AF101: Introduction to Accounting & Financial Management - Part 1

FINAL EXAMINATION
Semester 1, 2015
FACE TO FACE & PRINT MODES

Student Name: …………………………………………...

Student ID: ……………………………………………….

SECTION A MULTIPLE CHOICE QUESTIONS [25 MARKS]

Clearly circle the best answer. Each question is worth one (1) mark.

1. A B C D
2. A B C D
3. A B C D
4. A B C D
5. A B C D
6. A B C D
7. A B C D
8. A B C D
9. A B C D
10. A B C D
11. A B C D
12. A B C D
13. A B C D
14. A B C D
15. A B C D
16. A B C D
17. A B C D
18. A B C D
19. A B C D
20. A B C D
21. A B C D
22. A B C D
23. A B C D
24. A B C D
25. A B C D

1
QUESTION 26 NON-CURRENT ASSETS 25 MARKS

Date Particulars Dr Cr
2015
30-Jun Machinery
Calculate Depreciation Exp:
$420 000 - 20 000 / 20 years = $20 000 1 mark
Number of years depreciated to 30 June, 2015:
$180 000/$20 000 = 9 years 1 mark

Buildings
Calculate Depreciation Exp:
$800 000 - 60 000 / 40 years = $18 500 1 mark
Number of years depreciated to 30 June, 2015:
$185 000 / $18 500 = 10 years 1 mark
2016
30-Jun Depreciation Expense - Machinery $ 20,000
Accumulated Depreciation - Machinery $ 20,000

Depreciation Expense - Buildings $ 18,500

Accumulated Depreciation - Buildings $ 18,500
(0.25 mark each for correct a/c & amt) X 8 2 marks

1-Jul Accumulated Depreciation $ 200,000

Machinery $ 200,000
(10 years X $20 000)

Expense on Revaluation - P/L $ 20,000

Machinery $ 20,000
[420 000 - 200 000] - 200 000

Accumulated Depreciation $ 203,500

Buildings $ 203,500
[18 500 X 11 years]

Buildings $ 123,500
Gains on Revaluation - OCI $ 123,500
720 000 - (800 000 - 203 500)

8 X 0.5mark = i.e. for each correct account 4 marks

8 X 0.25mark = i.e. for each correct amount 2 marks
Workings = 0.5 mrk each X 4 2 marks

2
 2017
30-Jun Depreciation Expense - Machinery 18000
Accumulated Depreciation - Machinery 18000
(200000-20000)/10

Depreciation Expense - Buildings 22759

Accumulated Depreciation - Buildings 22759
(720000-60000)/29
(0.25 mark each for correct a/c & amt) X 8 2 marks
Workings = 0.5 mrk each X 2 1 mark

Profit & Loss Summary 20,000

Expense on Revaluation 20,000

Retained Earnings/Capital 20,000

Profit & Loss Summary 20,000

Gains on Revaluation 123,500

OCI Summary 123,500

OCI Summary 123,500

Revaluation Surplus Reserve 123,500
(0.25 mark each for correct a/c & amt) X 16 4 marks
31-Dec Depreciation Expense - Machinery $ 9,000
Accumulated Depreciation - Machinery $ 9,000
(200000-20000)/10 X 6/12
(0.25 mark each for correct a/c & amt) X 4
Cash at Bank $ 242,000
Proceeds from Sale of Machinery $ 220,000
GST Collections/Payable $ 22,000
(0.25 mark each for correct a/c & amt) X 6
Carrying amount of machinery sold $ 173,000
Accumulated Depreciation $ 27,000
Machinery $ 200,000
(0.25 mark each for correct a/c & amt) X 6
4 marks

3
QUESTION 27 COMPANIES 20 MARKS

2016

Nov. 30 Cash Trust 214 000

Application 214 000

(420 000 @50c + 4000 shares @ $1) 0.5 mark for correct working

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

30 Application 200 000

Allotment 100 000

Share Capital *(SC) 300 000

0.5mrk for each correct a/c & 0.5 mrk for correct total amt to *SC.

30 Application 12 000

Cash Trust 12 000

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

Cash at Bank 202 000

Cash Trust 202 000

0.5mrk for each correct a/c & 0.5 mrk for correct amt

Application 2 000

Allotment 1 000

Calls in Advance 1 000

0.5mrk for each correct a/c & 0. 5 mrk for correct total amt to App.

