Bachelor of Arts in Culinary Arts DK_BCULA_7

Bachelor of Arts in Event Management DK_BEVNT_7

Bachelor of Arts in Hospitality Management DK_BHPMG_7

Stage 1 - Semester 2

May 2020

ACCT B7Z09 – Fundamentals of Accounting

Internal Examiner(s): Dr Kevin Burns

Date:

Time:

Duration:

[Please answer all questions]

Question 1
The Runway Hotel has provided you with his Trial balance for the Year
ended 31 Dec 2019.
Dr Cr
Capital 35,300
Opening Stock 3,150
Wages and Salaries 54,200
Rent 14,000
Sales 185,000
Purchases 66,000
Insurance 14,000
Gas and Electricity 9,000
Kitchen Equipment 25,000
Restaurant Furniture 18,000
Accounts Payable 5,600
Accounts Receivable 1,400
China and Cutlery 6,500
Bank Balance 14,650
225,900 225,900

1. Stock at the 31st December was valued at 2,900.

You are required to:
a) Prepare the Income Statement for the Runway Hotel for the year
ending 31st December 2019.
(10 Marks)
b) A statement of Financial Position of the Runway Hotel for year ending
31st December 2019.
(10 Marks)
(20 marks)
Question 2
The following standard recipes have been introduced in a local restaurant.
Recipe: Scones
Menu Bakery Recipe by: Baker
Type
Total 12 portions Classification Breads/Cakes
Yield
Unit Ingredients Unit Cost – Per unit
Required Euro
440g Plain Flour 1.75 Kg
25g Baking Powder 10.00 Kg
5g Sea Salt 2.20 Kg
80g Granulated 0.99 Kg
Sugar
80g Unsalted Butter 6.61 Kg
40g Sultanas 3.98 Kg
150ml Fresh Cream 0.40 100ml
150ml Milk 0.75 Litre
Egg Wash

1 Egg 0.32 Each

1 Egg yolk 0.32 Each
5g Salt 2.20 Kg
Yield 12 Portions
Recipe: Chocolate Brownies
Menu Bakery Recipe by: Baker
Type
Total 20 portions Classification Breads/Cakes
Yield
Unit Ingredients Unit Cost – Per unit
Required Euro
750 g Dark Chocolate 2.00 100g
(85% Cocoa
solids)
385g Unsalted Butter 7.45 Kg
315g Dark Muscovado 0.52 100g
Sugar
315g Caster Sugar 2.89 Kg
10 Free -range 0.32 each
Eggs
215g Plain Flour 1.75 Kg
 75g Cocoa powder 1.64 100g
2.5g Fine Salt 2.20 Kg
Yield 20 portions
Please calculate the following:
a) Calculate the cost per portion for each recipe – please show your
calculations.
b) Calculate the selling price of each item to achieve a 75% gross profit.
(20 marks)
Question 3
Consider the business of Brian. He starts up a business in January 2020 and only
trades for cash. He starts with €1,000, buys a machine for €600 makes sales of
€4000 and purchases €3200. He has no stock at the end of the year. His machine
depreciates by 20%. He has no other expenses.

Calculate

i) Brian’s Profit performance for 2020

ii) His cash performance for 2020
iii) Reconcile his cash performance with his profit performance

(20 marks)
Question 4
The following transactions occurred during the first month of operations for “Ozone
Hinterland Ltd”, a new hotel business located in the Dublin:

1) €80,000 of share capital was raised.

2) In order to provide further capital, a bank extended a loan of €40,000 to the
business.
3) Paid cash for land and buildings €99,500.
4) Purchased kitchen equipment for €20,000. €8,000 of this was paid for in cash, with
the balance owing.
5) Purchased on credit a stock of linen and uniforms for €5,800.
6) During month received revenue of €12,000 for room sales and restaurant revenue.
7) Paid €1,500 for first month’s wages.
8) Paid €300 covering one month’s interest on the bank loan.
9) Paid €1,200 insurance premium covering the first year of operations.
10) Paid €6,000 of the balance owing for kitchen equipment.
11) Purchased beverage stock of €1,500 for cash. By the end of the first month it was
determined that one-third of this stock had been sold in the restaurant.
12) Determined that during the month the kitchen had purchased €1,800 of perishable
food supplies for cash. No balance of food stock remained at the end of the month.
13) Oz Hinterland declared and paid a total dividend of €2,000.
Required:

(a) Enter these transactions on T-accounts. (10 Marks)

(b) Prepare an income statement for the first month and a balance sheet as at the
month end. (10 Marks)

(20 marks)

Question 5
Calculate the following 5 questions – please show workings
1. On 31st December 20X1, immediately prior to entering adjusting entries, the
prepaid insurance account of the White Lion Hotel has a balance of €1,200. This
concerns a payment made on 30th September 20X1 for 12 months of insurance
cover. The adjusting entry that needs to be made on 31st December 20X1 is:

A. Debit prepaid insurance €300, credit insurance expense €300.

B. Debit prepaid insurance €1,200, credit insurance expense €1,200.
C. Debit insurance expense €1,200, credit prepaid insurance €1,200.
D. Debit insurance expense €300, credit prepaid insurance €300.
E. None of the above.

2. An inventory count conducted on 31st December 20X1 has determined that the
Regal Hotel has a cleaning supplies inventory of €260. Accounting records
indicate that the hotel had €140 of cleaning supplies at the commencement of the
year and purchased €880 of cleaning supplies during the year. What amount
should be expensed for cleaning supplies in the year ended 31st December 20X1?

A. €760
B. €1,280
C. €1,020
D. €880
E. None of the above

3. An inventory count conducted on 31st December 20X1 indicated that Sports World
had €180 of office stationery at that time. Accounting records indicate that the
business had €120 of stationery at the beginning of the year and purchased
€1,040 of stationery during the year. What amount should be expensed for office
stationery in the year ended 31st December 20X1?

A. €760
B. €1,280
C. €1,020
D. €980
 E. None of the above

4. In its most recent financial year, Gold Coast Events earned €120,000 profit. Its
assets increased by €170,000 and its liabilities increased by €70,000. What was
the value of the owners’ capital contribution or dividend paid during the year?

A. €20,000 dividend paid.

B. Contribution of €20,000.
C. €10,000 dividend paid.
D. Contribution of €10,000.
E. None of the above.

5. On 1st of March an event operator purchased a sound system for €60,000. The
event operator
paid a deposit of €6,000 in cash and financed the balance with a bank loan.
Which of the following is the accounting entry to record the 1st March
transaction?

A. Debit equipment €6,000, credit cash €6,000.

B. Debit equipment €60,000, credit cash €60,000
C. Debit equipment €60,000, credit cash €6,000, credit accounts payable
€54,000.
D. Debit equipment €60,000, credit cash €6,000, credit bank loan €54,000.
E. None of the above.

(5*4 marks 20)