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ACCOUNTINGWritten examination
Tuesday 6 June 2017 Reading time: 10.00 am to 10.15 am (15 minutes) Writing time: 10.15 am to 12.15 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
2017ACCOUNTINGEXAMQB(NHT) 2
Question 1–continued
Question 1 (11marks)ThefollowinginformationrelatestoMaxiArts,asupplierofartmaterial,forJanuary2017.
Creditorbalancesat1January2017PixelPrinting $14000NDawson 10000ArtsPlus 16 000 $40 000
Journals for January 2017
Purchases Journal
Date2017
Creditor Invoice No.
Stock Control
GST Creditors Control
Jan. 517
GRobertsCanArts
8221437
105008400
1050840
115509240
$18900 $1890 $20790
General Journal (partially completed)
Date2017
Details General Ledger Subsidiary Ledger
Debit Credit Debit Credit
Jan.9
GRoberts 550
Returnedartfolios–CrN.34
Cash Payments Journal
Date 2017
Details Chq. No.
Bank Disc.Rev.
Creditors Control
Wages Sundries GST
Jan. 46
1115172330
OfficeequipmentNDawsonGRobertsWagesDrawingsCanArtsWages
201202203204205206207
77009 800
11 00041002700016 0004175
200 10 00011 000
16 000
4100
4175
7000
27000
700
$79775 $200 $37000 $8275 $34000 $700
3 2017ACCOUNTINGEXAMQB(NHT)
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a. CompletetheGeneralJournalentryon9January. 2marks
b. CompletetheCreditorsControlaccountat31January. Youarerequiredtobalancetheaccount. 4marks
c. PosttherequiredtransactionsintoGRoberts’saccountintheCreditorsSubsidiaryLedger. Youarenotrequiredtobalancetheaccount. 3marks
d. Describewhenthe‘Sundries’columnisusedintheCashPaymentsJournalandprovideanexample. 2marks
2017ACCOUNTINGEXAMQB(NHT) 4
Question 2 (5marks)LuxLampscommencedbusinesson1February2017.ThebusinesswilluseaGeneralJournalandspecialjournals,andalsosubsidiaryrecordsfordebtors,creditorsandstock.
On1February2017:• theownercontributed$15000cash• theowneralsocontributedequipmentthatcost$6000(plusGST),buthasanagreedvalueof$4000• amotorvehiclecosting$26000(plusGST)wasboughtoncreditfromMiltonMotors• stockcosting$10000(plusGST)waspurchasedoncreditfromWestImports.Stockwillbemarkedup
by125%• theownernegotiatedabankoverdraftwithWhoBankfor$45000.
PreparetheGeneralJournalentrywiththerelevantitemsrequiredtocommenceadoubleentrysystemon 1February2017.Anarrationisnotrequired.
5 2017ACCOUNTINGEXAMQB(NHT)
TURN OVER
Question 3 (10marks)LicoriceLikespaysitsemployeesmonthlyontheninthdayofeachmonthforworkuptoandincludingthatday.Thetotalwagesbillis$2500perday,basedonaseven-dayworkingweek.Thebusinessreportsonamonthlybasis.(Note:Thereare31daysinMarchand30daysinApril.)
a. PreparetheCashPaymentsJournalentryfor9April2017(Chq.No.411). 2marks
b. PreparetheadjustingandclosingentriesintheGeneralJournalfor30April2017. Narrationsarenotrequired. 4marks
c. Iftheadjustingentrywerenotrecorded,explaintheeffectforAprilonthe:• IncomeStatement• BalanceSheet. 4marks
2017ACCOUNTINGEXAMQB(NHT) 6
Question 4–continued
Question 4 (15marks)A2ImportshasprovidedthefollowingpartiallycompletedStockCardfortheTechtelevision.
Stock Card
Product: Tech television Cost Assignment Method: FIFO
Date2017
Details IN OUT BALANCE
Qty Cost Total Qty Cost Total Qty Cost Total
May 1 Balance 10 500 5000
5 Inv.234 10 550 5500 10 500
10 550 10500
Additional information 6May CreditsaleofeightTechtelevisionstoalocalschoolfor$800eachplusGST
(Invoice430)12May CreditpurchaseofsevenTechtelevisionsatacostof$475eachplusGSTand
customsdutyof$350plusGSTonthisinvoice(Invoice644)17May OwnerwithdrewoneTechtelevisionandoneAcetelevisionfromthebusiness
(Memo33)19May ProvidedthreeTechtelevisionstoalocalhospitalinexchangeforadvertising
intheirnewsletter(Memo34)24May CustomerreturnedonefaultyTechtelevisiontothebusiness(CreditNote56)
a. RecordtheadditionalinformationintheStockCardprovided. 5marks
b. Justifythecostpriceenteredfortheseventelevisionspurchasedon12May. 2marks
c. Aphysicalstocktakewasconductedon31Mayandtherewere15Techtelevisionsonhand(Memo35).
