ACCA财务会计考题2012年度

THE UNIVERSITY OF NEW SOUTH WALES

SCHOOL OF ACCOUNTING

FINAL EXAMINATION, JUNE 2011

ACCT 5930 FINANCIAL ACCOUNTING

Time Allowed: 2 Hours

Reading Time: 10 minutes This examination paper has 9 pages Total Number of Questions: 4 Total Marks Available: 100

Answer ALL questions The questions are NOT of equal value All answers are to be written in the examination booklet provided Candidates are to supply their own calculators

All answers must be written in ink. Except where they are expressly required, pencils may be used only for drawing, sketching or graphical work. This paper may be retained by the candidate

1

Please see over

This page is intentionally blank

2

Please see over

Question 1 Inventory (20 marks)

Part a (13 marks) The following information about the purchases and sales made by Rater Pty Ltd in the month of January 2011 is available. Rater Pty Ltd uses perpetual inventory control and first-in first-out (FIFO). Date Details Units Unit Cost Total Cost 1/1/11 Opening Inventory 250 $15 $3,750 8/1/11 Purchases 300 $16 $4,800 13/1/11 Sales 300 19/1/11 Purchases 200 $17 $3,400 22/1/11 Sales 300 26/1/11 Purchases 150 $19 $2,850 30/1/11 Purchases 100 $20 $2,000

Required:

Marks 5 i. Prepare the journal entry (or entries) necessary to record the sale (on

credit at $22 per unit) on 22 January 2011.

5

ii. A stocktake revealed that inventory on hand as at 31 January 2011

was 370 units. Calculate the ending inventory as at 31 January 2011.

3

iii. By how much would net profit for the month ended 31 January 2011

change if Rater Pty Ltd were to use the periodic inventory system and FIFO?

Part b (7 marks) Alkin Pty Ltd uses the periodic inventory system and weighted average cost to account for its inventory of shirts. The cost of inventory as at 1 July 2009 (400 shirts) was $2,000. Throughout the year, the following purchases were made.

15 August 2009 19 December 2009 15 February 2010 28 May 2010 500 shirts 1,000 shirts 600 shirts 700 shirts Total cost: $2,500 Total cost: $5,600 Total cost: $3,600 Total cost: $4,2

A stocktake revealed that inventory on hand as at 30 June 2010 was 600 shirts.

Required:

Marks 3 i. Calculate the cost of ending inventory as at 30 June 2010.

4

ii. Prepare closing entries relating to inventory for the year ended 30

June 2010.

3

Please see over

Question 2 Property Plant and Equipment (20 marks)

Part a (3 marks) On 14 March 2011, Faltmore Limited purchased a motor vehicle with an invoice price of $35,000. A trade in allowance of $10,000 was given on the company’s old vehicle and the balance of $25,000 was paid in cash. Delivery charges (not included in the invoice price) amounted to $1,000. Insurance charges on the motor vehicle covering the period 14 March 2011 to 13 March 2012 were paid on the date of the purchase and amounted to $1,500.

Required:

Calculate the amount at which the motor vehicle will initially be recorded in the Balance Sheet of Faltmore Limited.

Part b (5 marks) On 1 July 2008, Gerty Limited purchased equipment for use in its business. The cost of the equipment was $625,000. The equipment is estimated to have a useful life of 4 years and a residual value of $81,000. The reducing balance method of calculating depreciation is used.

Required:

Prepare the journal entry or entries necessary to record depreciation expense for the year ended 30 June 2010.

Part c (3 marks) Alanton Limited owns a motor vehicle with an original cost of $30,000 and accumulated depreciation as at 30 June 2010 of $7,500. The motor vehicle was estimated to have a useful life of 5 years and a residual value of $5,000. The straight line method of depreciation is used. These assumptions have not changed since the motor vehicle was purchased.

Required:

Determine when Alanton Limited first began to use the motor vehicle.

4

Please see over

Question 2 (cont.)

Part d (5 marks) Critically evaluate the following statement made by an individual reviewing the financial statements of a company in which they own shares.

“Factory machinery is shown in the Balance Sheet at a carrying amount of $1,500,000. This must mean that if the company were to sell the machinery, they would realise approximately $1,500,000 from the sale”

(guide 80-120 words)

Part e (4 marks) With regard to the revaluation model of measuring items of Property Plant and Equipment, explain how revaluation increments and revaluation decrements impact on the income statement at the time of the revaluation. (guide 50-100 words)

5

Please see over

Question 3 Investments, Liabilities, and Equity (20 marks)

Part a (7 marks) On 1 July 2009, Coronthport Limited acquired 40% of the issued capital of Datome Limited for a cash consideration of $2,000,000. During the year ended 30 June 2010, Datome Limited reported a net profit after tax of $375,000 and paid a cash dividend of $100,000.

