Foundations of Accounting | My Assignment Tutor

Foundations of Accounting ACCT101 Semester 1, 2020 Supplementary Final Examination Read the instructions below together with the more detailed Final Examinations Instructions available on the Course Hub under the ‘Assessments’ tab. Instructions Download and save this paper. Type your answers in the answer boxes provided. Save your paper as you go. This examination is worth 50 per cent of your final grade in this course. All questions have allocated marks at the bottom of the question. You must answer all questions. Do not ‘Google’ or otherwise use the internet when completing this examination. Do not collaborate with anyone, directly or indirectly, whether in person, by telephone or via the internet, while completing this examination. ACCT101Fundamentals of Accounting Semester 1,2020 Online Final Examination Read the instructions below together with the more detailed Final Examination Instructions available on the Course Hub under the Assessments’ tab. Instructions Question 1 (15 marks) Double entry accounting Write the appropriate journal entries in the Books of Account of Bondi Social Events Pty Ltd for the following. You have only been given one account that is affected by the transaction. You must insert the other account. Manly Social Events Pty Ltd. paid their rent of $12,000 for the year. Account Dr Cr Rent in advance 12000Bank A/c12000Manly Social Events Pty Ltd. paid $500 for electricity Account Dr Cr Electricity expenses 500Bank A/c500Manly Social Events Pty Ltd. purchased $12,000 of inventory on credit from a supplier. Account Dr Cr Inventory 12000Accounts payable12000Bondi Social Events Pty Ltd. repaid a Bank Loan of $1,000 Account Dr Cr Bank Loan 1000Cash1000The director of Manly Social Events Pty Inc. withdrew money for personal use with a cheque of $200. Account Dr Cr OE (Drawings) 200Bank A/c200Manly Social Events Pty Inc. recorded a $500 from a debtor who was uncollectable. Account Dr Cr Provision for Doubtful debt 500A/c Receivable500Manly Social Events Pty Inc. received and banked Sales of $500. Account Dr Cr Bank A/c 500Sales revenue500Manly Social Events Pty Ltd paid $5000 to a creditor. Account Dr Cr Accounts payable 5000Bank A/c5000Bondi Social Events Pty Ltd purchased computer equipment on credit for $1,000. Account Dr Cr Computer Equipment 1000Accounts payable1000Manly Social Events Pty Ltd received dividends of $100. AccountDrCrBank A/c100Dividends100 Question 2. (15 marks) Manly Frocks assistant accountant has prepared the following summary of account balances for you. It is now your responsibility to prepare the Financial Statements. Please prepare the Balance Sheet for the period as at 30th June 2020. Revenue 120,000 Inventory 12,460 Purchases 70,850 Wages – Office 9,500 Discount Allowed 200 Prepaid Advertising 100 Prepaid Insurance 200 Bank Charges 90 Interest Expense 750 Freight 300 PPE 5,000 Acc. Depn – PPE 1,750 Bank Overdraft 6,100 Petty Cash 100 Accounts Rec. 19,350 GST Payable 11,800 Land 31,600 Motor Vehicle 12600 Acc. Depn – MV 7 130 Accounts Payable 15,080 Drawings 6,100 Capital 29 300 Insurance expense 1 350 Advertising expense 9 100 Interest payable 150 Acc Wages – Office 500 Profit & Loss ????? Balance Sheet as at 30th June 2020Current assets :Inventory12460Prepaid advertising Prepaid insurance100 200Petty cash Acc Receiv100 1935032210Non-current assets :Land31600Plant – accumulated depreciation plantMotor Vehicle Acc. Depn – MV5000 (1750)12600 (7130)40320Total assets72530Liability : current liabilityGst payable Bank overdarft11,800 6000A/c payable Wages payable Interest payable15,080 50033580Noncurrent liability :0Total liabilities33580Net assets38950Owners equityCapital29300(-) drawings Net profit (balancing figure)(6100) ??????1575038950 Question 3 (20 marks) Cost and Management Accounting From the following information, you are required to post to the ledger accounts and balance off the accounts. The Manly Company commenced operations in July. The following information relates to its production for the month: Raw material purchased on credit $ 10,000 Raw material issued to production $10,000 Raw material issued as indirect material $5,000 Direct labour charged to production $27,000 Indirect labour charged as indirect $12,000 Factory labour payroll total $25,000 (tax payable $5,000) Factory rent paid $88,000 Depreciation on factory machinery $9,500 Factory overhead charged to production $10,000 Cost of goods sent to finished goods store $40,000 Goods sold on credit: Sales price $50,000 Cost price $25,000 Required: Complete the required journal entries. Slide 4 lecture slides – follow the arrows Inventory Asset DR up CR down AccountDrCrRaw materials control A/c payable1000010000Work in progress Factory O/H control Raw materials control10000 500015000Labour control PAYG Tax withheld Labour payable250005000 20000Labour Payable BankWIP Indirect Overhead Labour2000027000 120002000039000Factory overhead control Bank (rent paid)8800088000Factory O/H control Accumulated depreciation plant95009500Factory O/H applied Factory O/H control1000010000Finished goods Work in progress4000040000Account receivable Sales5000050000Cost of goods sold Finished goods2500025000———-=====———–———–Raw materials controlOpening balance 0 Accounts payable 25000 10000Work in progress 15000 Factory overhead control 5000 Closing balance 5000 