pages - 2019 accounting-nht written examination · 2019. 7. 10. · 2019 accounting exam qb (nht) 2...

ACCOUNTINGWritten examination

Thursday 30 May 2019 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 bookNumber of questions

Number of questions to be answered

Number of marks

8 8 100

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

• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.

Materials supplied• Questionbookof14pages• Answerbookof19pages

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.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2019

Victorian Certificate of Education 2019

2019ACCOUNTINGEXAMQB(NHT) 2

Question 1–continued

Question 1 (15marks)BeachsideCarpetsreportsmonthly.On1March2019,asummaryoftheDebtorsSubsidiaryLedgershowedthefollowingbalances.

Debtor AmountRChee $1 100GLong 880JTerrell 1540

Total $3520

Journals for March 2019Cash Receipts Journal

Date 2019

Details Rec. No.

Bank Disc. Exp.

Debtors Control

Cost of Sales

Sales Sundries GST

Mar.3 Capital 784 10 000 10 000

8 CashSales 785 4675 2550 4250 425

14 JTerrell 786 1261 125 1386

21 RChee 787 435 15 450

Sales Journal

Date 2019

Debtor Invoice Number

Cost of Sales

Sales GST Debtors Control

Mar.2 DStarr 1655 408 680 68 748

9 JTerrell 1656 732 1220 122 1342

15 KMartin 1657 150 250 25 275

23 RChee 1658 240 400 40 440

3 2019ACCOUNTINGEXAMQB(NHT)

TURN OVER

On31March,thefollowingdocumentshadnotbeenrecorded.

Beachside Carpets Beachside Carpets

2/03/2019 22/03/2019

Credit Note:625To:JTerrellFor:Returnoffaultygoods*

*CostPrice$84

GST: Total:

$140$14$154

Receipt: 788To:KMartinFor:Fullsettlementofaccount (Inv.1657)

$260

Beachside Carpets

29/03/2019

Memo:14GLongdeclaredbankrupt.Wehavetoaccept anofferof50centsinthedollar(Rec.789).Writeofftheremainingbalance.

a. RecordthethreedocumentsinthejournalsprovidedforMarch. Narrationsarenot required. 7marks

b. CompletetheDebtorsControlaccountintheGeneralLedgerafteralljournalshavebeenposted.

Youarerequiredtobalancetheaccount. 4marks

c. ExplaintwobenefitsofusingacontrolaccountandaSubsidiaryLedgerfordebtors. 4marks

2019 ACCOUNTING EXAM QB (NHT) 4

Question 2 (14 marks)Pets Plus is a business that sells a range of pet toys and grooming products. The business uses the perpetual method for recording stock and it uses control accounts for its debtors, creditors and stock. The business uses a 100% mark-up on cost and the financial reports are prepared monthly.The following transactions for March 2019 relate to Acme dog brushes:• 8 March Sale of 14 Acme dog brushes to Global Pets (Invoice 473)• 12 March Credit purchase from ZZZ Brushes of 20 Acme dog brushes for $14 each (plus GST)

(Invoice TR282)• 23 March Global Pets returned five Acme dog brushes due to broken handles

(Credit Note 142).• 24 March The five broken Acme dog brushes were returned to ZZZ Brushes

(Credit Note 234).• 31 March A physical stocktake revealed 19 Acme dog brushes were on hand (Memo 88).

a. Record the transactions above in the Stock Card for the Acme dog brush. 5 marks

b. Describe the effect of the transaction on 8 March on the accounting equation. 3 marks

c. Prepare the relevant General Journal entry for the transaction on 24 March. A narration is not required. 2 marks

d. The owner of Pets Plus feels that the stock is overcrowded and wishes to reduce the variety and level of stock. The owner decides that any stock item with a turnover rate slower than 40 days will not be replaced once sold.

State two advantages and two disadvantages of this strategy. 4 marks


TURN OVER

Question 3 (11marks)On30April2019,GlobalBusinessCentretradedinits3DprinterforanewmodelpurchasedfromTexComputers.Theoldprinterwaspurchasedfor$3520(includingGST)and,atthetimeof trade-in,hadacarryingvalueof$500.

