2021 Accounting-NHT Written examination
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ACCOUNTING Written examination Thursday 27 May 2021 Reading time: 2.00 pm to 2.15 pm (15 minutes) Writing time: 2.15 pm to 4.15 pm (2 hours) QUESTION BOOK Structure of book Number of questions Number of questions to be answered Number of marks 11 11 100 • Students are permitted to bring into the examination room: pens, pencils, highlighters, erasers, sharpeners, rulers and one scientific calculator. • Students are NOT permitted to bring into the examination room: blank sheets of paper and/or correction fluid/tape. Materials supplied • Question book of 9 pages • Answer book of 20 pages Instructions • Write your student number in the space provided on the front cover of the answer book. • Answer all questions in the answer book. • All written responses must be in English. At the end of the examination • You may keep this question book. Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room. © VICTORIAN CURRICULUM AND ASSESSMENT AUTHORITY 2021 Victorian Certificate of Education 2021
Transcript of 2021 Accounting-NHT Written examination
ACCOUNTINGWritten examination
Thursday 27 May 2021 Reading time: 2.00 pm to 2.15 pm (15 minutes) Writing time: 2.15 pm to 4.15 pm (2 hours)
QUESTION BOOK
Structure of bookNumber of questions
Number of questions to be answered
Number of marks
11 11 100
• Studentsarepermittedtobringintotheexaminationroom:pens,pencils,highlighters,erasers,sharpeners,rulersandonescientificcalculator.
• StudentsareNOTpermittedtobringintotheexaminationroom:blanksheetsofpaperand/orcorrectionfluid/tape.
Materials supplied• Questionbookof9pages• Answerbookof20pages
Instructions• Writeyourstudent numberinthespaceprovidedonthefrontcoveroftheanswerbook.• Answerallquestionsintheanswerbook.• AllwrittenresponsesmustbeinEnglish.
At the end of the examination• Youmaykeepthisquestionbook.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2021
Victorian Certificate of Education 2021
2021ACCOUNTINGEXAMQB(NHT) 2
Question 1 (16marks)SevilleSportssellsspecialistsportscamerasandaccessories.ThebusinessreportsmonthlyandusestheFirstIn,FirstOut(FIFO)inventorycostassignmentmethod.ItsbestsellingproductistheGPlusAction(GPA)camera,whichitpurchasesfromSupaOptixandwhichitsellsfor$400 (plusGST).On1January2021,therewere50GPAcamerasonhandfor$210each(plusGST).DuringJanuary,thefollowingtransactionsoccurred:• 12January Purchased40GPAcamerasat$194each(plusGST)(Invoice1254)
Deliverywas$120(plusGST).• 25January Purchased15GPAcamerasat$200each(plusGST)(Invoice2875)
Deliverywas$260(plusGST)(Cheque143).Thisdeliveryincludedarangeofothercamerasandaccessoriesthatwerepurchased.
• 28January ReturnedthreeGPAcamerasfromthepurchaseon25Januaryduetofaultylenscovers(CreditNote64)
a. Explainhowthedeliverycostson12Januaryand25Januaryshouldeachbetreated. 3marks
b. PreparetheGeneralJournalentrytorecordthetransactionon28January. Anarrationisnotrequired. 2marks
On31January2021,aphysicalstocktakeshowed20GPAcamerasonhand.Nostocklossesorgainswereidentified.
c. Calculatethetotalcosttobeassignedtothe20GPAcamerasat31January. 1mark
TheownerdecidestoreducethesellingpriceoftheGPAcamerasonhandto$150each(plusGST)asanewmodelhasbeenreleased.Toencouragesales,awaterproofcarrycase,whichsellsfor $15(plusGST),willbeincludedwitheachGPAcamerasold.
d. Calculatethenetrealisablevalueofthe20GPAcamerasonhandat31January2021. 2marks
e. Explainhowthe20GPAcamerasshouldbevaluedat31January2021. 2marks
f. PreparetheGeneralJournalentryarisingfrompart d. Anarrationisnotrequired. 2marks
g. Theownerisconcernedaboutpossiblefraudandisreviewinginternalcontrolproceduresrelatingtothepaymentofaccounts.Currently,thebookkeeperreceivesinvoicesfromsuppliers,checksthediscounttermsandduedateforpayment,andpreparesachequeormakesanelectronicfundstransfer(EFT)paymentontheappropriateday.
