2017 Accounting Written examination - vcaa.vic.edu.au · Provide one positive factor and one...
Transcript of 2017 Accounting Written examination - vcaa.vic.edu.au · Provide one positive factor and one...
ACCOUNTINGWritten examination
Friday 10 November 2017 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
8 8 100
• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpeners,rulersandonescientificcalculator.
• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.
Materials supplied• Questionbookof12pages• 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.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2017
Victorian Certificate of Education 2017
2017 ACCOUNTING EXAM QB 2
Question 1 – continued
Question 1 (19 marks)YZ Sportz sells a range of sporting gear, including off-road bikes and accessories. The XT100 BMX bike is sold for $380 plus GST.
Stock Card
Product: XT100 BMX bike Cost Assignment Method: FIFO
Date 2017
Details IN OUT BALANCE
Qty Cost Total Qty Cost Total Qty Cost Total
1 March Balance 10 160 1 600
3 March Inv. 234 4 160 640 6 160 960
9 March Inv. 242 2 160 320 4 160 640
Additional information• 12March AdeliveryofXT100BMXbikesarrived.Invoice670containedthefollowingdetails: – 10 bikes at a cost of $170 each (plus GST) – atotaldeliverychargeof$50(plusGST)• 16March Acustomer,BWest,returnedoneXT100BMXbike(CrN.243).• 20March Sevenbikesweresoldforcash(Rec.9877): – twoXT100BMXbikesfor$380(plusGST)each – fiveBV400mountainbikesfor$520(plusGST)each• 23March ThesupplierreleasedanupdatedXT100BMXbikewithbuilt-inbluetooth
datasharing.YZSportznowexpectstoselltheremainingXT100BMXbikesfor $140 (plus GST) each to clear as much of this older stock as possible (Memo 122).
3 2017 ACCOUNTING EXAM QB
TURN OVER
a. Complete the Stock Card using the additional information provided. 4 marks
b. Justifyyourtreatmentofthedeliverychargeon12March. 2 marks
c. Recordthetransactionon16MarchintheGeneralJournalprovided. A narration is not required. 3 marks
d. Withreferencetooneaccountingprinciple,explainyourtreatmentofthetransactionon 23 March. 3 marks
e. Calculate the net sales revenue for XT100 BMX bikes during March. 2 marks
f. ‘StockCardsareawasteoftime’,saidthefirst-timebusinessownerofYZSportztotheaccountant.‘IfIwanttokeepacheckonstock,Iwillgoandcountit!’
ExplainthebenefitsofusingStockCards. 3 marks
g. ThefollowinginformationisprovidedforYZSportz.
Stock Turnover
2014 2015 2016
80
70
60
50
40days
30
20
10
0
Stock Turnover (in days)
ThetrendinStockTurnovercouldbecausedbyeitherpositiveornegativefactors.
Provide one positive factor and onenegativefactorthatmayhaveledtothetrendinStockTurnovershownabove. 2 marks
2017ACCOUNTINGEXAMQB 4
Question 2–continued
Question 2 (13marks)BestChemistisapharmacyinalargeregionaltowninVictoria.Itpurchasesstockoncreditfromavarietyofsuppliersandusesacontrolaccountforcreditors.Salesarelargelyonacashbasis.
Creditorsbalancesat1April2017wereasfollows:PharmaC $4400MMHealth 6600Vitaworld 11000Westco 3630GlobalPills 13200BalanceinCreditorsControl $38830
Purchases Journal
Date 2017
Creditor Invoice Number
Stock Control
GST Creditors Control
Apr.3 SalonSupplies 4710 1650 165 1815
5 Westco 1230 850 85 935
12 Healthtabs A265 1400 140 1540
14 MMHealth 1741 2650 265 2915
18 Westco 1259 1200 120 1320
22 PharmaC BG45 560 56 616
30 Total $8 310 $831 $9 141
Cash Payments Journal
Date 2017
Details Chq. No. Bank Disc. Rev.
Creditors Control
Wages Sundries GST
Apr.1 Wages 145 8 000 8 000
8 PharmaC 146 4100 300 4400
12 Westco 147 1 800 1 800
15 Wages 148 8 000 8 000
18 Drawings 149 2000 2000
30 Total $23 900 $300 $6 200 $16 000 $2 000
5 2017ACCOUNTINGEXAMQB
TURN OVER
At30Aprilthefollowingtwodocumentshadnotbeenrecorded.