Tex Computers144 Digital Crescent

Melbourne 3000

Invoice No.: C117

3DprinterGST

Lessagreedtrade-in

LessdepositBalanceowing

30/4/2019

$2500250

2750(600)2150

800$1350

a. PreparetheGeneralJournalentriestorecordthedisposaloftheoldprinterandthepurchaseofthenewprinter.

Narrationsarenotrequired. 6marks

b. Withreferencetoonequalitativecharacteristic,justifyhowtheoutstandingbalanceto TexComputerswouldbereportedintheBalanceSheeton30April2019. 3marks

c. ShowhowthepaymentfortheoutstandingbalancetoTexComputerswouldbereportedintheCashFlowStatementofGlobalBusinessCentre. 2marks

2019 ACCOUNTING EXAM QB (NHT) 6

Question 4 (6 marks)Hamster sells wireless headphones on credit. The business buys the headphones for $200 each (plus GST). Purchases are for cash.In March 2019, Hamster was facing increased competition and the owner instructed staff, ‘More headphones are to be sold – no matter what!’Expenses did not change in April, May and June 2019.Data for April, May and June showed the following.

Month Unit sales Credit Sales ($)

DebtorsTurnover

(days)

Net Profit ($)

Cash from debtors

($)

April 200 70 000 52 15 000 66 000

May 300 81 000 72 6 000 73 000

June 400 92 000 115 (3 000) 82 000

Discuss the impact of the owner’s instruction on both the liquidity and profitability of Hamster.

7 2019 ACCOUNTING EXAM QB (NHT)

TURN OVER

Question 5 (13 marks)The Olive Merchant sells high-quality olive leaf extract in 10-litre tins to the health food industry. Each tin sells for $165 (including GST). Purchases are on credit and sales are on a cash basis. Reports are prepared monthly.The following information is available for May 2019:• 1 May opening stock 260 tins at $90 each• 8 May sales 220 tins (Receipt 86)• 14 May purchases 300 tins from Herbal Home at a cost of $100 each

(plus GST) (Invoice S118); the delivery expense was $5 per tin (plus GST) (Cheque 1414)

• 22 May sales 180 tins (Receipt 87)

Additional information• A physical stocktake revealed 155 tins on hand on 31 May (Memo 4).• Twenty of the tins on hand at 31 May are approaching their use-by date and will be

reduced in price to sell for $60 each (plus GST). A bottle of herbal shampoo (cost $15 each plus GST) will be included with each of these tins sold (Memo 3).

a. Prepare General Journal entries to record the two stock adjustments at 31 May 2019. Narrations are not required. 4 marks

b. Explain your treatment of the 20 tins that are approaching their use-by date. 3 marks

c. Calculate the Cost of Sales for May 2019. 2 marks

d. Prepare an extract of the Income Statement up to and including Adjusted Gross Profit for the month ended 31 May 2019. 4 marks


Question 6 (6marks)Q&XTradershasfoundthatitsAssetTurnoverRatioisslowinganditisseekinganexplanation.Q&XTradersprovidesthefollowingtable.

March April May June

AssetTurnoverRatio(Sales/AverageTotalAssets)

62times peryear

60times peryear

57times peryear

56times peryear

TotalAssets 240000 245000 260000 275000

Discuss,referringtooneCurrentAssetandoneNon-CurrentAsset,whytheAssetTurnoverRatioisslowing.


TURN OVER

CONTINUES OVER PAGE



Question 7 (21marks)TheWeddingShopreportsannuallyon30June.Thepreviousaccountant,whohasnowleftthebusiness,onlymadeoneadjustmentat30June2019:thedepreciationofthevehicles.TheAdjustedTrialBalanceproducedbythepreviousaccountantisshownbelow.

