My home / My units / ACCG1000_SHFYR_2020_ALL_U / Exam Period Assessments Session 2 2020 / Practice Exam
Started on Sunday, 1 November 2020, 7:16 PM
State Finished
Completed on Sunday, 1 November 2020, 9:37 PM
Time taken 2 hours 21 mins
Overdue 1 min 24 secs
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Question 1
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Dylan Smith opened Dilly’s Car Services on 1 March 2019. During the first month of operations the following
transactions occu
ed:
March1 Dylan invested $60 000 cash in the business.
2 Paid $3000 cash for car wash building rent for the month of March.
3 Purchased car wash equipment for $35 000, paying $20 000 in cash and
$15 000 on credit.
4 Paid $2200 for one-year car wash insurance policy.
10 Received bill from the advertising agency for advertising the opening of
the car wash service, $500.
15 Performed car wash services on account for $9200.
20 Dylan withdrew $700 cash for his personal use.
31 Received $4000 from customers invoiced on 15 March.
Required
a) Prepare general journals to record the above transactions for the month ended 31 March. Na
ations
are required.
) Prepare the cash at bank account in the general ledger.
c) What is the cash at bank ledger balance shown in the unadjusted trial balance as at 31 March 2019?
a) Dylan Car Services General Journal
General Journal
Date Account Name & Na
ation Debit ($) Credit ($)
March 1Cash at Bank 60000
Dylan - Capital 60000
(Dylan invested cash)
2Rent Expense 3000
Cash at Bank 3000
(Payment of building rent – March)
3Equipment 35000
Cash at Bank 20000
Accounts Payable 15000
(Purchased car wash equipment part on
cash and part on credit)
4Prepaid Insurance 2200
Cash at Bank 2200
(Paid one-year insurance policy)
10Advertising expenses 500
Accounts payable 500
(Received invoice from the advertising
agency for advertising)
15Accounts Receivable 9200
Service Revenue 9200
(Perform car services on account)
20Drawings 700
Cash at Bank 700
(Dylan withdrew cash)
31Cash at Bank 4000
Account Receivable 4000
(Received cash from accounts
eceivable)
)
Cash at Bank
DateExplanation Amount ($) DateExplanation Amount ($)
1/3Dylan - Capital XXXXXXXXXX/3Rent Expense 3000
31/3Accounts Receivable 4000 3/3Equipment 20000
4/3Prepaid Insurance 2200
20/3Drawings 700
31/3Balance c/d 38100
64000 64000
1/4Balance
d 38100
c) Cash at Bank balance is $ 38100 Debit
Question 2
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Richard Consultants commenced business on 1 June 2019. At 30 June 2019, the unadjusted trial balance shows the
following balances for selected accounts:
Prepaid insurance $14 400
Equipment 112 000
Bank loan 80 000
Service revenue received in advance 9 600
Service revenue 7 200
Other accounts include:
Accounts receivable
Accumulated depreciation—equipment
Interest payable
Insurance expense
Depreciation expense
Interest expense
Analysis reveals the following additional data pertaining to these accounts:
1. Prepaid insurance is the cost of a 2-year insurance policy, effective 1 June.
2. Depreciation on the equipment is $2000 per month.
3. Richard Consultants took out the loan on 1 June for a period of 6 months at an annual interest rate of
6%.
4. Four customers paid for Richard Consultants’ 6-month service package of $2400 beginning in June.
These customers were serviced in June.
5. Services performed for other customers but not invoiced at 30 June totalled $6000.
Required
Prepare the adjusting entries for the month of June. Na
ations are required.
General journal
Date Account name (na
ation) Debit Credit
June.30 Insurance expense 600
Prepaid insurance 600
(To record insurance expired: $14400 ÷ 24 = $600
per month)
30Depreciation expense 2 000
Accumulated depreciation—equipment 2 000
(To record monthly depreciation)
30Interest expense 400
Interest payable 400
(To accrue interest on loan: $80 000 × 6% × 1/12 =
$400)
30Service revenue received in advance 1 600
Service revenue 1 600
(To record revenue: $2400 ÷ 6 = $400; $400 pe
month × 4 = $1600 or $9600 ÷ 6)
30Accounts receivable 6 000
Service revenue 6 000
(To accrue revenue not invoiced or collected)
Question 3
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Romeo Dry Cleaners had the following accounts and account balances in the adjusted trial
alance columns of its worksheet for the year ended 30 June 2019.
Romeo, Capital $52 000 Rent Expense $21 600
Romeo, Drawings $15 000 Supplies Expense $18 000
Service Revenue $187 000 Depreciation Expense – Dry Cleaning Equipment $12 000
Interest Revenue $6250 Utilities Expense $7500
Interest Expense $2500 Salaries Expense $75 200
Required:
a) Prepare the required closing entries for Romeo Dry Cleaners for the year ended 30 June 2019. Na
ation are
equired.
