ACC4112 Information Technology Applications in Accounting

│LECTURE 6│
Excel: Integrated Exercises

Lesson Intended Learning Outcomes

Upon completion of the lesson, you are expected to be able to:

• Conduct cost accounting and financial analysis by advanced spreadsheet

applications in Microsoft Excel.

Instructions:

1. Open the Lecture 6 Integrated Exercise file.

2. Do NOT add or delete any row or column in the worksheets provided.

3. EACH worksheet must show the following information in the header:

(a) Left Section: Class/Class No.

(b) Centre Section: Student name

(c) Right Section: Worksheet name

4. Round up all figures (i.e. with 2 decimal places)

5. You have to save the answers in both VALUE and FORMULAE versions and adjust the
COLUMN WIDTH to display the formulae properly.

6. For formulae version, add (F) at the end of the worksheet name.

Week 6 1
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 ACC4112 Information Technology Applications in Accounting

Question 1

Part A

The comparative financial statements of EMG Limited are as follows:

EMG Limited
Statement of Comprehensive Statement
For Years Ended 31 March 2012 and 2013
2012 2013
$ $
Sales 12,035,000 14,243,200
Cost of goods sold
Opening inventory 3,500,000 2,450,000
Purchases 8,500,120 8,735,000
12,000,120 11,185,000
Closing inventory 2,450,000 2,000,000
9,550,120 9,185,000
Gross profit 2,484,880 5,058,200
Selling expenses 480,000 498,800
General expenses 360,000 280,000
Total operating expenses 840,000 778,800
Operating income 1,644,880 4,279,400
Other expenses 89,550 90,700
Profits before tax 1,555,330 4,188,700
Tax 264,406 712,079
Profits after tax 1,290,924 3,476,621
Retained earnings, 1 April 4,345,138 5,076,062
5,636,062 8,552,683
Dividends 560,000 620,000
Retained earnings, 31 March 5,076,062 7,932,683

Week 6 2
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 ACC4112 Information Technology Applications in Accounting

EMG Limited
Statement of Financial Position
As at 31 March 2012 and 2013 
2012 2013
ASSETS $ $
Non-current assets (net) 5,278,839 5,724,312

Current Assets
Inventories 2,450,000 2,000,000
Trade receivables 1,000,574 2,593,519
Prepaid expenses 79,520 88,320
Bank 211,052 2,121,032
3,741,146 6,802,871

9,019,985 12,527,183

EQUITY AND LIABILITIES

Share capital 2,340,000 2,340,000

Retained earnings 5,076,062 7,932,683
7,416,062 10,272,683
Current Liabilities
Trade payables 779,517 922,421
Dividend 560,000 620,000
Tax payables 264,406 712,079
1,603,923 2,254,500

TOTAL EQUITY AND LIABILITIES 9,019,985 12,527,183

REQUIRED:

On worksheet Q1a, fill in the information from B62 to C74.

Week 6 3
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 ACC4112 Information Technology Applications in Accounting

Part B

EMG Limited wants to develop a new product Saka. The product required $120,000 development
fund at initial(beginning) stage and $100,000 and $80,000 at end of 1st year and 2nd year
respectively. It has estimate returns of $50,000, $60,000, $80,000, $80,000 and $70,000 at the end
of 3rd to 7th years.(睇第一舊錢決定 begin 定 end

EMG Limited does not have enough cash on hand and will borrow $100,000 from the bank for the
development of Saka. Loans are offered by 3 banks with terms as follows:

Bank Loan Amount Annual Interest Rate Years

NT Bank $100,000 8% 5
Kowloon Bank $100,000 7% 6
Island Bank $100,000 6% 7

REQUIRED:

(a) In worksheet Q1b, input the amount values of the project in cells B7 to I7.入 B7 至 I7 既數
(b) If the Cost of Capital is 4%, determine the NPV value of the project in cell B9.
(c) In cell B10, use the IF function to show ‘Go’ or ‘Not go’ for the decision.
(d) Use Goal Seek to find the break-even cost of capital and record the cost of capital in cell B12.
人手打入 B12,收入同支出一樣
(e) In cell C14, reference the NPV formula in B9 and format the cells as hinder 隱形. (Hint: using
the ;;; Custom formatting type on the Number group of the Home tab).
(f) Select the range B14:C19 and create a data table to generate the new NPV based on the
varying cost of capital. (Hint: in the data table dialog box, make cell B4 (the cost of capital)
the column input cell).
(g) Input the formula in cells B27:B29. Show all values in positive number. (Hint: PMT functions
are used in B27).
(h) Name the cell B27 as Monthly_Payment; B28 as Total_Payment; B29 as Total_Interest 改名
(i) Create scenarios and Scenario Summary to show how the monthly payment, total payment
and total interest are affected based on the following assumptions:係 What if 果到整番,佢比
咩料你,你個 cell 果範圍就係佢比既料,即係下面呢 d

 Scenario ‘NT Bank’: Loan amount = $100,000, annual interest rate = 8% and duration = 5
years;

 Scenario ‘Kowloon Bank’: Loan amount = $100,000, annual interest rate = 7% and duration
= 6 years;

Week 6 4
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 ACC4112 Information Technology Applications in Accounting

 Scenario ‘Island Bank’: Loan amount = $100,000, annual interest rate = 6% and duration =
7 years.