Required:

Marks 3 i. Calculate the income recognised in the Income Statement from the

investment in Datome Limited for the year ended 30 June 2010 and the carrying amount of the investment in the Balance Sheet as at 30 June 2010 using the cost method.

4

ii. Calculate the income recognised in the Income Statement from the

investment in Datome Limited for the year ended 30 June 2010 and the carrying amount of the investment in the Balance Sheet as at 30 June 2010 using the equity method.

Part b (5 marks) Mirine Limited sells one product that is sold with a 6 month warranty. Mirine Limited has been selling this product for over 10 years. Past experience reveals that 5% of all sales require warranty rectification with an average cost of $75 per product repaired. During the year ended 30 June 2010, Mirine Limited sold 20,000 products and 900 products were returned for warranty repairs at a total cost (all paid in cash) of $63,000.

The accountant made the following entries to record the above events for the year ended 30 June 2010.

Dr Warranty Expense 63,000 Cr Cash 63,000 Dr Warranty Expense 4,500 Cr Warranty Provision 4,500

Required:

Prepare the journal entry or entries necessary to correct the error made by the accountant in recording these events.

6

Please see over

Question 3 (cont.)

Part c (8 marks) As at 1 January 2010, Teniman Limited had 200,000 ordinary shares outstanding. On 1 July 2010, Teniman Limited issued a further 100,000 ordinary shares. There are no preference shares. On 1 January 2010, Teniman Limited issued $4,000,000 of 10% convertible debt. This debt is convertible into 1 ordinary share for every $40 of debt outstanding. During the year ended 31 December 2010, Teniman Limited made a net profit after tax of $1,100,000. The tax rate is 30%.

Required:

Marks 3 i.

5 ii.

In accordance with AASB133 (Earnings per Share), calculate Basic Earnings per Share for the year ended 31 December 2010.

In accordance with AASB133 (Earnings per Share), calculate Diluted Earnings per Share for the year ended 31 December 2010.

7

Please see over

Question 4 Cash Flow Statements (40 marks)

The financial statements of Taber Limited are presented below;

Taber Limited

Balance Sheets as at 31 December

('000s)

2009 2010

Current Assets

Cash 370Accounts Receivable Allowance for Doubtful Debts Inventory 490Prepaid Insurance 1,425

Non-Current Assets

Land 1,700Buildings 1,100Accumulated Depreciation – Buildings Plant and Equipment Accumulated Depreciation – Plant & Equip Motor Vehicles Accumulated Depreciation – Motor Vehicles 2,780

Total Assets

Current Liabilities

Accounts Payable Interest Payable Income Tax Payable 935

Non-Current Liabilities

Bank Loan

Total Liabilities

NET ASSETS $2,370

Shareholders’ Equity Share Capital Revaluation Surplus General Reserve Retained Earnings

TOTAL SHAREHOLDERS' EQUITY $2,370

8

605 80

60080

4,205

57060 305

900

1,835

1,600200 570

515 365 (140) 345 60 1,145

2,385

1,100 (490) 735 (310) 80 (55) 3,445

4,590

525 45 340 910

300 1,210

$3,380 2,065 235 250 830

$3,380Please see over

(120)

(400) (250) (50)

-

Question 4 (cont.)

Tabor Limited

Income Statement for the Year Ended 31 December 2010

('000s)

Sales 7,100 Less: Cost of Goods Sold 4,800 Gross Profit 2,300 Proceeds from Sale of Motor Vehicle 10 2,310 Less Expenses: Bad Debts Expense 80 Carrying Amount of Motor Vehicle Sold 15 Depreciation Expense – Buildings 90 Depreciation Expense – Plant and Equip 60 Depreciation Expense – Motor Vehicles 35 Discount Allowed 40 Inventory Shortage Expense 35 Interest Expense 85 Other Expenses 870 Total Expenses 1,310 Profit Before Income Tax 1,000 Less: Income Tax Expense 340 Operating Profit After Income Tax 660

Additional Information

 Land was the only asset revalued during the year.

 During the year, a share dividend of $165,000 was paid out of the Revaluation Surplus.

Required:

Marks 30 i. Prepare a Statement of Cash Flows (using the direct method) for Tabor Limited for the year ended 31 December 2010 in accordance with AASB107.

10

ii. Prepare a note reconciling the Operating Profit after Income Tax with

Net Cash Flow from Operating Activities.

END OF EXAMINATION PAPER

9