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will cover all of the basic material covered in lectures for weeks 1 to 6 of the course. The exam is a total of two hours and ten minutes. Venue Upper tea house, Lower tea house and Vista room at Randwick Racecourse* Time Two exam seatings Students with Students with Surnames beginning Surnames beginning Ab - Lew Li - Zu 9:00 am 12:00 pm 9.10am 11:10 am 12:10 pm 2:10 pm
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The recommended readings, additional readings, tutorial and preparation questions for week 7 and lecture content are all examinable: WK1 L01 Welcome to Accounting 1A L02 General purpose financial reports WK2 L03 The balance sheet L04 Transaction analysis: A + L = OE WK3 L05 The profit and loss statement L06 Transaction analysis: Debits & Credits WK4 L07 Financial reporting principles L08 The accounting cycle WK5 L09 Adjusting the accounts L10 Preparing financial statements WK6 L11 Completing the accounting cycle L12 The worksheet and Solaire (The Solaire PS itself will not be examined in this paper, but the concepts discussed in this lecture will) The exam will be two hours and will be in the same format as the final exam. A copy of a the Mid-session paper from ACCT1501, Session 2, 2004 follows, and please not that the exam question 5 is a bank reconciliation not included as an examinable topic this session. No supplementary exam will be available for the mid-session. GOOD LUCK!!!
in pencil. Question 1 consists of 15 multiple choice questions. Please place your student ID on your desk. completing all the personal details. There are five parts to this exam worth 100 marks. Question 2. 3. This exam is two hours plus 10 minutes reading time.THE UNIVERSITY OF NEW SOUTH WALES School of Accounting ACCT 1501: ACCOUNTING AND FINANCIAL MANAGEMENT 1A Mid-Session Examination Solution Session 2. Questions are not of equal value. You need to answer these on the preprinted answer sheet. 2004 BEFORE commencement of the exam you should enter the following details below: FAMILY NAME: TUTORIAL NUMBER: STUDENT ID NUMBER: FIRST NAME: (see back cover of exam for tutorial list) . using either pen or pencil. After this time you may leave only when instructed by the supervisor. You may leave the exam room at any time up to 15 minutes before the time the exam is due to conclude. PLEASE WRITE CLEARLY 2 . 4 & 5 are to be answered in the spaces provided in the exam booklet. . This exam is worth 15% of your final composite mark.
000 Cr Cash $25.000: Cr Management Consulting Revenue $25.e. assets and liabilities were understated but shareholders’ equity was not affected d. Cr Accrued Consulting Revenue $25.000. e. On June 15. Dr Management Consulting Revenue $25. As of June 30 Greer had not recorded the transaction. c. Which of the following is not an essential characteristic of an asset? a. assets and shareholders’ equity were understated but liabilities were not affected e. e. Which of the following categories is not an example of good internal control a.000 in advance for a management consulting engagement. Maintain effective records Rotation of duties Segregate duties Insurance of important assets None of the above 2. accepted delivery of inventory which it purchased on credit.000.000. 2004 would be a. b. shareholders’ equity was the only item affected by the omission c. She received cash of $25. d. b. c. The effect of this error on its balance sheet for June 30. e. d. There must be a future economic benefit It must be legally owned by the entity The entity must have control over the asset The transaction giving control over the asset must have occurred None of the above i. b. assets and shareholders’ equity were overstated but liabilities were not affected b. Cr Unearned Consulting Revenue $25.Question 1 Multiple Choice 30 Marks To be answered on the pre-printed multiple choice answer sheet.000 Dr Cash $25. The best way to record this transaction is: a. d. all are essential 3 . Jo Punter is a licensed CPA. 1.000 Dr Cash $25. None of the above 3. Dr Cash $25. c. 2004 Greer Co.000 None of the above 4.