WESTCO CreditNoteNo.711Nelson Cr 26April2017 Perth
To:BestChemistFor:Returnof damagedgoods $310 GST $31 Total $341
PJ Cabinets InvoiceNo.2568Martin StreetMelbourne 28/4/17
SuppliedtoBestChemistDisplaycabinets $4750Installation $400 $5150 plusGST $515 InvoiceTotal $5665
a. RecordthetwodocumentsintheGeneralJournalprovided. Narrationsarenot required. 4marks
b. ShowhowWestco’saccountwouldappearintheCreditorsSubsidiaryLedgerafteralljournalshavebeenposted.
Youarerequiredtobalancetheaccount. 4marks
Theownerrecentlyadvisedheraccountant,‘Don’tpaythecreditorstooquickly.Theycanwaitabitlongerthanthecreditterms.Theywantourbusiness!’
c. Statetwowayscreditorsmightrespondiftheowner’sadvicewerefollowed. 2marks
d. JustifywhyBestChemistmaintainsaSubsidiaryLedgerforcreditorsbutnotfordebtors. 3marks
2017ACCOUNTINGEXAMQB 6
Question 3 (7marks)MatuaMowerssellstheMaxiMowersbrandoflawnmowers.Thebusinesssellsforcashandcredit. DocumentsrelatingtoalltransactionsforthemonthofJuly2017areshownbelow.
Matua MowersDate:6July2017Receipt No.137Supplied:14MaxiMowersFor:Cashsales Amount:$4200 plus GST: ?
Matua MowersDate:9July2017To:AglyInsuranceFor:InsuranceThis cheque:$1430(GSTincluded)Cheque No. 988
Matua MowersDate:15July2017Invoice No.605Supplied:9MaxiMowersAccount:Mike’sMowing Amount:$2700 plus GST: ?
Matua MowersDate:20July2017Credit Note No.21Returned:1MaxiMowerAccount:Mike’sMowing Amount:$300 plus GST: ?
Cals ComputersDate:22July2017Invoice No.445Supplied:ComputerequipmentAccount:MatuaMowers Amount:$5600 plus GST: ?
Victory MowersDate:23July2017Invoice No.121Supplied:20MaxiMowersAccount:MatuaMowers Amount:$4000 plus GST: ?
Matua MowersDate:31July2017Memo333Accountant–PleasepayoutstandingGSTtotheAustralianTaxationOffice(ATO)attheendofthemonth.Signed:MMatua
CompletetheGSTClearingaccountforthemonthofJuly.Youarenotrequiredtobalancetheaccount.
7 2017ACCOUNTINGEXAMQB
TURN OVER
Question 4 (3marks)Thefollowingfinancialindicatorsareprovidedfortwoseparatebusinesses.
Business A Business B
Return on Assets 24% 24%
Return on Owner’s Investment 28% 42%
ExplainhowtheReturnonAssetscanbeidenticalforeachbusinessyettheReturnonOwner’sInvestmentissignificantlydifferent.
2017 ACCOUNTING EXAM QB 8
Question 5 – continued
Question 5 (22 marks)CLU Lipsticks is a small business that sells quality lipsticks. Reports are prepared annually on 30 June. The accountant has provided the following extract from a Pre-adjustment Trial Balance as at 30 June 2017.
CLU Lipsticks Pre-adjustment Trial Balance (extract) as at 30 June 2017
Account Debit Credit
Accumulated Depreciation – Vehicle 5 634
Advertising 3 900
Bank Term Deposit (matures 30 June 2020) 12 000
Cash at Bank 18 400
Cost of Goods Sold 78 000
Debtors Control 14 620
Discount Expense 980
Drawings 45 000
GST Clearing 6 930
Interest Expense 1 700
Loan – BLD Bank 24 000
Prepaid Rent Expense 3 900
Sales 171 600
Stock Control 22 400
Vehicle 44 134
Wages 41 800
Additional information at 30 June• Thevehicleisdepreciatedatarateof25%p.a.usingthereducingbalancemethod.Thevehiclehasa
useful life of four years and an expected residual value of $4 000.• InterestontheBankTermDepositis6%p.a.andisreceivedannually.Thetermdepositwas
established on 1 October 2016.• Rentispaidinadvanceandispaidtwiceayearon1Februaryand1August.Rentis$300permonth
(plus GST).• CLULipstickswasadvisedthatdebtorChilloCosmeticsisbankruptandCLULipstickswillreceive
only 20 cents in the dollar of the $890 owed. The cash is expected to be received in August 2017.• ApaymentforWagesof$280wasincorrectlyrecordedasapaymentforDrawings.• Theownerdonated$160ofstocktothelocalkindergartenforitsannualfundraiser.Theownerhad
not recognised this entry when conducting the stocktake.• Thestocktakeshowed$21860ofstockonhand.
