmachinery.

a. ShowhowthefollowingaccountswouldappearintheGeneralLedgerafteralldetailsofthesaleandpurchaseofmachineryhavebeenposted:• Machinery• AccumulatedDepreciationofMachinery• DisposalofMachinery

Youarenotrequiredtobalancetheaccounts. 7marks

b. ExplainhowaGainonDisposalofanassetoccurs. 2marks

c. CalculatetheNetCashFlowthatwouldbereportedintheCashFlowStatementfortheyearended30June2016. 1mark

d. Theownertoldtheaccountantthattheywerepleasedtoseetheimprovementinthecashbalance.TheaccountantrepliedthatthemostimportantconcernwastohaveapositiveCashFlowfromOperations.

Justifytheaccountant’sstatement. 4marks


Question 7 (10marks)TheaccountantofAimeTradersobtainedindustryaveragedatarelatingtokeyfinancialratiosfortheyearended30June2016.ThefollowingtablecomparesAimeTraders’ratioswiththeindustryaverage.

Key indicator Aime Traders Industry average

ReturnonOwner’sInvestment 15.7% 14.9%

ReturnonAssets 9.9% 12.6%

AssetTurnover 1.9times 2.2times

DebtRatio 54% 34%

GrossProfitMargin 45% 40%

NetProfitMargin 5.2% 5.7%

a. DiscusstheprofitabilityofAimeTraders,asshownbythedataabove. 6marks

b. ExplaintheimplicationsforAimeTradersofhavingaDebtRatiothatissignificantlyhigherthantheindustryaverage. 4marks


TURN OVER

Question 8 (4marks)GreensGardenCentrehaspurchasedanewvehicle.Indeterminingtheappropriatedepreciationmethodforthevehicle,theaccountanthasprovidedthefollowingestimates.

20160

50000

100000

150000carryingvalue ($)

200000

250000

Vehicle – Carrying value at 30 JuneReducing balance method

2017 2018 2019

year

2020 2021 2022

20160

50000

100000

150000carryingvalue ($)

200000

250000

Vehicle – Carrying value at 30 JuneStraight-line method

2017 2018 2019

year

2020 2021 2022

Selectandjustifythemostappropriatedepreciationmethodforthevehicle.Inyourresponse,considertheeffectofthechosendepreciationmethodontheBudgetedIncomeStatementfortheyearending30June2018andtheBudgetedBalanceSheetasat30June2018.


Question 9 (15marks)AbconAirispreparingitsBudgetedCashFlowStatementforthethreemonthsending 30September2016.Thebusinessprovidedthefollowinginformation.

Balance Sheet (extract) as at 30 June 2016 30 September 2016 (actual) (budgeted)Current assetsDebtorsControl 71000 63000StockControl 45000 47000

Current liabilitiesCreditorsControl 25000 26000GSTClearing 16000 7300AccruedWages 750 890

Estimated Income Statement items for the three months ending 30 September 2016• CreditSales 200000• CostofSales 110000• DiscountRevenue 750• BadDebts 2000• DiscountExpense 1000• Wages 38000• Advertising 10000• DeliveryExpense 4000

Additional information• Allsalesandpurchasesofstockareoncredit.• Apaymentof$16000willbemadetotheAustralianTaxationOffice(ATO)in

September2016.• Paymentswillbemadeforwages,advertisinganddeliveryexpenses.

a. Calculatethefollowingforthethreemonthsending30September2016. i. Cashreceivedfromdebtors 3marks ii. Paymentstocreditors 5marks iii. GSTpaidoncashpayments 2marks

b. Usingtheinformationabove,completetheOperatingsectionoftheBudgetedCashFlowStatementforthethreemonthsending30September2016. 5marks

END OF QUESTION BOOK

Instructions

• Aquestionbookisprovidedwiththisanswerbook.• Answerallquestionsinthespacesprovidedinthisbook.• Writeyourstudent numberinthespaceprovidedaboveonthispage.• RefertoInstructionsonthefrontcoverofthequestionbook.

Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2016

ACCOUNTINGWritten examination

Friday 4 November 2016 Reading time: 3.00 pm to 3.15 pm (15 minutes) Writing time: 3.15 pm to 5.15 pm (2 hours)

ANSWER BOOK

SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2016

STUDENT NUMBER

Letter

2016ACCOUNTINGEXAMAB 2

ThIS pAGE IS BlANK

3 2016ACCOUNTINGEXAMAB

TURN OVER

ThIS pAGE IS BlANK


Question 1 –continued

Question 1 (13marks)a. 5marksMME SportsGeneral Journal

Date 2016

Details General ledger Subsidiary ledger

Debit Credit Debit Credit

b. 5marksDebtors Control

Date 2016

Cross-reference Amount Date 2016

Cross-reference Amount

1Jan. Balance 61200


TURN OVER

c. 3marks

Qualitative characteristic

Explanation


Question 2 (8marks)a. 2marksStatement of Account

Aust ImportsPOBox340 Date:31Mar.2016MiddleTown3243Ph:0383202456

StatementofAccountfor:DM Designs

Date Details Debit Credit Balance

Mar. 1 Balance 12500dr

13 Rec.940–cash

Rec.940–discount 250 6050dr

15 Inv.2560 15950dr

19 CrN.356 550

Creditterms:2/14,n/30

b. 4marksDM DesignsCreditors Subsidiary ledger (extract)

Creditor – Aust Imports

Date 2016

Cross-reference Amount Date 2016

Cross-reference Amount

c. 2marks

Explanation


TURN OVER

Question 3 (10marks)a. 4marksBusnextGeneral Journal

Date 2016



b. 3marksprepaid Insurance Expense

Date Cross-reference Amount Date Cross-reference Amount

20151July

Balance 2700

c. 3marks

Accounting principle

Explanation


Question 4 (16marks)a. 8marks

Working space

MixM GamesGeneral Journal

Date 2016



b. 1mark

MixM GamesMemo: 44 3 June 2016

Signed: Amount: $



TURN OVER

c. 7marksMixM Games

Income Statement for the six months ended 30 June 2016

$ $

Revenue




Stock item Calculation Value ($)

43

57

b. 2marksOlde Worlde TradersGeneral Journal

Date 2016




TURN OVER

c. 4marks

Explanation




Working space

XYZ TradersGeneral ledger

Machinery


Accumulated Depreciation of Machinery


Disposal of Machinery



TURN OVER

b. 2marks

Explanation

c. 1mark

Working space

Net Cash Flow for the year ended 30 June 2016 $

d. 4marks

Justification




Discussion


TURN OVER

b. 4marks

Explanation

Question 8 (4marks)

Depreciation method

Justification



Question 9 (15marks)a.i. 3marks

Working space

Cash received from debtors $

ii. 5marks

Working space

payments to creditors $

iii. 2marks

Working space

GST paid on cash payments $


b. 5marks

Working space

Abcon AirBudgeted Cash Flow Statement (extract) for the three months ending 30 September 2016

$ $

Estimated Cash Flows from Operating Activities

Estimated Net Cash Flows from Operating Activities

END OF ANSWER BOOK

2016 accounting written · pdf file2016 accounting exam qb 2 question 1 (13 marks) ... the...

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