TS1307 Financial reports

Created: 31/05/2017 | Review date: 01/07/2018 | Version: 2017

TS1307 Financial reports

Test 2 – Question book
Chinese name:
PINYIN:
English:
Class:
Student Number:
Time allowed for this Assessment:
Time allowed: 2 hours
Total marks
This assessment will contribute up to 30% of your final mark for this unit
Test conditions
Closed book
You are required to hand up both the question and answer booklets at the end of the test
Assessment conditions:
This test will be conducted under exam conditions and students are not permitted to speak to or
copy from other students.
Misconduct as stipulated in NMIT Student Discipline Rule (NMIT/IR/11) includes “Cheating, attempting
to cheat or knowingly assisting any other student to Cheat or attempt to cheat.”
You are required to answer the questions in the answer book.
Do not remove any staples or pages from either the question or answer books.
Electronic translation dictionaries, graphics calculators and mobile phones are not permitted.
For teacher use:
Question Competent / Not yet competent Mark or NYC
1
2

A student will not receive a pass unless they are competent in every question in this Assessment

MELBOURNE POLYTECHNIC INTERNATIONAL PROGRAMS

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TS1307 Financial reports

Question 1 (20 Marks)

Using the following trial balance and additional information you are required to prepare the
general journal entries to record balance day adjustments at the 30 th June 2012.
Delco Trading – Trial Balance as at 30th June 2012.
Account Debit Credit
Sales 60,000
Sales returns 1,000
Commission revenue 2,000
Rent revenue 1,200
Purchases 19,000
Purchase returns 500
Advertising 1,000
Discount expense 550
Discount revenue 300
Cartage inwards 450
Cartage outwards 1,100
Sales wages 2,875
Stationery expense 200
General insurance 400
Electricity 400
Bad debts 200
Administration wages 1,700
Cash at bank 7,000
Debtors control 9,100
Stock (1/7/11) 10,000
Furniture – at cost 20,000
Land & buildings 92,000
Motor vehicles – at cost 20,000
Accumulated depreciation – motor vehicles 5,000
Creditors control 2,500
Mortgage on land & buildings 10,000
Capital 99,275
Drawings 2,800
Loan from L. Hodge 7,000
Interest on loan 600
Provision for annual leave 500
Allowance for doubtful debts 100
190,375 190,375
th
Additional Information at 30 June 2012:
 A trade debtor (L. Bond) who owes $100 is to be written off as a bad debt.
 Rent revenue of $400 which will not be earned until July 2012 was received in June 2012.
 Motor vehicles are to be depreciated at 22½ % p.a. using the reducing balance method.
 Furniture is to be depreciated at 15% p.a. using the straight-line method.
 Increase the provision for annual leave to $750.
 Commission revenue of $180 was earned but not yet received at the balance date.
 Electricity of $450 is owed but not yet paid at the balance date.
 Allowance for doubtful debts is to be maintained at 2% of debtors.
 Stock of stationery at 30th June 2012 is $50.
 Insurance of $2,400 for the 12 months ending 31 st March 2013 was paid on April 1st 2012.

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Question 2 (30 Marks)

Using the following Trial Balance and additional information for the business owned and operated by W.
Wang you are required to prepare:
a) A classified Income Statement for the year ended 30 th June 2011.
b) A classified Balance Sheet as at 30th June 2011.
W. Wang – Trial Balance as at 30th June 2011
Account Debit Credit
Sales 280,000
Sales returns 1,000
Commission revenue 2,200
Rent revenue 800
Purchases 80,000
Purchase returns 1,500
Fire losses 10,000
Advertising 800
Discount expense 750
Wages – office staff 50,000
Cartage inwards 250
Cartage outwards 1,100
Wages – sales staff 65,400
Stationery expense 150
Stock of stationery 50
General insurance 600
Electricity 3,600
Bad debts 200
Cash at bank 11,450
Debtors control 8,890
Stock 1/7/10 10,000
Furniture – at cost 20,000
Accumulated depreciation – furniture 3,000
Land & buildings 191,000
Goodwill 5,000
Motor vehicles – at cost 40,000
Accumulated depreciation – motor vehicles 13,900
Creditors control 7,200
Mortgage on land & buildings 93,600
Capital 138,000
Drawings 40,000
Loan from G. Gow (Due 1/5/12) 6,000
Interest on loan 700
Allowance for doubtful debts 180
Depreciation – motor vehicles 3,400
Depreciation – furniture 3,000
Annual leave expense – office staff 1,600
Doubtful debts 100
Long service leave expense – office staff 1,200
Accrued expenses 20
Prepaid expenses 100
Provision for annual leave 2,750
Provision for long service leave 1,200
Prepaid revenue 230
Accrued revenue 240
550,580 550,580

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Additional Information:
 Stock on hand at 30th June 2011 $9,000.
 Motor vehicles are used exclusively by salespersons.
 Furniture is for office use.
 Provision for long service leave is not due until 10 years.
 $5,000 of the Mortgage on land & buildings is due next year, while the balance is due the
following year.
 The fire loss resulted from a short-fall in insurance and is considered to be a ‘material’ item.

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