9 2017ACCOUNTINGEXAMQB
TURN OVER
a. ExplainthepurposeofpreparingaPre-adjustmentTrialBalance. 2marks
b. RecordtheadditionalinformationintheGeneralJournalprovided. Narrationsarenotrequired. 14marks
c. ItcanbearguedthattheinclusionofdepreciationintheIncomeStatementbreachesaqualitativecharacteristic.ItcanalsobearguedthattheinclusionofdepreciationintheIncomeStatementissupportedbyanotherqualitativecharacteristicandanaccountingprinciple.
Discuss. 6marks
2017 ACCOUNTING EXAM QB 10
Question 6 (9 marks)Puddles Pizza purchased a gas-operated pizza oven for the business on 1 August 2016 for $7 500 (plus GST). The installation cost was a further $1 500 (plus GST). The business reports annually on 30 June. The pizza oven is depreciated using the straight line method. The life of the pizza oven is estimated at five years. The accountant advised the owner to include a zero residual value.On 31 August 2017 the business sold the pizza oven for $5 400 cash.
a. Complete the Disposal of Pizza Oven account in the General Ledger. 4 marks
b. Explain why a difference occurred between the sale price and the carrying value on 31 August 2017. 3 marks
c. Explain why a zero residual value for the pizza oven would be appropriate. 2 marks
11 2017ACCOUNTINGEXAMQB
TURN OVER
Question 7 (12marks)D&BTradershasbeenexperiencingdifficulttradingconditionsoverthelasttwoyears.Thebusinesshasreportedsuccessivelossesandthebankledgeraccountat1July2016showedacreditbalanceof$46000.From1July2016,thebusinessbeganofferingcredittocustomers,resultinginincreasedsalesandasmallprofit.Duringtheyearended30June2017,theownercontributedafurther$60000cashanddidnottakeanydrawingsfortheyear.Theownerbelievesthecashpositionhasimprovedandthatthebusinessisnowoperatingsatisfactorily.ThefollowinggraphshowsNetCashFlowsfortheyearended30June2017.
Operating Activities Investing Activities Financing Activities
$150 000$125 000$100 000
$75 000$50 000$25 000
0–$25 000–$50 000–$75 000
–$100 000
Net Cash Flows for the year ended 30 June 2017
a. Calculatethe: i. netincrease/decreaseincashpositionfortheyearended30June2017 1mark ii. CashatBankledgerbalanceat30June2017. 1mark
b. Usingtheinformationanddataprovidedabove,discusstheowner’sbeliefthatthebusinessisnowoperatingsatisfactorily. 6marks
c. Justifytwo strategiesthebusinesscouldconsidertoimproveitsliquidity. 4marks
2017ACCOUNTINGEXAMQB 12
Question 8 (15marks)TippyToysisanewbusinessthatwillcommencetradinginJuly2018.Saleswillbeonacashbasiswhilestockpurchaseswillbeoncredit.Credittermsare5/14,n/30.Theownerhasprovidedthefollowingestimatesforthesixmonthsending31December2018:• Sales(allexcludingGST)areexpectedtobe$25000permonthfromJulytoOctober,then
$45000inNovemberand$65000inDecember.• Thebusinesswilluseamark-upof100%oncost.• Stockpurchasesarebudgetedtobe$130000(plusGST).• Creditorsaretobepaidpromptlyandthediscountwillalwaysbetaken.TheCreditorsControl
balanceat31December2018isestimatedtobe$15000.• Wagesexpenseisexpectedtobe$7000permonth,payablefortnightly.Anaccrualof$144
willberequiredforwageson31December2018.• Advertisingof$2000(plusGST)willbepaidinJuly2018.Afurther$9000(plusGST)will
bepaidinNovemberforathree-monthadvertisingcampaigncommencing1December2018.• Insuranceforthefirstyearwillbe$8400(plusGST),tobepaidon1July2018.• Shoprentis$2000(plusGST)permonth,payablefourmonthsinadvance,withpayments
dueonthefirstdayofJuly,NovemberandMarcheachyear.• Shopfittingscosting$45000(plusGST)willbepurchasedoncredit(Inv.Z243)andreadyfor
useby1October2018.Theshopfittingsareexpectedtohaveausefullifeoffiveyearsandaresidualvalueof$15000.Theshopfittingswillbedepreciatedusingthestraightlinemethod.