4
Dec. 15 Cash at Bank 99 000

Allotment 99 000

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

Share Capital/Share Issue Costs 8 000

Cash at Bank 8 000

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

2017

Jan. 31 Retained Earnings 18 060

Interim Dividend Payable 18 060

(4 000 @ 6c)+ (400 000 – 4 000) @ 6c  ¾)) 0.5 mark for correct
working

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

31 Interim Dividend Payable 18 060

Cash at Bank 18 060

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

Feb. 28 Call 100 000

Share Capital 100 000

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

28 Calls in Advance 1 000

Call 1 000

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

Mar. 31 Cash at Bank 97 250

Call 97 250

0.5mrk for each correct a/c & 0.25 mrk each for correct amt

5
QUESTION 28 CASH FLOW STATEMENT 30 MARKS

a. Calculate the following:

i. Cash receipts from accounts receivable. (1 mark)

Accounts Receivable
Opening balance 70,000 Cash Received 401,000 1 mark
Credit Sales 421,000 Closing Balance 90,000
491,000 491,000
Closing Balance 90,000

ii. Cash paid to trade creditors. (2 marks)

Inventory
Opening balance 45,000 Cost of Goods Sold 151,000
Purchases 168,000 Closing Balance 62,000
213,000 213,000
Closing Balance 62,000
Trade Creditors
Cash paid 148,000 Opening balance 40,000
Closing Balance 60,000 Purchases 168,000
208,000 208,000
Closing Balance 60,000
1 MARK EACH FOR CORRECT PURCHASES & CASH PAID
iii. Cash paid for insurance. (1 mark)

Prepaid Insurance
Opening balance 5,000 Insurance expense 13000
Cash paid 16,000 Closing Balance 8,000
21,000 21,000
Closing Balance 8,000

iv. Cash paid for wages. (1 mark)

Wages Payable
Cash paid 103,000 Opening balance 7,000
Closing Balance 4,000 Wages expense 100,000
107,000 107,000
Closing Balance 4,000

6
 v. Cash paid for interest. (1 mark)

Interest Payable
Cash paid 19,000 Opening balance 10,000
Closing Balance 11000 Interest expense 20,000
30,000 30,000
Closing Balance 11000

vi. Cash paid for taxes. (1 mark)

Taxes Payable
Cash paid 26,000 Opening balance 5,000
Closing Balance 6,000 Tax Expense 27,000
32,000 32,000
Closing Balance 6,000

vii. Cash paid for land. (1 mark)

Land
Opening balance 200,000
Gain on Revaluation 50000

Cash Purchase 150,000 Closing Balance 400,000

400,000 400,000

viii. Cash paid for equipment. (2 marks)

Accumulated Depreciation
Disposal 7,000 Opening balance 45,000
Closing Balance 58,000 Depreciation Expense 20,000
65,000 65,000
Closing Balance 58,000

Equipment
Opening balance 150,000 Sale of Equip 30000
Cash Purchase 160,000 Closing Balance 280,000
310,000 310,000
Closing Balance 280,000

ix. Cash received from loan. (1 mark)

Loans Payable
Loan Repayment 150,000 Opening balance 200,000
Closing Balance 250,000 Cash borrowings 200,000
400,000 400,000
Closing Balance 250,000

7
 x. Cash paid for dividends. (1 mark)

Retained Profits

Dividends Paid -Cash 30,000 Opening balance 40,000

Closing Balance 59,000 Profit during period 49,000

89,000 89,000

Closing Balance 59,000

b. Prepare a statement of cash flows using the direct method, in accordance with the
prescribed format outlined in IAS 7. Refer to the statement of cash flows template
provided.
[18 marks]
Highland Ltd 1 mark for title
Statement of cash flows for the year ended 30 June 2015
Cash flows from operating activities 1/2 mark
Receipts from customers 401,000 1 mark
Payments to suppliers and employees - 304,000 2 marks
Cash generated from operations 97,000

Interest paid - 19,000 1/2 mark

Income taxes paid - 26,000 1 mark
Net cash from operating activities 52,000 1 mark

Cash flows from investing activities 1/2 mark

Purchase of Land - 150,000 1/2 mark
Purchase of Equipment - 160,000 1/2 mark
Proceeds from sale of equipment 19,000 1/2 mark
Net cash used in investing activities - 291,000 1 mark

Cash flows from financing activities 1/2 mark

Proceeds from issue of shares 204,000 1 mark
Proceeds from borrowings 200,000 1 mark
Repayment for borrowings - 150,000 1 mark
Dividends paid - 30,000 1 mark
Net cash from financing activities 224,000 1 mark
Net decrease in cash held - 15,000 1 mark
Cash at beginning 40,000 1 mark
Cash at end 25,000 1 mark