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Final and Deferred exams

THREE REVISION QUESTIONS


+
structure of these exam papers

Unit Name:

Accounting Information for Managers

Unit Number:

200101

Disclaimer: The purpose of these three revision questions is to assist


students in their preparation for the final and deferred examinations. It is to
assist students with the style of question that may be asked in these exams.
Remember the final and deferred exams consist of 4 questions covering the
chapters/topics below. It is of 2 hours duration and thus you have
approximately 30 minutes per question. It is recommended you read the
entire paper first and then answer the questions you find easiest first so you
pick up time and confidence for the later questions that you find hardest.
The three revision questions in this document cover the Balance Sheet
(Chapter 5), Income Statement (Chapter 6) and Statement of Cash Flows
(Chapter 7). You need to go back through these chapters/topics in detail, as
well as, the relevant weekly tutorial work you covered in the weeks Lessons
you learned these chapters/topics.
Your revision of 'Analysis & interpretation of financial statements' (Chapter 8)
and 'Cost-volume-profit (CVP) analysis' (Chapter 10) was covered in,
respectively Week 12 and Week 14 tutorial classes. These two
chapters/topics cover the 4th question. Please refer to the relevant online
homework + tutors unseen and students unseen questions and answers for
those weeks. I have left open on vUWS, under the Tutorials file, the
solutions to the Week 12 (second part of Chapter 8 ratios) and Chapter 14
(CVP analysis) as these will help you prepare for the exams.
This document is to be read in conjunction with the Conceptual design of the
final and deferred exam papers and exam preparation document, located in
the Exams folder in vUWS.
The suggested solutions to these three revision questions will go up on
vUWS at 10pm Thursday 29 October.

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On vUWS under the Staff Consultation Times folder, from 10am Friday 23
October, will be a list of the academic staff who are available during STUVAC
week (Week 15 w/c Monday 26 October) to assist students in their learning
for the final exam. It states the dates, times and location staff are available.
Staff will not do the problems for you. They are there to check the work you
have attempted and guide you in your understanding and learning.

If a student attends and has not made an honest attempt at the question, then
staff will place the student in a room where the student will have to attempt
the question then and there. Remember we will not be there at the final exam
to do the answer for you. You have to do it for yourself. Staff are available to
assist student's in their learning.

Remember if you wish to go through your attempt at these questions or any


other questions, staff are available to go through them with you.

200101 Three Revision Questions re. final and deferred exams

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Question 1

Income Statement

Part A - Part A is NOT related to part B

Michelles Mud Cakes commenced operations on 1 January 2012. Using the


information below, you are required to prepare an accrual-based income
statement for January.
Transactions for the month were as follows:
1

Invested $100 000 in new equipment into the business and $20 000 cash.

Purchased $35 000 worth of inventory.

Made sales of $25 000. The goods had cost $10 000.

Customer paid for Jan 3 goods.

11

Wages expense paid $600.

16

Sales of $45 000 with a cost of $22 000.

19

Received electricity bill for month $310.

21

Paid insurance for the year $1 800.

22

Paid loan $2 500.

23

Received telephone bill for $200.

30

Received interest $800.

31

Rent for January $550

Additional information:

The business uses the straight-line method of depreciation and


recognises depreciation expense at the end of each month.

The new equipment invested in the business on January 1 has a


salvage value of $30 000 and a useful life of 7 years.

$300 of wages owed to staff, but unpaid at the end of January.

The business is not a reporting entity and the owner would like all
relevant items to be listed on the income statement.

Write your answer in the template on page 4 below.

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Answer for Question 1 Part A:

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PART B
Part B is NOT related to Part A
Calculating retained earnings

You have been given the following data for Gleeson Pty Ltd:
Retained Earnings as at December 31, 2010
$420 000
Share Capital as at December 31, 2011
100 000
Cost of equipment purchased during 2011
129 000
Net loss for the year ended December 31, 2011
43 000
Dividends declared and paid in 2011
55 000
Decrease in cash balance from Jan 1, 2011 to Dec. 31, 2011
12 000
Decrease in long-term debt in 2011
67 000
Required:
Prepare the retained earnings portion of a statement of change in owners'
equity for Gleeson Pty Ltd for the year ended December 31, 2011:

200101 Three Revision Questions re. final and deferred exams

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Question 2

Balance Sheet

The following is a list of account balances for Sterling Industries prepared


after balance day adjustments have been made.

REQUIRED:
Prepare a classified balance sheet as at 30 June 2012 using the
template on page 6 below.

Mortgage (due 30 June 2015)


Accounts Payable
Accounts Receivable
Accrued Wages
Accumulated Depreciation Motor Vehicles
Allowance for Doubtful Debts
Accumulated Depreciation Furniture and Equipment
Capital
Drawings
Bank Overdraft
Furniture and Equipment
GST Collected
GST Paid
Interest Income Accrued
Inventory
Land and Buildings
Loan to employee (due to be repaid July 2012)
Motor Vehicles
Prepaid Insurance
Profit & Loss (Loss for the year)

200101 Three Revision Questions re. final and deferred exams

$
300,000
33,560
68,440
3,500
86,000
12,800
58,000
700,340
76,000
25,340
134,000
20,900
4,000
2,400
37,400
680,000
6,000
206,000
1,000
25,200

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________________________________________________________
________________________________________________________
________________________________________________________
$

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Question 3

Statement of Cash Flows

The following information was provided by the accounts of Sharons


Cookies Pty Ltd for the month of July, 2012:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.

Dividends of $120 000 were paid.


Receipts of $490 000 were received from customers.
Depreciation of $19 000 was recorded in the books for the period.
Accounts of $96 000 were paid to trade creditors.
Wages of $24 000 were paid.
$40 000 was paid for the long-term debenture notes payable.
Income tax of $26 000 was paid.
A vehicle was traded for a piece of equipment at cost $10 000
Interest of $12 900 was received
A large machine worth $80 000 on the books was sold during the year.
The company made a $10 000 profit as the proceeds were $90 000.
Two new computers were purchased for $6 000.
Interest of $ 4 800 was paid.
The cash at bank balance on 30 June, 2012 was $80 000.
Provision for doubtful debts has been determined as $10,000.

Required:
Use the information above to prepare a properly classified cash flow
statement for the company for the month of July, 2012.
Use brackets (

) to indicate cash outflows.

Write your answer in the template on page 9 below.

(Use this blank space for working out not marked)

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Answer for Question 3:

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