Week 6 5
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 ACC4112 Information Technology Applications in Accounting

Question 2

You are the accounting officer of EVI department store. The general manager has asked you to
perform Cost-Volume-Profit analysis. The sale in April was 4,500 units and the selling price per
unit is $94. You are preparing the analysis for May. Here is some information of the store:

Fixed Cost Variable Cost

Advertising $120,000 Direct materials $6
Salaries $65,000 Direct labor $4
Factory Overheads $65,000 Indirect materials $2
Administrative expenses $110,000 General Selling expenses $2

REQUIRED:
(a) In Cell B15 and C15, fill in the total fixed cost and total variable cost (per unit).
(b) You predict the sale in May will be the same as April. The target operating income is $80,000.
Input the data in B18 to B20. Input the formula in B22 to B29 for CVP analysis.

A B
18 Planned sales (units) ?
19 Selling price per unit ?
20 Target operating income ?
21
22 Unit contribution margin ?
23 Contribution margin ratio (%) ?
24
25 Break-even point in units ?
26 Break-even point in sales dollars ?
27
28 Target operating income in units ?
29 Target operating income in sales dollars ?

(c) In order to analyze the relationship between sales units, total cost and operating profit, input the
data and formulae in B32:F33 as follows:

A B C D E F
31 Sales units 4,000 4,500 5,000 5,500 6,000
32 Total Cost ($) ? ? ? ? ?
33 Operating income ($) ? ? ? ? ?
34 Favorable/Unfavorable ? ? ? ? ?

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 ACC4112 Information Technology Applications in Accounting

(d) Input an IF function in B34:F34. Show “Favorable” if the operating income exceeds $12,000;
otherwise, show “Unfavorable”.

(e) Produce a line chart with mark showing( 圖 表 類 型 ) how Total Cost and Operating Income
change in response to changes in Sales Units. Your chart should show the sales volume in
horizontal axis and a legend on right side of the chart. You are also required to:

i. Add a chart title above chart: CVP chart, in 16-point bold font.
ii. Change the chart style to Style 1.
iii. Add a X axis title: Sales volume, in 12-point bold(粗體) font.
iv. Add a Y axis rotated title: Amount ($), in 12-point bold font.
v. Save the chart in a new worksheet and name it as Q2 Chart.

Week 6 7
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 ACC4112 Information Technology Applications in Accounting

Question 3

You are further required by the general manager to prepare the following budget reports.

a) Sales Budget for May 2013

b) Purchase Budget for May 2013

c) Cash Budget for May 2013

d) Budgeted Statement of Comprehensive Income for May 2013

e) Budgeted Statement of Financial Position for May 2013

From the worksheet Q3, you can find information A2:C32 as follows:

Actual and Budgeted Sales (in units) 　

March 2,500 Actual
April 3,000 Actual
May 2,100 Budgeted
June 2,400 Budgeted

The statement of financial position of April is given as follows:

Statement of Financial Position - April 2013 $
Cash 166,600
Trade receivables 261,000
Inventory 138,600
Non-current assets (net) 170,000
Total assets $736,200
　
Trade payables 300,600
Owner's equity 435,600
Total liabilities & equity $736,200

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 ACC4112 Information Technology Applications in Accounting

Some sales information is also given:

Selling price / Unit $180
Purchase cost / unit (to be paid next month) $120
Desired ending inventory 　
(% of next month's unit sales) 55%
Collections from customers: 　
Collected in month of sale 60%
Collected in month after sale 30%
Collected in two months after sale 10%
Projected cash payments: 　
Variable expenses 35% of sales
Fixed expenses (per month) $135,000
Depreciation per month $25,000
Minimum Cash ending balance at May 2013 $35,000

For the budget reports, you need to input formula on the worksheet Q3. You are required to
reference the data from B3:B32 directly.

Note: All Inventories purchases are on credit. Purchases are paid for in month after purchases. (下
個月先比錢)Variable and fixed expenses are incurred and paid for in the same month(果個月找數).
A cash balance of $35,000 should be maintained at the end of each month(每個月要有 35000
係 到 ). If the goal cannot be met, the company will borrow the exact amount needed to reach its
goal. If the company has cash balance greater than $35,000 and also has loans payable outstanding,
the amount in excess of $35,000 is paid to the bank. Monthly interest of 2% is paid on monthly
basis on the outstanding balance.借錢每個月收 2%利息

Week 6 9
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