$32.000 b. $27. liability and shareholders’ equity accounts None of the above During the financial year ended 30th June 2003 Anderson & Itz Ltd commenced business.000 for rent for July and August 2003. In addition. e. $25.000 for rent. c.000 d. Provide information that is useful in assessing cash flow prospects. $32. 4 . None of the above. Provide information on the liquidation value of an enterprise. The post-closing trial balance contains non-zero balances for: a. d. e. and changes to them.000 e. b. None of the above 8. Provide information about enterprise resources. c. $25.000 for work it had done but not yet been paid for. salaries and other expense incurred during the financial year and a further $4.000 c.000 c. Provide information that is useful in investment and credit decisions. The company paid $45. During the year the company received $72.000 for services rendered during the year and at the end of the year it was owed $5.000 b. 2003? a. Which of the following statements is not an objective of financial reporting? a. Only the revenue. b.000 d. the company received $2. claims to those resources. expense and dividends accounts Only the revenue and expense accounts Only asset and liability accounts Only the asset.000 for an assignment to be completed in July 2003. d. $30. What was the net profit of Anderson & Itz Ltd on a cash basis for the year ended 30th June. $30. What was the net profit of Anderson & Itz Ltd on an accrual basis for the year ended 30th June. 7. $27. 2003? a.000 e.5. All of the above are objectives of financial accounting 6.
000.000 Cr Inventory $100. b.000 in March covering charges for March. The journal entries to record the sale are: a.000 Cr Sales Revenue $150.000 Dr Sales Revenue $150. It will be paid in April (3) Paid commission of $15. Dr COGS $100. b.000 Cr COGS $100. $55.000 Cr Accounts Receivable $150.000 Dr COGS $100.000 Cr Inventory $100.000 in March of which $10. c. Dr COGS $100.000 5 . d. Dr COGS $100.000 related to work done in Feb (2) Received an electricity bill of $5.000 relating to February Sales a. Calculate total expenses for the month of March given the following: (1) Paid wages of $60. e. e.000 Dr Accounts Receivable $150. Inventory purchased for $100.000 Dr Cash at Bank $150. d.000 d.000 Cr Cash at Bank $150.9. Adjusting entries Invoices Transactions Journals Data entry 10.000 Cr Sales Revenue $150.000 e. A perpetual inventory system is maintained.000 $80.000 $65.000 $60. A basic accounting cycle could involve the following steps: (1) Source Documents (2) (3) Ledgers (4) Trial Balance (5) Adjusting Journal Entries (6) Closing Journal Entries (7) Post-closing Trial Balance (8) Financial statements Step 2 would best be described as: a.000 c.000 $85.000 Cr Accounts Receivable $150.000 11.000 Cr Inventory $100.000 Cr Inventory $100. c.000 b.000 Dr Sales Revenue $150.000 is sold on credit for $150. Dr Cash $150. Dr Inventory $100.
4 million. At the end of the month. c.000 None of the above 13. Given the following information related to Newland Ltd. Dr Supplies expense $24.65 Dr Miscellaneous expense $16.000 Accounts Payable $300.000 a.000 Accounts Receivable $400.20. Dr Supplies expense $24.85 Cr Supplies expense $40. The following expenses were incurred during the month: Snacks $16. Which of the following is a typical closing entry? a.85 Cr Miscellaneous Expense $40.85 c. Dr Dividends Declared Cr Retained Profits e.400.000 Cash $400. a glance over the Statement of Financial Position reveals that there is a large increase in net receivables.300. Cash profit will be lower than accrual profit 15. Which of the following is the most likely outcome? a. Dr Profit and Loss summary Cr Insurance expense d. 6 . e.85 d. $1. and Supplies $24.20 Cr Petty Cash $40. Both a. Hania Limited announced a strong accrual profit of $17. what is the balance of shareholders equity? Property Plant and Equipment $1. Petty Cash is reimbursed. b. Accrual profit will be understated d.12. What is the correct journal entry to replenish the fund? a.65 Dr Miscellaneous expense $16. Dr Petty Cash $40. Accrual profit will equal cash profit f.20 Cr Cash $40. Cash profit will be higher than accrual profit c. Dr Profit and Loss summary Cr Supplies on hand b.000 Loans to the company $200. Dr Petty Cash $40.85 Cr Cash $40. Cash profit will be overstated b. Dr Profit and Loss summary Cr Prepaid insurance c. Spendthrift Ltd has a petty cash fund.85 e. d.000 $1. and b.400.000 $1.000 $2. None of the above 14.300.85 b. However.600.65.