) Prepare Romeo’s Capital account using the T-account provided below and show the balance at 30 June 2019.
a)
Date Account Name Debit ($) Credit ($)
30/6 Service Revenue 187000
Interest Revenue 6250
P & L Summary 193250
(Closing off revenue to P/L summary)
30/6 P & L Summary 136800
Interest Expense 2500
Rent Expense 21600
Supplies Expense 18000
Depreciation Expense – Dry Cleaning
Equipment
12000
Utilities Expense 7500
Salaries Expense 75200
(Closing off expenses to P/L summary)
30/6 P & L Summary 56450
Romeo, Capital 56450
(Closing off P/L summary to capital a/c)
30/6 Romeo, Capital 15000
Romeo, Drawings 15000
(Closing off drawings to capital a/c)
)
Romeo, Capital
Date Explanation Amount ($) DateExplanation Amount ($)
30/6 Romeo, Drawings XXXXXXXXXX/6Capital Opening 52000
30/6 Balance c/d XXXXXXXXXX/6P & L Summary 56450
108450 108450
1/7Balance
d 93450
Question 4
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The trial balance of Racer Internet as at 30 June 2019 follows.
Debit ($) Credit ($)
Cash at Bank 4300
Accounts Receivable 15100
Prepaid Rent 2000
Supplies 200
Equipment 20600
Accumulated Depreciation 4300
Accounts Payable 6400
Salary Payable 600
Unearned Service Revenue 500
Loan Payable 10000
Racer, Capital 13000
Racer, Drawings 4100
Service Revenue 16600
Salary Expense 3000
Rent Expense 300
Depreciation Expense 400
Supplies Expense 800
Interest Expense 600
XXXXXXXXXX
Required:
a) Prepare the Income Statement for the year ended 30 June 2019.
) Prepare the Statement of Changes in Equity for the year ended 30 June 2019.
c) Calculate the Profit Margin and Return on Assets ratios.
d) Calculate the Cu
ent ratio.
e) Calculate the Debt-to-total assets ratio.
Racer Internet Income Statement
For the Year Ended 30 June 2019
Income
Service Revenue 16600
Expenses
Salary Expense 3000
Rent Expense 300
Depreciation Expense 400
Supplies Expense 800
Interest Expense 600
5100
Profit for the period 11500
Racer Internet Statement of Changes in Equity For the Year Ended 30 June 2019
Racer, Capital 1 July XXXXXXXXXX
Add: Profit for the period 11500
24500
Less: Racer Drawings (4100)
Racer, Capital 30 June XXXXXXXXXX
Profit margin = Profit/Net Sales
= 11500/16600
= 69.28%
Return on Assets = Profit/Average Total Assets
= 11500/37900
= 30.34%
Cu
ent ratio = Cu
ent Assets/Cu
ent Liabilities
= 21600/7500
= 2.88 : 1
Debt to total assets
atio
= Total Liabilities/Total Assets
= 17500/37900
= 46.17%
Question 5
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(a)
(i) Indicate whether each of the following costs of a timber doors manufacturer would be classified as direct
materials, direct labour, manufacturing overhead or period cost:
1 Timber cost $10000
2 Wages for craftsmen $5800
3 Depreciation of equipment used to make
timber doors $15000
4 Salary of the factory manager in charge of
pre-hung timber doors $8000
5 Cost of shipping pre-hung timber doors
$10000
6 Rates and taxes on factory building $5200
7 Sales commission related to pre-hung
timber doors $4000
(ii) Calculate the total manufacturing cost
(iii) Calculate the conversion cost
(b)
Louise Ltd makes personalised water bottles that sell for $20 each. For the coming year, management expects fixed
costs to total $220 000 and variable costs to be $9.00 per unit.
Required
(i) Calculate the contribution margin ratio.
(ii) Calculate
eak-even sales in dollars.
(iii) Calculate the margin of safety percentage assuming actual sales are $500 000.
(iv) Calculate the sales required to earn profit of $165 000.
Contribution margin per unit = SP – VC
= $20 – $9
= $11
a) Contribution margin ratio = CM per unit/SP
= $11/$20
= 55%
) Break-even sales (in dollars) = FC/CM ratio
= $220000/55%
Margin of safety
=
=
$400000
Actual Sales – BE sales
=$500000 - $400000
=$100000
c) Margin of safety ratio =Margin of safety/Actual Sales
=$100000/$500000
=20%
d) Required sales =(FC + Target Profit)/CM ratio
=($220000 + $165000)/55%
=$700000
Question 1
Not yet saved
Marked out of
20.00
Dylan Smith opened Dilly’s Car Services on 1 March 2019. During the first month of operations the following
transactions occu
ed:
March1 Dylan invested $60 000 cash in the business.
2 Paid $3000 cash for car wash building rent for the month of March.
3 Purchased car wash equipment for $35 000, paying $20 000 in cash and
$15 000 on credit.
4 Paid $2200 for one-year car wash insurance policy.
10 Received bill from the advertising agency for advertising the opening of
the car wash service, $500.
15 Performed car wash services on account for $9200.
20 Dylan withdrew $700 cash for his personal use.
31 Received $4000 from customers invoiced on 15 March.
Required
a) Prepare general journals to record the above transactions for the month ended 31 March. Na
ations
are required.
) Prepare the cash at bank account in the general ledger.
c) What is the cash at bank ledger balance shown in the unadjusted trial balance as at 31 March 2019?
(a)
Dylan Car Services
General Journal
Question 5
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(a)
(i) Indicate whether each of the following costs of a timber doors manufacturer would be classified as direct
materials, direct labour, manufacturing overhead