a. Prepare an Income Statement for Sandox Retail for the financial year 2019-2020. (2.5 marks)
b. Prepare a Balance Sheet as of 30 June (2.5 marks)
c. Prepare the closing journals for Sandox (2 marks)
(Note this question is from the Week 6 Tutorial)
Beacon Limited had the following trial balance as at 1 January 2019, as shown in the table below:
|
Account
|
Debit $
|
Credit $
|
|
Cash
|
250 000
|
|
|
Accounts receivable
|
600 000
|
|
|
Inventory
|
730 000
|
|
|
Prepaid insurance
|
60 000
|
|
|
Prepaid rent
|
50 000
|
|
|
Equipment
|
1 500 000
|
|
|
Allowance for doubtful debts
|
|
20 000
|
|
Accumulated depreciation
|
|
500 000
|
|
Accounts payable
|
|
700 000
|
|
Revenue received in advance
|
|
120 000
|
|
Income tax payable
|
|
530 000
|
|
Loan
|
|
600 000
|
|
Share capital
|
|
400 000
|
|
Retained profits
|
|
320 000
|
|
|
3 190 000
|
3 190 000
|
You are given the following additional information for the year ended 31 December 2019:
a) Bad debts of $14,380 were written off.
b) It was decided that allowance for doubtful debts should be 5 per cent of accounts receivable.
Required:
1) Prepare journal entries for these transactions. (5 marks)
2) State the balance of the following accounts via T-ledger for the year ended 31 December 2019:
a) Accounts receivable (1 mark)
b) Allowance for doubtful debts (1 mark)
Question 3 (11 marks)
(Note this question is from the Week 7 Tutorial)
The following information has been extracted from the records of Kakadu Ltd, which sells special camping tents. The company uses the perpetual inventory system to record stock. Its monthly reporting date is 31 May. Kakadu Ltd uses the FIFO Method.
|
Date
|
Transaction
|
Quantity
|
$ Unit cost
|
|
1/05
|
Beginning balance
|
6
|
720
|
|
6/05
|
Purchases (850/unit)
|
4
|
600
|
|
16/05
|
Sold @1700/unit
|
8
|
?
|
|
17/05
|
Purchases
|
6
|
650
|
|
29/05
|
Sold @ 1500/unit
|
2
|
?
|
|
30/05
|
Sales Return from 29/03 Sales
|
1
|
?
|
Required:
a) Ignoring GST and narrations, create and complete the inventory stock record shown above for transactions during the month of May.
b) Calculate the cost of inventory on hand as at 31 May and the cost of sales as at 31 May.
Question 4 (7 marks)
(Note this question is from the Week 8 Tutorial)
Transactions and balances for Diana Wonder are provided below:
- 31 Jul 2020 Bank Statement balance $ 78,495
- 31 Jul 2020 balance per Diana’s records $ 77,370
- Diana received a cash payment that she has not deposited $ 380
- Diana issued a cheque payable to Michael Hill Enterprises that has not been presented to the bank $ 1,499
- Bank charges for the month of July were $10
- Interest on bank balance credited to Diana’s account $ 16
Required:
Perform a bank reconciliation.
a) Reconcile Diana Wonder’s month end cash balance as of 31 Jul 2020. (5 marks)
b) Based on your analysis, propose the adjusting entries (if any). (2 marks)
Question 5 (7 marks)
(Note this question is from the Week 9 Tutorial)
Greyhound Ltd purchased a new bus for $280,000. The company expects the bus to be used for trips between Sydney and Melbourne for 8 years, or 400,000 miles, with an estimated residual value of $40,000 at the end of that time. During the third (3rd) year, the bus was driven 60,000 miles.
Required:
Calculate the depreciation expense for the 3rd year using each of the depreciation methods: a), b) and c) stated below. (Show ALL of your workings and calculations)
a) Straight-line (2 marks)
b) Diminishing balance at 20% p.a. (2.5 marks)
c) Units-of-activity (2.5 marks)
Question 6 (11 marks)
(Note this question is based on the Week 11 and Week 12 Tutorials)
Safeway Inc. had the following comparative current assets and current liabilities, as shown below:
Current Assets
31 Dec 2019 31 Dec 2018
|
Cash
|
$ 65,000
|
$ 25,000
|
|
Marketable securities
|
30,000
|
15,000
|
|
Accounts receivable
|
42,000
|
80,000
|
|
Inventory
|
120,000
|
90,000
|
|
Prepaid expenses
|
35,000
|
20,000
|
|
Total Current Assets
|
$292,000
|
$230,000
|
Current Liabilities
|
Accounts payable
|
$145,000
|
$130,000
|
|
Salaries payable
|
40,000
|
30,000
|
|
Income tax payable
|
20,000
|
15,000
|
|
Total Current liabilities
|
$205,000
|
$175,000
|
Additional Information
During 2019 net credit sales were $680,000 and the associated cost of goods sold was $365,000. Net cash provided by operating activities for 2019 was $142,000.
Question 6 (Cont’d) (11 marks)
Required:
Based on the comparative current assets and current liabilities of Safeway Inc., as shown above, compute the following ratios:
- Current ratio for both 2018 and (2 marks)
- Quick ratio for both 2018 and (3 marks)
- Current cash debt coverage ratio for (2 marks)
- Receivables turnover for (2 marks)
- Inventory turnover for (2 marks)