a. CalculatetheestimatedDiscountRevenueforthesixmonthsending31December2018. 1mark
b. PreparetheBudgetedIncomeStatementforthesixmonthsending31December2018. 8marks
At31December2018,theBankaccountandtheGSTClearingaccountintheGeneralLedgerwillbothhavecreditbalances.
c. PreparetheCurrentAssetssectionoftheBudgetedBalanceSheetasat31December2018. 4marks
d. Explainhowbudgetingimprovescontrolwithinabusiness. 2marks
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.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2017
ACCOUNTINGWritten examination
Friday 10 November 2017 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 2017
STUDENT NUMBER
Letter
2017ACCOUNTINGEXAMAB 2
THIS PAGE IS BLANK
3 2017ACCOUNTINGEXAMAB
TURN OVER
THIS PAGE IS BLANK
2017ACCOUNTINGEXAMAB 4
Question 1 –continued
Question 1 (19marks)a. 4marks
Working space
Stock Card
Product: XT100 BMX bike Cost Assignment Method: FIFO
Date 2017
Details IN OUT BALANCE
Qty Cost Total Qty Cost Total Qty Cost Total
1March Balance 10 160 1600
3March Inv.234 4 160 640 6 160 960
9March Inv.242 2 160 320 4 160 640
b. 2marks
Justification
5 2017ACCOUNTINGEXAMAB
Question 1 –continuedTURN OVER
c. 3marksYZ SportzGeneral Journal
Date 2017
Details General Ledger Subsidiary Ledger
Debit Credit Debit Credit
d. 3marks
Accounting principle
Explanation
e. 2marks
Working space
Net Sales Revenue for XT100 BMX bikes during March $
2017ACCOUNTINGEXAMAB 6
f. 3marks
Explanation
g. 2marks
Positive factor
Negative factor
7 2017ACCOUNTINGEXAMAB
Question 2 –continuedTURN OVER
Question 2 (13marks)a. 4marksBest Chemist General Journal
Date 2017
Details General Ledger Subsidiary Ledger
Debit Credit Debit Credit
b. 4marksBest Chemist Creditors Subsidiary Ledger (extract)
Creditor – Westco
Date2017
Cross-reference Amount Date2017
Cross-reference Amount
1Apr. Balance 3630
2017ACCOUNTINGEXAMAB 8
c. 2marks
1.
2.
d. 3marks
Justification
9 2017ACCOUNTINGEXAMAB
TURN OVER
Question 3 (7marks)
Working space
Matua MowersGeneral Ledger
GST Clearing
Date2017
Cross-reference Amount Date2017
Cross-reference Amount
1July Balance 650
Question 4 (3marks)
Explanation
2017ACCOUNTINGEXAMAB 10
Question 5 –continued
Question 5 (22marks)a. 2marks
Explanation
b. 14marks
Working space
11 2017ACCOUNTINGEXAMAB
Question 5 –continuedTURN OVER
CLU LipsticksGeneral Journal
Date 2017
Details General Ledger Subsidiary Ledger
Debit Credit Debit Credit
2017ACCOUNTINGEXAMAB 12
c. 6marks
Discussion
13 2017ACCOUNTINGEXAMAB
TURN OVER
Question 6 (9marks)
Working space
a. 4marksPuddles Pizza General Ledger
Disposal of Pizza Oven
Date2017
Cross-reference Amount Date2017
Cross-reference Amount
b. 3marks
Explanation
c. 2marks
Explanation
2017ACCOUNTINGEXAMAB 14
Question 7 –continued
Question 7 (12marks)a.i. 1mark
Working space
Net increase/decrease in cash position for the year ended 30 June 2017 $
ii. 1mark
Working space
Cash at Bank ledger balance at 30 June 2017 $
15 2017ACCOUNTINGEXAMAB
Question 7 –continuedTURN OVER
b. 6marks
Discussion
2017ACCOUNTINGEXAMAB 16
Question 8–continued
c. 4marks
Justification
Question 8 (15marks)a. 1mark
Working space
Discount Revenue for the six months ending 31 December 2018 $
b. 8marks
Working space
17 2017ACCOUNTINGEXAMAB
Question 8 –continuedTURN OVER
Tippy ToysBudgeted Income Statement for the six months ending 31 December 2018
$ $
Revenue
2017ACCOUNTINGEXAMAB 18
c. 4marksTippy Toys
Budgeted Balance Sheet (extract) as at 31 December 2018
$ $
Current Assets
d. 2marks
Explanation
END OF ANSWER BOOK