9. Reporting information that is faithfully representative of economic events. B. Reliability 1. Preparing consolidated statements. F G I G A M H C 3. Industry practices M.Question 2 Key Conceptual Terms 10 Marks Various accounting assumptions. A. and characteristics are listed below. I. 10. Recording a transaction when goods or services are exchanged for cash or claims to cash. and future events. B Historical cost Relevance Monetary unit Going concern Comparability F. metal office wastebaskets having a life of ten years. H. principles. J or H 2. 7 . 6. Economic entity Materiality Matching Accounting period Revenue recognition K. The ability to add financial statement figures relating to different time periods. when acquired. 5. Select those which best justify the following accounting procedures and indicate the corresponding letter(s) in the space(s) provided. Full disclosure L. Establishment of an allowance for doubtful accounts. 7. Expensing. D. A letter may be used more than once or not at all. 8. The preparation of timely reports on continuing operations. C. The quality that helps users make predictions about present. E. Reporting assets at original acquisition values. G. Reporting those items that are significant enough to affect decisions. past. J. 4. constraints.
with interest at 8%. The loan was taken on October 1. you are to A.520 20. Provisions of Ski Fever’s lease contract specify that rent payments must be made one month in advance. 2004 the January rent has been paid.000 9. Salesmen are paid commission of 10% of sales.000 7. Interest is payable annually. 2004.000 25.050 40.Question 3 Revenue and Expense Adjustments 24 Marks The unadjusted trial balance of Ski Fever Company as of December 31. 9 .200 2.400 330. 2004 ACCOUNTS Cash Short-term Investments Accounts Receivable Allowance for Doubtful Debts Inventory Supplies on Hand Equipment Accumulated Depreciation Accounts Payable Loan Payable Share Capital Retained Earnings Cost of Goods Sold Office Salaries Sales Commissions Rent Expense Misc.410 Required: As the accountant for Ski Fever Company. 2004 is presented below: Ski Fever Company Unadjusted Trial Balance December 31.200 14.410 428. A physical stock take of supplies as at December 31 showed $280 are currently in stock. Prepare adjusting journal entries based on the following data: (10 Marks) a. c.040 49. d.800 1. 2004 Ski Fever entered into a 12 month lease of a show room from Snow Hut Limited. Expense Rent Revenue Sales TOTALS Unadjusted Trial Balance DR CR $ $ 19.340 238. On September 30.800 4. (Assume that the value of supplies is material) b.800 29. e.400 4. On November 30.100 428. 2004 Ski Fever received $14. Commissions on sales made for December have not yet been paid. December sales were recorded at $28.000 420 16.500 4.000. The monthly rent payment amounts to $900 per month.400 rent from its lessee for an eighteen-month lease beginning on that date.250 40. As of December 31.
.... 85 Interest Payable ..An adjustment of (1..... Supplies Expense ...000 before adjustment.. The balance in the Sales Commissions account is $29.........400 ÷18 = $800.............................000).... The correct ending balance is $280........010 Sales Commissions Payable ………………….................................. 1 amount..........................010 10 .......... 900 e......................... and the lease has been paid in advance............ 900 Rent Expense .010......760 Supplies .... 1.....000 Unearned Rent Revenue 12...100.. Prepaid Rent .......................... Rent Revenue . Since signing the lease only three months have passed or 15 months of rent remains unearned ($12........ Sales Commissions .............. Commissions on sales for the last week of December have not been paid........ The monthly rent is equal to $14......... ½ for each account a.... ......... This provision has been complied with as of Dec......... interest is 8 %............. 10% of sales is 10% × $330..A... Provisions of a lease contract specify rent payments must be made one month in advance........... indicating that $4.....010 of commissions are accrued but unpaid............... 12. with monthly payments at $900/mo........................ Adjusting journal entries : 2 marks for each JE......................... 760 b..... It has all been recorded as Rent Revenue.040-280) $760 is required to account for supplies that have been used...... Rent revenue for eighteen months is $14. Since the trial balance contains no account for Prepaid Rent.......................... 2003.400...... The loan was taken out on October 1...08 × 3/12 = $85) 85 d. due Feb...........250 × .... which is $33................250......... the $900 lease payment has apparently been debited to Rent Expense.... 2004...... bearing interest at 8%.............................. ($4....000 c... rather than unearned rent revenue... 4..... 31......... An adjustment must be set up for the Prepaid Rent.... 4.......... Loan is 4........ need interest expense October 1 to December 31 – 3 months Interest Expense . Salesmen are paid commissions of 10% of sales..