PreparetheGeneralJournalentryrequiredtorecordMemo35. Anarrationisrequired. 3marks
7 2017ACCOUNTINGEXAMQB(NHT)
TURN OVER
AnewmodeloftheTechtelevision,calledTech2,wasreleasedduringMay2017.Theownerprovidedthefollowinginformationabouttheexistingtelevisionsinstockon31May2017.
Model Estimated selling price Delivery to customers
Techtelevision $400 $40
d. CompletethetableprovidedtoshowtheeffectthatthereleaseofthenewTech2televisionwillhaveontheBalanceSheet. 2marks
e. Withreferencetoonequalitativecharacteristic,explainwhyitwouldbenecessaryfor A2ImportstorecordtheimpactofthereleaseofthenewTech2television. 3marks
2017 ACCOUNTING EXAM QB (NHT) 8
Question 5 (14 marks)Candy Enterprises sells chocolates and lollies. It reports on an annual basis on 30 June each year.On 1 June 2015, Candy Enterprises purchased three mobile phones for the use of the sales staff. Each mobile phone cost $900 (plus GST) and was bought on credit from DigPhones. The mobile phones were depreciated at 40% per annum using the reducing balance method. The business decided to dispose of the mobile phones on 30 June 2016 and received $400 cash for each phone.
a. Show how the following accounts would appear in the General Ledger after all details of the purchase and sale of the mobile phones have been posted:• MobilePhones• AccumulatedDepreciationofMobilePhones• DisposalofMobilePhones
You are not required to balance the accounts. 7 marks
The accountant told the owner that a loss on disposal of a non-current asset results from under-depreciation.
b. Justify the accountant’s statement. 3 marks
c. Describe the impact of loss on disposal on the accounting reports. 3 marks
d. State the journals that would be used to record the disposal of the mobile phones. 1 mark
9 2017ACCOUNTINGEXAMQB(NHT)
TURN OVER
Question 6 (14marks)XTTradershasbenchmarkeditselfagainstrecentlypublishedindustryaveragesandhasproducedthefollowingdatafor2016.
Key indicator XT Traders
Industry average
ReturnonOwner’sInvestment 15.4% 17.5%
ReturnonAssets 13.8% 11.6%
StockTurnover 88days 67days
DebtorsTurnover 57days 43days
CreditorsTurnover 28days 35days
WorkingCapitalRatio 2.7:1 1.9:1
QuickAssetRatio 1.4:1 1.2:1
DebtRatio 31% 51%
a. DiscusstheliquidityofXTTraders. 6marks
b. Explainthepurposeofabenchmarkandprovidetwobenchmarksthatthisbusinesscoulduse,otherthanindustryaverages. 4marks
c. Usingtheinformationabove,suggestwhyXTTraders’ReturnonOwner’sInvestmentislowerthantheindustryaveragewhiletheReturnonAssetsishigherthantheindustryaverage. 4marks
2017ACCOUNTINGEXAMQB(NHT) 10
Question 7–continued
Question 7 (22marks)HillsHardwareispreparingitsbudgetsforthethreemonthsending30September2017.Allsalesandpurchasesofstockareoncredit.Thebusinessprovidesthefollowinginformation.
Hills Hardware Assets, Liabilities and Owner’s Equity as at 30 June 2017
Debit Credit
AccruedWages 1 000
AccumulatedDepreciationofEquipment 27000
Bank 4000
Capital 112000
CreditorsControl 15000
DebtorsControl 25000
Equipment 89 000
GSTClearing 3000
PrepaidAdvertising 2000
StockControl 38000
Additional information for the three months ending 30 September 2017• Purchasesofstockoncreditwillbe$21000(plusGST).• ThebusinesswillpurchaseanewcomputersystemoncreditfromACTechnologiesfor
$4000(plusGST)on30August.Paymentisduewithinsixmonths.• Estimated Receipts ReceiptsfromDebtors $85000(nodiscountswillbeofferedforearlypayment) Capital $10000• Estimated Payments Advertising $7000(plusGST) Creditors $23000(includingdiscountrevenueof$500) Wages $24000 AccruedWages $1000 Rent $10000(plusGST) Drawings $9000 AustralianTaxationOffice
(ATO;GST) $3000
11 2017ACCOUNTINGEXAMQB(NHT)
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Budgeted Income Statement for the three months ending 30 September 2017Sales 102000LessCostofSales 40000Gross Profit 62000Plus Other RevenueDiscountRevenue 500 62500Less ExpensesWages 24000RentExpense 10000Advertising 8000DepreciationofEquipment 4000 46000Net Profit 16 500
a. PreparetheEstimatedCashFlowsfromOperatingActivitiessectionoftheBudgetedCashFlowStatementforthethreemonthsending30September2017. 7marks
b. ShowhowthefollowingaccountswouldappearintheGeneralLedgerat30September2017:• GSTClearingaccount• Capitalaccount
Youarenotrequiredtobalancetheaccounts. 8marks
c. PreparetheCurrentAssetsandtheCurrentLiabilitiessectionsoftheBudgetedBalanceSheetasat30September2017. 7marks
2017ACCOUNTINGEXAMQB(NHT) 12
Question 8 (9marks)XAFurniturebuysandsellsarangeofdesignerfurniture.Itoperatesonthefollowingcreditterms:• suppliers5/15,n/30• customers3/10,n/30
Theownerhasbeenprovidedwiththefollowinginformation.
