Student name:

Student ID

Campus:

Associate Degree of Accounting

Subject number: ACACC102A

Subject name: Accounting Foundations II

Semester 1, 2014

Time allowed 1 hour plus 5 minutes reading time

General instructions Marks

Write your answers using black or blue pen Total marks: 50 (scaled to 15%)

Write your name and campus at the top of Section 1: 5 Marks

each page 5 x multiple choice questions

Section 2: 30 Marks
3 x Short answer theory questions

Section 3: 5 Marks
1 x Practical question

Section 4: 10 Marks
1 x 3 part practical question

Examination aids permitted as indicated

Standard Bilingual Technical Programmable Non-

dictionaries dictionaries dictionaries calculators programmable
calculators
Yes Yes No No Yes

Other examination aids permitted

None

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 ACACC102A Accounting Foundations II

ACACC102A Accounting Foundations II

Assessment Event 2 – Mid-Semester Exam
ANSWER BOOKLET

QUESTION 1

Multiple Choice - Answer all the questions. 1 Mark each

Please select the correct answer by putting a colouring in the relevant letter:

EXAMPLE

PLACE YOUR ANSWER BELOW

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 ACACC102A Accounting Foundations II

QUESTION 2

A) The textbook discusses two types of inventory systems. In your own words, identify
and advise the main differences between the two methods. (5 marks each)

Method 1:

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 ACACC102A Accounting Foundations II

QUESTION 2

A) The textbook discusses two types of inventory systems. In your own words, identify
and advise the main differences between the two methods. (5 marks each)

Method 2:

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 ACACC102A Accounting Foundations II

QUESTION 2

B) Accounts receivable should be recorded in terms of their future economic benefits

(their gross amount less an allowance for expected bad debts). Two methods may be
used to record the actual amount outstanding and the fair value of the accounts
receivable. Distinguish between each of these methods and provide an example of
the accounting procedure for each (general journal entry). (5 marks each)

(i) Method 1

Example:

$ $

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 ACACC102A Accounting Foundations II

QUESTION 2

B) Accounts receivable should be recorded in terms of their future economic benefits

(their gross amount less an allowance for expected bad debts). Two methods may be
used to record the actual amount outstanding and the fair value of the accounts
receivable. Distinguish between each of these methods and provide an example of
the accounting procedure for each (general journal entry). (5 marks each)

(ii) Method 2

Example:

$ $

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 ACACC102A Accounting Foundations II

QUESTION 2

B) In your own words define ‘the residual value of an asset’ under IAS16/AASB116. (10
marks)

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 ACACC102A Accounting Foundations II

QUESTION 3

Jack Jones, CFO of Austral Blinds Ltd, has asked you, as the accountant, to prepare the
general journal entry to increase the allowance for doubtful debts from 1% to 1.25% of the
closing Accounts Receivable value for the period. An extract of the trial balance of the
company as at 30th June 2014 shows:

Accounts Receivable $792,581

Allowance Doubtful Debts $ 6,843

Jack has also advised that Fred Rose Kitchens P/L is to be written off as a bad debt in this
financial year. The balance of Fred Rose’s account is $2,200

REQUIRED:

Using the allowance for doubtful debts method you are required to show the adjusting
general journal entry required. (Whole dollars only).

$ $

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 ACACC102A Accounting Foundations II

QUESTION 4
Vietnam Pty Ltd purchased a truck for cash for $52,000 plus 10% GST on January 1, 2010. At
the time of purchase it was estimated that the useful life of the vehicle would be 100,000
kilometres and it was expected that it would travel that distance over four years. At the end
of four years of useful life it was calculated that the truck could be sold for $12,000. The
accounting period for Vietnam Pty Ltd is the financial year.

The actual distance covered by the truck was as follows:

Year ending 30 June:

2010 10,000 kilometres
2011 25,000 kilometres
2012 30,000 kilometres
2013 22,000 kilometres
2014 8,000 kilometres

REQUIRED:

a) Calculate depreciation for the years ending 30th June 2010 to 30 June 2014 using the
units of production method. (4 marks)

Workings:

Calculation worksheet:

Year ended 30 June $

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 ACACC102A Accounting Foundations II

b) Prepare general journal entries to record the purchase of the truck and depreciation,
using the straight-line method, for the period 1 January 2010 to 30 June 2012 (4 marks)

c) Prepare an extract from the balance sheet for the vehicle as at 30 June 2012 using the
straight-line method of depreciation. (2 marks)

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