000 420 39.580 16.010 20.745 96.165 96.B.500 120. (14 Marks) Ski Fever Pty Ltd Statement of Financial Position as at December 31 1 mark ASSETS 1 mark for CA/CL Current Assets Cash Prepaid Rent Short-term Investments Accounts Receivable Less Allowance for Doubtful Debts Net Accounts Receivable Inventory Supplies on Hand Total Current Assets Non-Current Assets Equipment Less Accumulated Depreciation Written Down Value 19.495 4. Prepare a Statement of Financial Position as at December 31.165 11 .050 40.000 4.340 Plus Profit for the Year 30.910 TOTAL ASSETS 5 marks LIABILITIES Current Liabilites Accounts Payable Unearned Rent Revenue Interest Payable Sales Commission Payable Total Current Liabilities Loan Payable TOTAL LIABILITIES 2 marks NET ASSETS SHAREHOLDERS' EQUITY Share Capital Opening Retained Earnings 25. 2004.800 900 4.250 24.000 9.500 39.400 12.165 56.825 Closing Retained Earnings SHAREHOLDERS' EQUITY 5 marks 40.410 49.800 280 81.000 85 4.
Required: A.Question 4 Accounts Receivable 20 Marks McChuck Computer Sales supplies the following information: At 1 July 19X7 Accounts Receivable totalled $80. Ageing analysis of the $175.000. on the assumption that the end-of-year-Allowance for Doubtful Debts is to be based on an ageing analysis of Accounts Receivable.700 900.700). At 30 June 19X8 Accounts Receivable totalled $175.90 91 .000 and whose account is only 60 days old has been declared bankrupt.080.0000 170.60 61 .000 1.120 Over 120 Amount $98 000 32 000 30 000 6 000 9 000 Doubtful Debts 1% 2% 5% 50% 60% Information relating to the year ended 30 June 19X8: Credit Sales Bad Debts Written Off Cash Received from Debtors Sales Returns & Allowances $1 000 000 1 700 900 000 3 300 In addition.300 5. Date Particulars 1-Jul o/bal Sales Accounts Receivable Amount Date 80.080.000.000 Particulars ADD Cash SR&A ADD Bal 1.000. It is highly probable that the whole amount will be lost. Show the other account(s) affected by each ledger account entry.000 170.30 31 .000 (after debt write-offs of $1. a debtor who owes $5.000 Amount 1. (17 Marks) Using T-accounts show the Accounts Receivable and the Allowance for Doubtful Debts accounts as they would appear after all entries (including adjusting entries) have been prepared and posted.000 1. No entry has yet been recorded for the likely loss. while the Allowance for Doubtful Debts was $2.000 revealed the following: Days Outstanding: 0 .000 3.0000 Allowance for Doubtful Debts 12 .
700 5.120 bal 11.000 11. below. which is worth five marks including calculation Calculation of ADD days 30 60 90 120 Over 120 amount 98000 27000 30000 6000 9000 factor 1% 2% 5% 50% 60% 980 540 1500 3000 5400 11420 170000 Total= B. ( 3 Marks) List three controls which can be applied to make help ensure that accounts receivable is correctly stated.420 18. or other reasonable controls up to 3 marks. 1 mark each for: regular reconciliation of subsidiary ledgers sending of customer statements follow up disputed items regular monitoring of payments regular monitoring of doubtful amounts. 13 . ½ mark for amount and ½ mark for other account named excluding closing balance.000 16.Date Particulars ADD ADD bal Amount 1.120 18.169 Particulars o/bal BDE Amount 2. except the BDE.420 1 mark for each correct entry .120 Date 38.
