2015 Accounting Written examination - vcaa.vic.edu.au€¦ · Friday 6 November 2015 Reading time:...

ACCOUNTINGWritten examination

Friday 6 November 2015 Reading time: 3.00 pm to 3.15 pm (15 minutes) Writing time: 3.15 pm to 5.15 pm (2 hours)

QUESTION BOOK

Structure of bookNumber of questions

Number of questions to be answered

Number of marks

10 10 100

• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpeners,rulersandonescientificcalculator.

• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.

Materials supplied• Questionbookof9pages.• Answerbookof18pages.

Instructions• Writeyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook.• Answerallquestionsintheanswerbook.

• AllwrittenresponsesmustbeinEnglish.

At the end of the examination• Youmaykeepthisquestionbook.

Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2015

Victorian Certificate of Education 2015

2015ACCOUNTINGEXAMQB 2

Question 1–continued

Question 1 (13marks)PartyTimesellsarangeofpartyballoonsandotherpartysupplies.Allstockismarkedupby100%oncost.Thebusinessreportsonamonthlybasis.ThefollowingjournalssummarisetransactionsforJanuary2015.

Cash Receipts Journal (summary)

Date 2015

Details Rec. No.

Bank Disc. Exp.

Debtors Control

Cost of Sales

Sales Sundries GST

31Jan. Totalstodate − 159800 500 62500 42000 84000 5400 8400

Theitemsinthe‘Sundries’columnwere:• GSTrefundfromtheATO$2400• Capitalcontribution$3000.

Cash Payments Journal (summary)

Date 2015

Details Chq. No.

Bank Disc. Rev.

Creditors Control

Stock Control

Wages Sundries GST

31Jan. Totalstodate – 108310 1 300 58000 19000 16800 13 400

Theitemsinthe‘Sundries’columnwere:• Loanrepayment$4200• InterestonLoan$600• AdvertisingExpense$5100• Drawings$3500.

Sales Journal (summary)

Date 2015

Debtor Invoice Number

Cost of Sales

Sales GST Debtors Control

31Jan. Totalstodate – 37500 75000 7500 82500

Purchases Journal (summary)

Date 2015

Creditor Invoice Number

Stock Control

GST Creditors Control

31Jan. Totalstodate – 56000 5600 61 600

3 2015ACCOUNTINGEXAMQB

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ThefollowingdocumentsforJanuary2015havenotyetbeenrecorded.

Party Time Party Time Party Time

Date: 31Jan.2015 Date: 31Jan.2015 Date: 31Jan.2015

CreditNote: 222 Memo: 67 Memo: 68

LCappreturnedpartysupplies.

$1800GST$ 180Total$1980

Aphysicalstocktakerevealed$48400ofstockonhandwhilethestockcards’totalwas$48100.

Wagestotalling$2100areowingtoemployees.

Signed: T Nguyen Signed: T Nguyen

a. RecordtheabovedocumentsintheGeneralJournalprovided. Narrationsarenotrequired. 7marks

b. CalculatethemissingamountforthetotaloftheGSTcolumnintheCashPaymentsJournal. 1mark

c. ShowhowtheDebtorsControlaccountwouldappearintheGeneralLedgerafterpostingtheinformationabove.

Youarenotrequiredtobalancetheaccount. 3marks

d. On3February2015,wagestotalling$6200werepaid(Chq453).

RecordthistransactionintheCashPaymentsJournal. Youarenotrequiredtototalthejournal. 2marks

Question 2 (7marks)Income Statement (extract) for the month ended 28 February 2015

Less Other Expenses $RentExpense 9000DiscountExpense 450DepreciationofEquipment 530 $9980

Additional informationThePrepaidRentExpenseaccounton1February2015hadabalanceof$12000.Thebalanceat28Februarywas$7000.

a. ShowhowthePrepaidRentExpenseaccountwouldappearintheGeneralLedgerat 28February2015aftertheaboveinformationhasbeenrecordedandpreparetheaccountforthenextreportingperiod. 3marks

b. ExplainhowDiscountExpenseandDepreciationofEquipmenteachmeetthedefinitionofanexpense. 4marks

2015ACCOUNTINGEXAMQB 4

Question 3 (6marks)Informationcontainedinfinancialreportsisrequiredtobebothrelevantandreliable;however,itmaybedifficulttoachievebothatthesametime.