25000Labour controlAccrued payroll 25000Opening balance 0 Work in progress 20000 Factory overhead cost 5000 25000Accrued payrollPAYG Tax withheld 25000Labour control 25000Factory overhead controlRaw materials control 10000 Labour control 10000 Bank Question 4 (10 marks) Cash Budgeting You are the management accountant for Manly Beachwear. You have determined the following likely information for the coming months. Expected purchases for the budget period are: September October November $10,000 $15,000 $25,000 Expenses to be incurred during the period: • Rent, $16,000 per month. • Wages, $18,000 in October and November. • Marketing expenses $12,000 in October, increasing to $13,000 in November. • Administration and general expenses $16,000 per month. • Financial expenses $50 per month. Other information: • Inventory is paid for in the month following purchase. • The balance of Accounts Payable on September 30 is $8,000. • Administration and general expenses include depreciation of $1000 per month. • GST owing to the ATO, to be paid in October is $5,000. • New equipment purchased in August at a cost of $50,000 are to be paid for in October. Required: From the information provided by Manly Beachwear, prepare a cash payments budget for October and November. Manly beachwearOctNovPurchases1000015000Rent1600016000Wages1800018000Marketing exp.1200013000Admin and general exp.1500015000Financial expenses5050GST5000Capital expenditure equipment50000Total payments Question 5 (15 marks) Cost Volume Profit Given the following information for Manly Beachwear Company for November: Unit Selling Price $25 Unit Variable Manufacturing Costs $10 Unit Variable Marketing Costs $5 Contribution Margin $10 Fixed Manufacturing Costs $25,000 Fixed Marketing and Administrative Costs $15,000 Sales $100,000 BE NP=0 BE TR=TC TR = VC(UNITS) +FC + PROFIT SP(UNITS)=VC(UNITS)+FC+PROFIT CONTRIBUTION MARGIN = SP-VC $25X=($10+$5)X + ($25,000+ $15000) + 0 $25X=$15X+$40000+0 ($25X-$15X)=$40000+0 $10X=$40000 X=$40000/$10 = 4000 UNITS Required: Calculate the breakeven in units. Fixed cost / contribution margin$40000/($25-$15)4000units Calculate the quantity that would produce an operating profit of $50,000. Fixed cost + require profit /contribution margin40000+ 50000/109000 Units Calculate the quantity that would produce an operating profit of 20 percent of sales dollars. Operating profit – 20% of sales dollarSP(UNITS) -VC(UNITS)=FC+NP $25X-$15X=$40000 + 20%(SP(UNITS) $25X-$15X = $40000+ (0.20*$25X) $10X-5X=$40000 5X=$40000 X=$40000/5 X=8000 Calculate the breakeven quantity if variable manufacturing costs are increased by 10 percent, assuming no changes in total fixed costs. BE NP=0 BE TR=TC TR = VC(UNITS) +FC + PROFIT SP(UNITS)=VC(UNITS)+FC+PROFITCONTRIBUTION MARGIN = SP-VC $25X=($10+$5)X + ($25,000+ $15000) + 0 $25X=$15X+$42500+0 ($25X-$15X)=$42500+0$10X=$42500 X=$42500/10 = 4250 UNITS Calculate the operating profit if 20,000 units are sold. BE NP=0 BE TR=TC TR = VC(UNITS) +FC + PROFIT SP(UNITS)=VC(UNITS)+FC+PROFITCONTRIBUTION MARGIN = SP-VC $2*20000UNITS=($10+$5)20000UNITS + ($25,000+ $15000) + NP $25*20000=$15*20000+$40000+NP ($25*20000UNITS-$15*20000UNITS)=$40000+NP NP $200000/$40000 NP Question 6 (10 marks) Management Decision Making. The management of the Manly Surf Corporation requests assistance from its economic analyst in arriving at a decision whether to continue manufacturing a certain part of an assembly or to buy it from an outside supplier who has been quoting a price of $10.00 per unit. The company’s annual requirement is 10,000 units and the costs accumulated for their manufacture are: Direct Materials $20,000 Direct Labour $20,000 Indirect Labour $10,000 Other overheads $1,000 If the parts are purchased outside, present machinery used to make the parts could be sold and its book value would be realised. This step would reduce total machinery depreciation by $5,000 and insurance by $5,000. If the parts were purchased from an outside supplier, the following additional costs would be incurred: • Freight: $ 0.50 per unit. • Indirect labour: $5,000. Required: Prepare an advice to management detailing the reasons whether they should make or buy the product? Ensure you include all calculations and the basis for your decision. Cost to make – variable costTotal $Per unit $Direct material200002.00Direct labour200002.00Indirect labour100001.00Other cost10000.1Total variable costs510005.1Incremental fixed costDepreciation50000.50Insurance50000.50Total fixed cost100001.00Total cost to makeCost to BuyMaterial cost Freight Indirect labourLess fixed cost savings Net cost of buying6100061000 20000 5000 81500 10000 715006.16.1 0.50 2.00 8.6 1.oo 7.60 Question 7. (15 marks) Audit. You have been assigned the external audit of Manly Pty Ltd. As a preliminary audit activity, you undertake a review of the financial statements of the company. Required: List the general concerns you would have as an Auditor in relation to the conducting an audit of the following transactions: Cash paid to a relative for expense reimbursement Inventory that was damaged in an accident Accounts Receivable that has not paid but is not written off as bad Property Plant and Equipment sold to a family member Accounts Payable clerk leaves the company and their work is incomplete ————————————–END OF EXAMINATION————————————–


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