341DR 2.Question 5 Bank Reconciliation 16 Marks The bank reconciliation statement for JPG Pty Ltd at March 31 is shown below.280DR 1.624 The bank statement received at the end of April shows the following: Bank Statement Statement Period 31/3/01 .756DR 2.30/4/01 $ 3.521 274 591 132 997 4.901DR 2.053DR 2.027DR 3.923DR 2.361DR 2.812DR 2.627DR 2.521DR 2.551DR 2.179DR DR CR 31-Mar 1-Apr 2-Apr 4-Apr 5-Apr 7-Apr 8-Apr 11-Apr 12-Apr 13-Apr 15-Apr 16-Apr 17-Apr 19-Apr 20-Apr 21-Apr 23-Apr 24-Apr 25-Apr 27-Apr 29-Apr 30-Apr Balance Brought forward Cash/ cheque 6971 Cash/ cheque Cash/ cheque 7004 7003 Return – insufficient funds 7007 Cash/ cheque 7002 Dividend.electronic transfer Cash/ cheque 6995 7008 Cash/ cheque 7006 Cash/ cheque 7009 Cash/ cheque 7011 Cash/ cheque 7010 7012 Interest on Overdraft 894 274 621 524 467 512 77 111 470 98 190 152 132 474 423 661 609 392 249 163 311 187 401 152 14 .453DR 2.444DR 2.735DR 2.223DR 2.815DR 2.836DR 2. JPG Pty Ltd Bank Reconciliation as at March 31 $ Debit Balance as per bank statement Plus unrepresented cheques: 6971 6982 6995 Less Outstanding deposit Credit Balance as per company records $ 3.750DR 2.439DR 2.209DR 2.392DR 3.518 (894) 3.587DR 2.626DR 3.
Interest on overdraft Deduct: Receipts reported on bank statement but not entered in company records: Dividend Adjusted bank balance • • (10 Marks) 2971 77 152 229 3 200 190 3 010 CR • One mark for correct starting balance. What is the April 30 adjusted cash balance? Ending balance per company records (3 624 + 3 849 – 4 502) Add: Decreases reported on bank statement but not entered in company records Cheque returned – N. note that the starting balance is a credit balance Cr 3. Alternatively if you put is a book credit (“negative” beginning balance).502 ) and cash payments ( add 3. Note in the answer guide we begin with a bank “debit” therefore we are adding unpresented cheques and deducting outstanding deposits. you will then add in transit deposits and subtract outstanding cheques.F.The cash receipts and cash payments journals have recorded for April: Cash Receipts Date $ 3-Apr 621 4-Apr 524 7-Apr 895 12-Apr 470 15-Apr 152 19-Apr 423 22-Apr 609 23-Apr 249 26-Apr 311 29-Apr 248 4502 Date Cash Payments Cheque No.624 1 ½ marks each for correct treatment of cash receipts ( deduct 4.add 77. 1-Apr 7002 4-Apr 7003 5-Apr 7004 7-Apr 7005 8-Apr 7006 11-Apr 7007 14-Apr 7008 18-Apr 7009 22-Apr 7010 24-Apr 7011 28-Apr 7012 30-Apr 7013 $ 98 512 467 351 661 111 474 392 187 163 401 32 3849 The “Return-NSF” item on the bank statement on April 11 was a dishonoured cheque from a customer. 2 marks each for the adjusting items: Cheque NSF. Required: 1. Interest – add 152 and dividend – less 190 15 .S.849 ) People need to be careful when the bank account is in debit (credit in your books).
2. Prepare journal entries to adjust the records of the company Journal Cash at Bank Dividend revenue Accounts Receivable/ Debtors – cheque returned Interest Expense Cash at Bank $ 190 77 152 $ 190 229 (6 Marks) 2 marks for first JE 4 marks for second. or may be presented as two separate JE 16 .
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