Discussthisstatementwithreferencetothedepreciationofnon-currentassets.

Question 4 (18marks)GBJeanspreparesreportseverythreemonths.Allstockismarkedupby50%oncost.

Pre-adjustment Trial Balance (extract) as at 30 April 2015 Debit CreditAccumulatedDepreciationofVehicle 15200CashatBank 5500CreditorsControl 27600GSTClearing 6200InterestExpense 1800Loan 120000PrepaidSalesRevenue 3500Sales 420000Vehicle 35000Wages 95000

Additional information• Drawingsof$1200wereincorrectlypostedtotheWagesaccount.• PrepaidSalesRevenueof$2700hasnowbeenearned.• Thevehicleisdepreciatedattherateof20%perannumusingthereducingbalance

method.• On30April2015,theownertradedinthevehiclefor$12500.Anewvehiclecosting

$49500(includingGST)waspurchasedfromKerrMotors(Invoice344).• Theloanisrepayableatarateof$24000perannum.

a. PreparetheGeneralJournalentriesrequiredtorecordtheadditionalinformation. Narrationsarenotrequired. 11marks

b. PreparetheCurrentLiabilitiessectionoftheBalanceSheetasat30April2015. 4marks

c. GBJeanspreparesreportsusingtheaccrualaccountingsystem.

Outlinethreefeaturesoftheaccrualaccountingsystem. 3marks

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Question 5 (12marks)GHKSuppliesreportsannuallyon30June.Allsalesandpurchasesaremadeoncredit.Extractsfromthefinancialreportsforthelasttwoyearsshowedthefollowing.

30 June 2014 30 June 2015Income Statement NetProfit 105000 120000

Balance Sheet Current Liabilities BankOverdraft – 8000AccruedWages 1500 200CreditorsControl 85000 77000BankLoan–ATMBank – 25000Non-Current LiabilitiesBankLoan–ATMBank 50000 25000Owner’s EquityCapital 450000 620000

Additional information• Stocklevelsremainedconstant.• Alldrawingswerecash.• InApril2015,theownerhadcontributed$95000additionalcapital,comprising

$75000cashand$20000equipment.

a. PreparetheCapitalaccounttodeterminedrawingsfortheyearended30June2015. Youarenotrequiredtobalancetheaccount. 4marks

b. PreparetheCashFlowfromFinancingActivitiessectionoftheCashFlowStatementfortheyearended30June2015. 2marks

c. NetCashFlowfromOperatingActivitieswaslessthanNetProfitdespiteReceiptsfromDebtorsexceedingSalesRevenueby$5000.

Basedontheinformationprovided,explaintworeasonsforthisresult. 4marks

d. InMay2015,GHKSuppliestradedinmachineryonthecashpurchaseofnewmachinery(cost$52000plusGST).Thetrade-inallowancewas$10000.

CompletethetableprovidedtoshowhowthistransactionwouldbereportedintheCashFlowStatement. 2marks

2015ACCOUNTINGEXAMQB 6

Question 6 (8marks)TheownerofBrant’sVendingMachinesisconcernedthatthebusinessisfrequentlyshortofcashandhastodrawonitsbankoverdraftonaregularbasis.Allpurchasesandsalesaremadeoncredit.Credittermsaren/30forcreditorsand5/14,n/30fordebtors.Theaccountantprovidedthefollowinggraphtoillustrateonefactorcausingthiscashshortage.

2011 2012 2013 2014 2015year

45

40

35

30days

25

20

Debtors and Creditors Turnover

36 3839

4143

34 35

27 26 26

Debtors Turnover Creditors Turnover

a. Explainhowthetrendindicatedbythegraphhascontributedtothecashshortageproblemthatthebusinessisexperiencing. 2marks

b. Discussstrategiesthatthebusinesscouldimplementtoovercometheproblem. 6marks

Question 7 (4marks)TheDebtRatioofabusinesshasincreasedfrom40%to70%overthepasttwoyears.

Explainonepositiveeffectandonenegativeeffectthatthisincreasecouldhaveonthebusiness.

