HI5001 MID TERM
ACCOUNTING FOR BUSINESS DECISIONS
FINAL ASSESSMENT
TRIMESTER 2, 2022
TIME ALLOWED: 24 hours
Assessment Weight: 50 total marks
Instructions:
• All questions must be answered by using the answer boxes provided in this paper.
• Completed answers must be submitted to Blackboard by the published due date and time.
Please ensure you follow the submission instructions at the end of this paper.
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit.
Question 1 (11 marks)
Paul Consulting is trying to prepare its bank reconciliation statement. For this purpose, the following data is available:
1. The balances as per two books as at 30 September 2022 are as follows:
Bank Statement Balance $28 507 (Credit)
Cash at Bank Account Balance $27 271 (Debit)
2. The receipts of $1 092 have not been deposited.
3. The given data reveals that the cheques of $2 081 were issued but not presented.
4. A deposit from another customer for $450 was incorrectly credited into the bank account of Paul Consulting.
5. A cheque for the amount of $188 was returned marked “dishonoured”.
6. Bank charges of $15 appeared in the bank statement.
Required: Prepare a bank reconciliation for Paul Consulting at 30 September 2022.
ANSWER: ** Answer box will enlarge as you type
Question 2 (11 marks)
The following information relates to the business of David & Sons Company. The financial year of the company ends at 30 June 2022.
Opening balance of Account Receivables $22 200
Opening balance of the Allowances for Doubtful Debts 2 820
Closing Balance of Account Receivables 28 860
Net credit sales during the year 78 000
During the year, $2 160 of account receivables were written off as bad debts. David & Sons Company uses the net credit sales method to estimate doubtful debts. It is estimated that three per cent of the net credit sales will become uncollectable. Ignore GST.
Required:
a) Prepare the following accounts (T-account) at the end of 2022 (7 marks)
a. Account Receivables
b. Allowances for Doubtful Debts
ANSWER a):
b) Show how the above information appears in the Income Statement and the Balance Sheet of the company at the end of the financial year (4 marks)
ANSWER b):
Question 3 (9 marks)
CCL Company uses a periodic inventory system to manage their inventory. The opening inventory purchases and closing inventory of CLL Company are given in Table 2 below.
Table 2. Purchases and Inventories of CLL Company
Date Detail Units Cost per unit
1 September 2022 Inventory 4,000 $9
3 September 2022 Purchase 3,500 $10
15 September 2022 Purchase 6,000 $10
20 September 2022 Purchase 7,500 $11
30 September 2022 Inventory 9,000
Required:
Based on the above data, calculate each of the following:
a) Cost of Sales under the cost flow assumption of FIFO (3 marks)
ANSWER a):
b) Cost of Closing Inventory under the cost flow assumption of FIFO (2 marks)
ANSWER b):
c) Cost of Sales under the cost flow assumption of Weighted Average (2 marks)
ANSWER c):
d) Cost of Closing Inventory under the cost flow assumption of Weighted Average (2 marks)
ANSWER d):
Question 4 (7 marks)
The table below presents the data related to the purchase of a machine by Burleigh Waters Limited.
Table 3. Purchase of Machine by Burleigh Waters Limited
$
The invoice price of the machine 285 714
Freight cost 4 857
Installation charges 6 571
cost of transit insurance 3 714
Testing of machinery before use 1 429
Note. This machine was purchased on 1 July 2011. The year ends on 30 June.
The company decided to use the straight-line method of depreciation since it is expected that the pattern of economic benefits flow towards the entity remains constant during this machine’s useful life of ten years. Further, it is expected that the residual value of this machine will be This machine was purchased on July 1, 2011. The year comes to an end on June 30th.
The company chose the straight-line method of depreciation because it is expected that the pattern of economic benefits flowing to the entity will remain constant over the ten-year useful life of this machine. Furthermore, the residual value of this machine is expected to be
$2 857. Ignore GST.
Required:
a) What is the accounting treatment of the cost of transit insurance? Determine the cost of the machine (3 marks)
ANSWER a):
b) Calculate annual depreciation (2 marks)
ANSWER b):
c) Calculate the balance of accumulated depreciation at the end of the seventh year.
(2 marks)
ANSWER c):
Question 5 (7 marks)
The table below presents the current year’s selected accounts from ZZZ Limited at 30 June 2022.
Table 1. Selected Accounts from ZZZ Limited
Debit Credit
Office Equipment 24 000
Supplies 2 200
Prepaid Insurance 4 800
Salaries Expense 119 200
Rental Fees Revenue 52 800
Unearned Rental Fees 16 800
Note. This table is prepared before any adjusting entries are made.
The additional information is given below:
i. The Office supplies of $800 were available for use on 30 June 2022 (1 Mark)
ii. ZZZ Limited collected four months’ rent in advance from several tenants on 1 June 2022.
(1 Mark)
iii. The accrued salaries of $14 000 were not recorded as at 30 June 2022. 1 Mark].
iv. The above-mentioned prepaid insurance represents the premium paid on 1 June 2022 for one year. (2 Marks)
v. The office equipment was purchased on 1 April, and it is expected that this office equipment will last for five years. (2 Marks)
Required: Record necessary adjusting entries in the general journal on 30 June 2022.
ANSWER:
Question 6 (5 marks)
Several processes are involved in the fulfilment (order to cash) process. You have performed these processes in the SAP ERP Assessment 2. Briefly explain these processes. Is there any theoretical linkage between the fulfilment process and the procurement process? Finally, what challenges did you face in completing SAP ERP Assessment 2?
Maximum words: 300
ANSWER:
END OF FINAL ASSESSMENT
Submission instructions:
Before you submit your assessment, please check all of the following:
• You have named your file with your Student Number and Unit Code e.g. MTR1245 HI5001
It is critical you follow this file name instruction to ensure the file belongs to you.
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Once you have checked the above:
Upload your file to the appropriate link on Blackboard.
You have two attempts to submit your assessment with only the final submission being marked.
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