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LFS00AC1 Foundation Studies Test 4

Course: Foundation Studies
Subject Code: LFS00AC1
Subject Name: Accounting 1
Assessment: Test 4 - Trimester 2_2020                                                
Percentage: 20% of final mark
Due:

 

3pm AEST

Wednesday 9th September 2020

Week 11

Name:
ID Number:
General information and requirements:  

·         This is an individual assessment and must be completed by you.

·         You must complete the test on this Word document and submit it as a Word document in the link on Moodle. The link is just below where you downloaded this test paper.

·         In submitting this test electronically, you are agreeing to the policy relating to academic integrity at LTCA.

·         All students have access to download Microsoft Office for free. This information was provided during the orientation.

·         You have 4 hours in which to complete and submit the test. Do not wait until the last minute to submit your test paper.

·         Please enter your name and ID number in the space provided above.

Question Possible marks
1 30
2 28
3 17
Total 75

Question 1                                                                                                                                          (30 marks)

Simply Scrumptious sells speciality boxes of chocolates. The chocolates sell for $44 (incl. GST). They have provided you with the following information:

At 1 July 2020 stock records for the chocolate baskets revealed:

 

Chocolate baskets

Quantity Cost $
12 20
10 21

The following transactions occurred during the month:

Date

July

Transaction Document
2 Sold 8 baskets for $44 each (incl. GST) Rec 222
5 Purchased 15 baskets for $22 each plus GST $2.20 Inv 65
12 Sold 10 baskets for $44 each (incl. GST) Rec 223
18 Sold 8 baskets Rec 224
25 Purchased 20 baskets for $21 each plus GST $2.10 Inv 82
28 Returned 5 faulty baskets to supplier Credit note 5

A stocktake was completed at 31 July which showed 21 baskets on hand.

Required

  1. Complete the stockcard for July
  2. What will the stock adjustment be at 31 July in the Income Statement?
  3. What will the value of inventory be in the Balance Sheet as at 31 July?

Question 2                                                                                                                                          (28 marks)

Sally’s Boutique has provided you with the following extract of their accounting information at 30 June 2020:

$
Cash at Bank 12,000
Accounts Receivable 3,900
Inventory 8,900
Equipment 18,000
Accumulated Depreciation— Equipment 400
Accounts Payable 3,000
Loan - CBA (due 2025) 8,000
Capital 86,000
Drawings 155,000
Cash sales 139,200
Credit sales 162,800
Sales returns 13,000
Wages Expense 52,600
Electricity Expense 5,100
Rent Expense 21,100
Cartage inwards 400
Depreciation Expense 200
Cost of sales 50,500
Cartage outwards 700
Buying expenses 550

Additional information – the stocktake at 30 June revealed $9,800 worth of stock.

Required

  1. Complete the Income Statement for Sally’s Boutique for the year ended 30 June 2020
  2. Complete the Owner’s Equity extract of the Balance Sheet as at 30 June 2020

Note - You must include headings and all relevant sub-total and totals in your reports.

Question 3                                                                                                                                          (17 marks)

Eddy’s Electrical Repairs purchased new equipment at a cost of $75,000 for the business on 1 May 2019. He expects that it will have a life of 5 years at which time he will be able to sell it for $15,000.

Required

  1. Calculate the annual depreciation expense
  2. Calculate the annual depreciation rate
  3. Calculate the depreciation expense to year end 30 June 2019
  4. Complete the Balance Sheet extract for year end 30 June 2019
  5. Complete the Balance Sheet extract for year end 30 June 2020

Note – you must show full workings to gain full marks and formula where relevant.

Expert's Answer

  1. b) What will the stock adjustment be at 31 July in the Income Statement?

The cost of goods sold for 5 items (26-21) will be adjusted for at $20.68/unit rate

 

Debit    Cost of Goods Sold                                   103.4

Credit                  Inventory                                                     103.4    

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