7 2015ACCOUNTINGEXAMQB

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Question 8 (14marks)GoFitPaddleboardsisanewbusinessthatwillreportmonthly.RelevantdetailsforNovember2015areshownbelow.

Long Boards Pacific Highway, Broadbeach 4218

To:GoFitPaddleboards MarinePde Melbourne3000

4November2015Taxinvoice427

Item Paddleboardpackages (board/cover/paddle)

Unitprice$750

Quantity210

Total$157500

Delivery

GST:Invoicetotal:

4200161 700$ 16170$177870

Creditterms:net30days

Additional information• InNovember,thebusinesssold200paddleboardpackagesfor$1540each(includingGST)

(Invoices1–137).• Aphysicalstocktakeon30Novembershowedninepaddleboardpackagesonhand

(Memo3).• Thesellingpriceofeachpaddleboardpackagewillbereducedto$880(includingGST)

beforethenextyear’smodelisreleasedinDecember.Afreelesson(costprice$132includingGST)willbeprovidedwitheachpaddleboardpackagesold(Memo4).

a. PreparetheStockCardforNovember. 6marks

b. PreparetheGeneralJournalentryorentriesrequiredtorecordthestockadjustment(s)arisingfromtheinformationprovided.

Narrationsarenotrequired. 4marks

c. OtherexpensesforNovembertotalled$58000(plusGSTof$1560).Thebusinessmadeonepaymentof$9750totheAustralianTaxationOffice(ATO)forGSTon29November2015.

ShowhowtheGSTClearingaccountwouldappearintheGeneralLedgerat30November2015.

Youarenotrequiredtobalancetheaccount. 4marks

2015ACCOUNTINGEXAMQB 8

Question 9 (14marks)Terry’sTimberhasrecentlycommencedreportingonamonthlybasis.Thebusinesssellsoncreditandpayscashforpurchases.Thebusinesshasprovidedrelevantaccountbalances,bothactualandbudgeted,forOctober2015.

Account balances 1 October 31 October (actual) (budgeted)AccruedWages 1700 1900DebtorsControl 48000 51000GSTClearing 600Cr notprovidedLoan–NIMBank 120000 115000Machinery 90000 90000PrepaidRent 2000 notprovided

Additional information (budgeted) for October• Thebusinessexpectscreditsalesof$50000(plusGST)inOctober.• Wagespaidwillbe$23200.• Rentispaidthreemonthsinadvanceat$2000permonthplusGST.Thenextpaymentwill

beinOctober.Therentchargedwillincreaseby10%from1Decemberonwards.• Interestontheloanis$5400perannum.ItispaidhalfyearlyinMarchandOctober.• CostofSalesis50%ofSalesRevenue.• Cashpurchasesofstockarebudgetedtobe$18000(plusGST).• Thedepreciationonthemachineryis12%perannumstraight-line.

a. PreparetheOperatingsectionoftheBudgetedCashFlowStatementforthemonthending31October2015. 7marks

b. PrepareaBudgetedIncomeStatementforthemonthending31October2015. 5marks

c. PriortoOctober2015,thebusinessbudgetedonanannualbasis,butnowitbudgetsonamonthlybasis.

Statetwobenefitsofpreparingbudgetsonamonthlybasisinsteadofanannualbasis. 2marks

9 2015ACCOUNTINGEXAMQB

Question 10 (4marks)WDBootssellsarangeofworkbootstobusinessesandthepublic.InJanuary2015,thebusinessmovedtosmallerrentedpremisestoreducecostsandcommenceonlinesales.Thebusinesswillrequireasignificantcomputerupgrade.Theownerofthebusinesshopesthatthegrowthofonlineshoppingwillenablethebusinesstomaintainexistingsaleslevelsin2015.Thefollowingfinancialindicatorshavebeencalculated.

31 December 2013 2014 2015WorkingCapitalRatio 3:1 2.9:1 2:1StockTurnover 60days 62days 41daysReturnonAssets 15% 15% 18%

Explainhowthechangesinthebusinessoperationshaveledtotheresultsabove.