The Wedding ShopAdjusted Trial Balance as at 30 June 2019

Account Debit Credit

AccumulatedDepreciationofVehicles 36 400

AdvertisingExpense 19000

BankLoan 40000

Capital 230100

CashatBank 48000

CostofSales 160000

CreditorsControl 20000

DebtorsControl 52000

DepreciationofVehicles 8400

GSTClearing 3400

PrepaidInsurance 34500

PrepaidRent 91000

Sales 480000

StockControl 149000

Vehicles 70 000

WagesExpense 178 000

Total $809 900 $809 900


TURN OVER

Thenewaccountanthasidentifiedthatthefollowingitemswerenotconsidered.

Additional information• Rentis$7000permonth(plusGST)andispaidinadvanceduringthepreviousmonth.• Insuranceispaidannuallyinadvanceon1June.Anamountof$18000(plusGST)was

paidon1June2019.• Adepositof$500forweddingaccessories(PrepaidRevenue)waspaidinJuneandwas

incorrectlyrecordedasasale.TheweddingaccessorieswillnotbeavailableuntilJuly.• TheBankLoan(interestonly)wastakenouton1May2019.Interestis6%perannum,

payableeverythreemonths.

a. Explain,withreferencetothedefinitionofone accountingelement,howCostofSalesisclassified. 3marks

b. PrepareGeneralJournalentriestorecordtheadditionalinformation. Narrationsarenot required. 9marks

c. Withreferencetooneaccountingprinciple,explainwhythebusinessmaychoosethereducingbalancemethodofdepreciationwhendepreciatingvehicles. 3marks

d. ExplaintheeffectontheIncomeStatementandtheBalanceSheetiftheadjustmentforPrepaidRentwasnotmade. 3marks

e. PreparetheCurrentLiabilitiessectionoftheBalanceSheetasat30June2019. 3marks



Question 8 (14marks)SavaTradersispreparingitsCashFlowStatementfortheyearended30June2019andprovidesthefollowinginformation.

Summary of Income Statement items for the year ended 30 June 2019

$ $

Revenue Expenses

Sales 870 000 CostofSales 417000

GainonDisposalofVehicle 2000 Advertising 18 000

DiscountRevenue 8 000 Wages 120000

Total Revenue 880 000 Insurance 40000

Interest 18 000

DepreciationofVehicles 46000

BadDebts 7 000

DiscountExpense 3 000

Total Expenses 669 000


Sava TradersBalance Sheet as at 30 June

2018 2019

Current Assets

Cash 21000 41600

DebtorsControl 90500 92000

PrepaidInsurance 6000 2000

StockControl 108 000 104000

Non-Current Assets

Land 240000 300 000

Vehicles 277600 302000

LessAccumulatedDepreciationofVehicles (70000) (86000)

Total Assets $673 100 $755 600

Current Liabilities

CreditorsControl 35000 40000

AccruedInterest 4000 5000

GSTClearing 4500 3 000

Loan 60000 50000

Non-Current Liabilities

Loan 320000 270000

Owner’s Equity

Capital 249600 387600

Total Liabilities and Owner’s Equity $673 100 $755 600

Additional information• Allsalesandpurchasesareoncredit.• Onevehicle(cost$35000plusGST)wassoldforcash.Anewvehiclewaspurchasedfor

cash.• Noadditionalcapitalwascontributedduringtheyear.• Alldrawingswerecash.

a. ReconstructtheStockControlaccountandtheCreditorsControlaccounttodeterminethecashpaidtocreditors. 6marks

b. PreparetheCashFlowsfromFinancingActivitiessectionoftheCashFlowStatementfortheyearended30June2019. 2marks

Question 8–continuedTURN OVER


ThegraphbelowshowsbudgetedandactualresultsforthreeitemsfromtheCashFlowsfromOperatingActivitiessectionoftheCashFlowStatementfortheyearended30June2019.

Budgeted versus actual Cash Flows from Operating Activities (extract) for the year ended 30 June 2019

$0 $200000 $400000 $600000 $800000 $1000000

actualbudgeted

2500018000

110000120000

980000945500

Advertising

Wages

Receipts from Debtors

c. CompletetheVarianceReport(extract)fortheyearended30June2019. 3marks

d. Avariancemaybelistedas‘favourable’yethaveanunfavourableeffectonbusinessperformance.