Creditors Turnover
Debtors Turnover
Stock Turnover
80
70
60
50
40days
30
20
10
02015 2016 2017
year
Turnover ratios for creditors, debtors and stock
a. Usingtheinformationabove,explaintheimplicationsoftheseratiosforthebusiness’cashflow. 3marks
b. Explainthree strategiesthattheownercouldimplementinordertoimprovetheturnoverratiosandcashflow. 6marks
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
Tuesday 6 June 2017 Reading time: 10.00 am to 10.15 am (15 minutes) Writing time: 10.15 am to 12.15 pm (2 hours)
ANSWER BOOK
SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2017
STUDENT NUMBER
Letter
2017ACCOUNTINGEXAMAB(NHT) 2
ThIS pAGE IS BlANK
3 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
ThIS pAGE IS BlANK
2017ACCOUNTINGEXAMAB(NHT) 4
Question 1 –continued
Question 1 (11marks)a. 2marksMaxi ArtsGeneral Journal (partially completed)
Date2017
Details General ledger Subsidiary ledger
Debit Credit Debit Credit
Jan.9
GRoberts 550
Returnedartfolios–CrN.34
b. 4marksCreditors Control
Date2017
Cross-reference Amount Date 2017
Cross-reference Amount
Jan.1 Balance 40000
c. 3marksCreditor – G Roberts
Date2017
Cross-reference Amount Date 2017
Cross-reference Amount
5 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
d. 2marks
Description
Example
Question 2 (5marks)
Working space
lux lampsGeneral Journal
Date2017
Details General ledger Subsidiary ledger
Debit Credit Debit Credit
2017ACCOUNTINGEXAMAB(NHT) 6
Question 3–continued
Question 3 (10marks)
Working space
a. 2markslicorice likesCash payments Journal
Date2017
Details Chq.No.
Bank Disc. Rev.
Creditors Control
Wages StockControl
Sundries GST
b. 4marksGeneral Journal
Date2017
Details General ledger Subsidiary ledger
Debit Credit Debit Credit
7 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
c. 4marks
Income Statement
Balance Sheet
2017ACCOUNTINGEXAMAB(NHT) 8
Question 4 (15marks)
Working space
a. 5 marksStock Card
product: Tech television Cost Assignment Method: FIFO
Date2017
Details IN OUT BAlANCE
Qty Cost Total Qty Cost Total Qty Cost Total
May 1 Balance 10 500 5000
5 Inv.234 10 550 5500 10 500
10 550 10500
Question 4 –continued
9 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
b. 2marks
Justification
c. 3marksGeneral Journal
Date2017
Details General ledger Subsidiary ledger
Debit Credit Debit Credit
d. 2marks
Increase/Decrease/No effect Amount
Assets
liabilities
Owner’s Equity
e. 3marks
Qualitative characteristic
Explanation
2017ACCOUNTINGEXAMAB(NHT) 10
Question 5 –continued
Question 5 (14marks)a. 7marks
Working space
Candy EnterprisesGeneral ledger
Mobile phones
Date Cross-reference Amount Date Cross-reference Amount
Accumulated Depreciation of Mobile Phones
Date Cross-reference Amount Date Cross-reference Amount
Disposal of Mobile Phones
Date Cross-reference Amount Date Cross-reference Amount
11 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
b. 3marks
Justification
c. 3marks
Description
d. 1mark
Journals
2017ACCOUNTINGEXAMAB(NHT) 12
Question 6 –continued
Question 6 (14marks)a. 6marks
Discussion
13 2017ACCOUNTINGEXAMAB(NHT)
TURN OVER
b. 4marks
Explanation
c. 4marks
Suggestion
2017ACCOUNTINGEXAMAB(NHT) 14
Question 7–continued
Question 7 (22marks)a. 7marks
hills hardwareBudgeted Cash Flow Statement (extract) for the three months ending 30 September 2017
$ $
Estimated Cash Flows from Operating Activities
15 2017ACCOUNTINGEXAMAB(NHT)
Question 7–continuedTURN OVER
b. 8markshills hardwareGeneral ledger
GST Clearing
Date2017
Cross-reference Amount Date2017
Cross-reference Amount
Capital
Date2017
Cross-reference Amount Date2017
Cross-reference Amount
2017ACCOUNTINGEXAMAB(NHT) 16
c. 7marks
Working space
hills hardwareBudgeted Balance Sheet (extract) as at 30 September 2017
Current Assets $ Current liabilities $
17 2017ACCOUNTINGEXAMAB(NHT)
Question 8 –continuedTURN OVER
Question 8 (9marks)a. 3marks
Explanation
2017ACCOUNTINGEXAMAB(NHT) 18
b. 6marks
Explanation
END OF ANSWER BOOK