BU1002/ BU1902 ACCOUNTING FOR DECISION MAKING FormalExams SP53, 2021
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BU1002/ BU1902 ACCOUNTING FOR DECISION MAKING
Formal Exams SP53, 2021
Final Examination for JCUS student only
Question 1 (10 marks)
The following information contained the financial accounts of Apcon Consultancy Firm for the accounting year ended 31st December 2021:
|
Account description |
Amount $ |
|
Consultancy fee earned |
3,500,000 |
|
Rental fee earned |
80,000 |
|
Rental of premise |
300,000 |
|
Staff salaries |
650,000 |
|
Air conditioner servicing fee |
44,000 |
|
Cash at bank |
40,000 |
|
Accounts payable |
40,000 |
|
Administrative expenses |
70,000 |
|
IT equipment |
500,000 |
|
Loss on disposal of assets |
1 1500 |
|
Accrued expenses |
30,000 |
|
Prepaid expenses |
28,500 |
|
Rent deposit paid |
40,000 |
|
Accumulated depreciation of IT equipment |
90,000 |
|
Inventory |
27,500 |
|
Owner’s equity |
? |
|
Unearned consultancy fees |
60,000 |
|
Fees overdue from clients |
55,000 |
|
Bank loan |
400,000 |
|
Freehold property |
600,000 |
Required:
a) Prepare a fully classified Balance Sheet for Apcon Consultancy Firm for the year ending 31st December 2021 . Use the accounting equation to determine the value of Equity at the end of the year. (6 marks)
b) Discuss and elaborate how ‘Freehold Property’ meets the definition and recognition criteria according to the Conceptual Framework to allow it to be recorded in the Balance Sheet. (4 marks)
(6 + 4 = 10 marks)
QUESTION 2 (10 Marks):
These following financial statement balances are for Dophine Plumber Services for the end of the financial year, 31 December 2021:
|
Account description |
Amount $ |
|
Accounts payable |
11,000 |
|
Accounts Receivable |
9,800 |
|
Accumulated Depreciation Building |
14,000 |
|
Advertising incurred |
1,200 |
|
Advertising Payable |
1,200 |
|
Bank Loan |
110,000 |
|
Building |
140,000 |
|
Capital |
163,000 |
|
Cash |
25,000 |
|
Depreciation |
17,000 |
|
Drawings |
10,200 |
|
Fee Revenue |
200,000 |
|
Inventory |
20,000 |
|
Land |
120,000 |
|
Motor Vehicle Expenses |
25,000 |
|
Other Expenses |
38,000 |
|
Rent Revenue |
60,000 |
|
Rent Revenue Received in Advance |
2,000 |
|
Salaries Expense |
55,000 |
|
Supplies used |
33,000 |
Required:
a) Prepare a Statement of Profit or Loss for Dophine Plumber Services at 31 December 2021 . (5 marks)
b) By referering to specific items within Dophine Plumber Services’s statement of profit or loss, name several key stakeholders and discuss how these stakeholders could use the statement to assist in their decision making (5 marks)
(5 + 5 = 10 marks)
Question 3 (10 marks)
The following are transactions of Extraordinary Pea Pte Ltd for year ending 30 June 2021:
|
Description |
$ |
|
Proceeds received from Bank loan |
70,000 |
|
Proceeds of share issue |
120,000 |
|
Payment for purchase of motor vehicle |
100,000 |
|
Depreciation expense |
32,000 |
|
Dividends paid |
20,000 |
|
Sales revenue |
810,500 |
|
Loss on sale of equipment |
15,000 |
|
Proceeds from sale of equipment |
50,000 |
|
Commission received in cash |
13,050 |
|
Dividends received from investment |
14,500 |
|
Employee salaries paid |
365,000 |
|
Depreciation expense |
43,600 |
|
Cash paid to suppliers |
301,010 |
|
Cash collected from customers |
810,500 |
|
Opening cash balance, 1 July 2020 |
80,800 |
Required:
a) Prepare the Statement of Cashflow for the end of the financial year, 30 June 2021 for Extraordinary Pea Pte Ltd . (5 marks)
b) Discuss and explain how the Statement of Cash Flow prepared is beneficial to Extraordinary Pea Pte Ltd’s business sustainability? (5 marks)
(5 + 5 = 10 marks)
Question 4 (10 marks)
Glenn Tan, manager of Hercules Car Repairers, has requested that you prepare a cash budget for the months of December and January. He has provided the following information to assist in this task.
• Projected cash balance at the end ofNovember is $60 000.
• Actual revenue for October and November and projected revenue for December and January are as follows:
|
|
October |
November |
December |
January |
|
Cash sales ($) |
63,000 |
61,000 |
72,000 |
60,000 |
|
Sales on credit ($) |
90,000 |
110,000 |
130,000 |
80,000 |
|
Total Sales |
153,000 |
171,000 |
202,000 |
140,000 |
• Analysis of past records has shown that credit sales are collected over a three -month period, with 50 per cent being collected in the month of the sale, 40 per cent in the next month and the remainder in the following month .
• Projected expenditure during December and January is as follows:
– Selling and administrative expenses are budgeted to be $88 000 each month .
– A new car hoist will be purchased for $100 000, with a $20 000 cash payment in December and the balance to be paid in March .
– Glenn wants to maintain a minimum cash balance of $60 000.
– As more customers will want their vehicles serviced prior to Christmas, the consumables store will need more supplies. Accordingly, an order has been placed for $60 000 of inventory. This will arrive in late November and be paid in December.
Required:
a. Prepare a cash budget for December and January . (6 marks)
b . Prepare a report for Glenn outlining his cash position over the Christmas period. Give advice regarding any financing requirements or investment opportunities. (4marks)
(6 + 4 = 10 marks)
2023-02-03