ExplainthisstatementwithrespecttooneoftheitemsintheVarianceReport. 3marks

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.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2019

ACCOUNTINGWritten examination

Thursday 30 May 2019 Reading time: 10.00 am to 10.15 am (15 minutes) Writing time: 10.15 am to 12.15 pm (2 hours)

ANSWER BOOK

SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2019

STUDENT NUMBER

Letter

2019ACCOUNTINGEXAMAB(NHT) 2

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3 2019ACCOUNTINGEXAMAB(NHT)

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Question 1 –continued

Question 1 (15marks)a. 7marksBeachside CarpetsCash Receipts Journal

Date 2019

Details Rec. No.

Bank Disc. Exp.

Debtors Control

Cost of Sales

Sales Sundries GST

Mar.3 Capital 784 10000 10000

8 CashSales 785 4675 2550 4250 425

14 JTerrell 786 1261 125 1386

21 RChee 787 435 15 450

Sales Journal

Date 2019

Debtor Invoice Number

Cost of Sales

Sales GST Debtors Control

Mar.2 DStarr 1655 408 680 68 748

9 JTerrell 1656 732 1220 122 1342

15 KMartin 1657 150 250 25 275

23 RChee 1658 240 400 40 440


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Question 1 –continuedTURN OVER

General Journal

Date 2019

Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

b. 4marksDebtors Control

Date 2019

Cross-reference Amount Date 2019

Cross-reference Amount

Mar.1 Balance 3520


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c. 4marks

Benefit 1

Benefit 2


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CONTINUES OVER PAGE


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Question 2 (14marks)a. 5marksStock Card

Product: Acme dog brush Cost Assignment Method: FIFO

Date 2019

Details IN OUT BALANCE

Qty Cost Total Qty Cost Total Qty Cost Total

Mar.1 Balance 18 12 216

b. 3marks

Description

9 2019 ACCOUNTING EXAM AB (NHT)

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c. 2 marksPets PlusGeneral Journal

Date 2019



d. 4 marks

Advantage 1

Advantage 2

Disadvantage 1

Disadvantage 2


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Question 3 (11marks)a. 6marksGlobal Business CentreGeneral Journal

Date 2019



b. 3marks

Qualitative characteristic

Justification



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c. 2marks

Item Operating/Investing/Financing

Inflow/Outflow Amount ($)

Question 4 (6marks)

Discussion


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Question 5 (13marks)a. 4marks

Working space

The Olive MerchantGeneral Journal

Date 2019



b. 3marks

Explanation



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c. 2marks

Calculation

Cost of Sales for May 2019 $

d. 4marksThe Olive Merchant

Income Statement (extract) for the month ended 31 May 2019

$ $

Revenue


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Question 6 (6marks)

Discussion


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Question 7 –continuedTURN OVER


Explanation


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b. 9marks

Working space

The Wedding ShopGeneral Journal

Date 2019




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c. 3marks

Accounting principle

Explanation

d. 3marks

Explanation

e. 3marksThe Wedding Shop

Balance Sheet (extract) as at 30 June 2019

$ $

Current Liabilities

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Stock Control

Date Cross-reference Amount Date Cross-reference Amount

Creditors Control

Date Cross-reference Amount Date Cross-reference Amount

b. 2marks

Working space

Sava TradersCash Flow Statement (extract) for the year ended 30 June 2019

$ $

Cash Flows from Financing Activities


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c. 3marksSava Traders

Variance Report (extract) for the year ended 30 June 2019

Cash Flows from Operating Activities Budgeted Actual Variance Favourable/Unfavourable

Advertising 25000 18000

Wages 110000 120000

ReceiptsfromDebtors 980000 945500

d. 3marks

Explanation

END OF ANSWER BOOK

pages - 2019 accounting-nht written examination · 2019. 7. 10. · 2019 accounting exam qb (nht) 2...

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