MINISTRY OF FINANCE

ACADEMY OF FINANCE FINANCIAL ACCOUNTING 1

Code: 10/2021 Time allowed: 3 days

Question 1
On Mach 31st 2020, Starlight Co. aquired a land for building a factory at X1 (excluding 10%
VAT). Builing expenses were paid by cash on hand X2. Purchasing price and installation
expenese of an elevator paid by cash in bank was X3 and X4. This factory was put into use on
November 1st 2020.
Required:
1. Fill in the blank with reasonable data.
2. Give any necessary assumptions for recording and preparing financial statements relating this
transaction. Make entries of this transaction.
3. List necessary documents and accounting books relating to this this transaction.
Question 2
Fancy Co. manufactures bakery, applies perpetual inventory system and deductible VAT method.
The following information is available in the year N:

BALANCE SHEET
At 31/12/N-1
(CU: 1.000 VND)
ARTICLE BEGINNING ENDING BALANCE
BALANCE
A. ASSETS 102.140.000
I. SHORT – TERM ASSETS 60.640.000
1. Cash 26.000.000
2. Short – term receivables 29.000.000
3. Prepayment to supplier 4.000.000
4. Inventory 1.640.000
II. LONG – TERM ASSETS 41.500.000
5. Tangible fixed assets 41.500.000
+ Historical cost X1
+ Accumulated depreciation (?)
B. LIABILITIES AND OWNER’S EQUITY 102.140.000
I. LIABILITIES 15.140.000
6. Current liabilities 15.140.000
+ Payable to suppliers 14.000.000
+ Advances from customers 2.140.000
II. OWNER'S EQUITY 86.000.000
7. Capital 80.000.000
8. Retained earnings 6.000.000

1. 2nd January, Liquidated an equipment used in the Administrative department. Historical

cost: X2, accumulated depreciation: X3. Revenue from liquidation was not paid : 400.000
2. 3rd January, purchased on credit material A at total price X4 (excluded 10% VAT)
transportation expense was paid in cash on hand: 60.000. The amount of material A purchased:
2.200 kg.
3. 10th January, issued 6000 kg material A for manufacturing cloth
4. 28th Februay, purchased on credit a manufacturing equipment at total price X5 (excluded
10% VAT), transportation expense and related testing expense was paid in cash: 200.000. The
equipment was used on 1st March. Estimated useful life: 5 years. The payment of the equipment
must be made after 1 year
5. Total salary payables paid by cash: 4.000.000, in which: payables to direct labor:
1.000,000, to factory management personnel: 200,000, sales staff: 1.200,000, general
administrative staffs: 1.600,000
6. Total depreciation cost incurred in the year: 1.440.000 (excluded the depreciation cost of
the fixed asset purchased in January). In which: Depreciation cost for production department:
960,000, for sale department: 280,000, for administration department: 200,000
7. Cash paid for outside service expenses: 1.500,000. In which, the expenses incurred in
production department: 300,000, in sale department: 700,000, in administrative department:
500,000
8. In this year, 2.000 finished goods were sent to warehouse. There is no work-in-progress at
the beginning and end of the year
9. On the 20th December, sold on credit 1.800 finished goods to Sun Co. Price before VAT:
X6/unit
10. On the 25th December, received 20 returned products.

Required:
1. Complete missing information and make any necessary assumption (beginning account
balance, ending account balance, accounting policies…) to make journal entries for the above
transactions (including depreciation entries, clossing entries, if any). Calculate profit after CIT
and make double entries for this process. Knowing that CIT rate: 20%
2. Prepare Balance Sheet and Income Statement for the year N. Make comment on Victory’s
financial position
4. In case one transaction was recorded wrongly, make assumption of the wrong entry and
identify the impact of that on Balance Sheet and Income Statement (each student chooses the
transaction recorded wrongly according to his/her number in the list)

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