END OF QUESTION BOOK

Instructions

• Aquestionbookisprovidedwiththisanswerbook.• Answerallquestionsinthespacesprovidedinthisbook.• Writeyourstudent numberinthespaceprovidedaboveonthispage.• RefertoInstructionsonthefrontcoverofthequestionbook.

Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.

©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2015

ACCOUNTINGWritten examination

Friday 6 November 2015 Reading time: 3.00 pm to 3.15 pm (15 minutes) Writing time: 3.15 pm to 5.15 pm (2 hours)

ANSWER BOOK

SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2015

STUDENT NUMBER

Letter

2015ACCOUNTINGEXAMAB 2

THIS PAGE IS BLANK

3 2015ACCOUNTINGEXAMAB

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THIS PAGE IS BLANK

2015ACCOUNTINGEXAMAB 4

Question 1 –continued

Question 1 (13marks)a. 7marksParty TimeGeneral Journal

Date 2015

Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

b. 1mark

Working space

Total of the GST column in the Cash Payments Journal $

5 2015ACCOUNTINGEXAMAB

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c. 3marksDebtors Control

Date 2015

Cross-reference Amount Date 2015

Cross-reference Amount

1Jan. Balance 12200

d. 2marksCash Payments Journal (summary)

Date 2015

Details Chq. No.

Bank Disc. Rev.

Creditors Control

Stock Control

Wages Sundries $

GST

31Jan. Totalstodate – 108310 1300 58000 19000 16800 13400

2015ACCOUNTINGEXAMAB 6

Question 2 (7marks)a. 3marks

Prepaid Rent Expense

Date 2015

Cross-reference Amount Date 2015

Cross-reference Amount

b. 4marks

Explanation

7 2015ACCOUNTINGEXAMAB

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Question 3 (6marks)

Discussion

2015ACCOUNTINGEXAMAB 8

Question 4 (18marks)a. 11marks

Working space

GB Jeans General Journal

Date 2015

Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

Question 4 –continued

9 2015ACCOUNTINGEXAMAB

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b. 4marksGB Jeans

Balance Sheet (extract) as at 30 April 2015

Current Liabilities $ $

c. 3marks

Outline

2015ACCOUNTINGEXAMAB 10

Question 5 –continued

Question 5 (12marks)a. 4marks

Capital

Date Cross-reference Amount Date Cross-reference Amount

b. 2marksGHK Supplies

Cash Flow Statement (extract) for the year ended 30 June 2015

$ $

Cash Flow from Financing Activities

11 2015ACCOUNTINGEXAMAB

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c. 4marks

Reason 1

Reason 2

d. 2marks

Cash Flow Statement Item Inflow/Outflow/No effect Amount ($)

OperatingActivities

InvestingActivities

FinancingActivities

2015ACCOUNTINGEXAMAB 12

Question 6 (8marks)a. 2marks

Explanation

b. 6marks

Discussion

13 2015ACCOUNTINGEXAMAB

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Question 7 (4marks)

Positive effect

Negative effect

2015ACCOUNTINGEXAMAB 14

Question 8 –continued

Question 8 (14marks)a. 6marks

Working space

Stock Card

Product: Paddleboard Package Cost Assignment Method: FIFO

Date 2015

Details IN OUT BALANCE

Qty Cost Total Qty Cost Total Qty Cost Total

b. 4marksGeneral Journal

Date 2015

Details General Ledger Subsidiary Ledger

Debit Credit Debit Credit

15 2015ACCOUNTINGEXAMAB

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c. 4marks

Working space

GST Clearing

Date 2015

Cross-reference Amount Date 2015

Cross-reference Amount

2015ACCOUNTINGEXAMAB 16

Question 9 –continued

Question 9 (14marks)a. 7marks

Working space

Terry’s Timber Budgeted Cash Flow Statement (extract) for the month ending 31 October 2015

$ $

Estimated Cash Flows from Operating Activities

Estimated Net Cash Flows from Operating Activities

17 2015ACCOUNTINGEXAMAB

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b. 5marksTerry’s Timber

Budgeted Income Statement for the month ending 31 October 2015

$ $

Revenue

c. 2marks

Benefit 1

Benefit 2

2015ACCOUNTINGEXAMAB 18

Question 10 (4marks)

Explanation

END OF ANSWER BOOK