AnalyseSevilleSports’currentprocessandsuggesttwoproceduresthatcouldbeimplementedtostrengtheninternalcontroloverthepaymentofaccounts. 4marks
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Question 2 (8marks)SportingLooksellshigh-fashionsportsclothing.Itoperatesinahighlycompetitivemarketandsellsitsproductsfromashopfrontforcashandcredit.Themanageralwaysbuysinventoryinbulkandusescashwheneverpossible.Thebusiness’smottois‘sellitsoonandsellitcheap’.Amark-upof30%oncostisappliedtoallinventory.Inventoryispurchasedfromawiderangeofsuppliers.Attimes,inventoryhasbeenpurchasedatlocalcraftmarketsand,therefore,someproductsdonothaveappropriateofficiallicensingandmaynotbebranded.However,thisunbrandedinventoryhasproventobequitepopularwithcustomers.Thelayoutofthestoreisdisorganised,withinventoryspreadovermanytablesandracks,andhandwrittenpricetagsoneachitem.Customersaregivencreditatthediscretionofthemanager,whobelievesheisa‘goodjudgeofcharacter’.Credittermsare30daysandtheAccountsReceivableTurnoveriscurrently48days.Financialreportsoverthelastthreeyearsshowinconsistentsales,highlevelsofinventoryonhand,inventorylossthatisabovetheindustryaverageandregularnetlosses.Theownerofthebusinesshasacceptedthissituationtodatebecausetheybelievethatthingswillturnaroundasthebusinessbecomesbetterknown.
a. Outlineoneethicalissuerelatingtotheinventorypracticesofthebusiness. 2marks
b. DiscussstrategiesthatSportingLookcouldusetoimproveitsinventorymanagement. 6marks
2021ACCOUNTINGEXAMQB(NHT) 4
Question 3 (7marks)Thefollowinggraphrepresentsdifferentvaluesrelatingtoadeliveryvanthatabusinesspurchasedin2014.
2014 2015 2016 2017 2018 2019 2020
$45000
$40000
$35000
$30000
$25000
$20000
$15000
$10000
$5000
0
Delivery van
year
A
B
C
a. Statewhateachline,A,BandC,onthegraphrepresents. 3marks
b. Thebusinessisplanningtopurchaseanewdeliveryvanin2021.ItisdecidingbetweenOption1,apetroldeliveryvan,andOption2,anelectricdeliveryvan(hybrid).Thebusinesshassecuredaloanofupto$55000topurchasethedeliveryvan.Thebusinessprovidesthefollowingestimatesforeachoption.
Option 1 – Petrol delivery van
Option 2 – Electric delivery van
Delivery van $42000 $56000
Van fittings $2000 $2000
Trade-in $3000 $2000
Estimated residual value $6000 $11000
Registration and insurance (per year)
$2500 $2500
Fuel (per year) $16000 $6000
Servicing (per year) $3000 $7000
Thebusinessplanstokeepthenewdeliveryvanforthreeyearsbeforereplacingit.Itplanstousethedeliveryvanconsistentlyduringthistimeanddepreciateitusingthestraight-linemethod.
Completethetableprovidedand,usingalltheinformation,recommendwhichoptionthebusinessshouldchooseandjustifyyourrecommendation. 4marks
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Question 4 (11marks)BeanBazaarpurchasedacoffeemachineon1February2020for$13200(includingGST).Thecoffeemachinewillbedepreciatedat25%perannumusingthestraight-linemethodforfouryears,afterwhichitwillbereplaced.Theresidualvalueisexpectedtobezero.Thebusinessreportsevery12monthsat30June.a. Calculatethedepreciationexpenseat30June2020. 1mark
b. CompletetheBudgetedBalanceSheetextractasat30June2021. 2marks
c. Theownerunexpectedlydecidedtoreplacethecoffeemachineon31December2020.Itwassoldfor$4000cash.Anewcoffeemachinewaspurchasedonthesamedayfor$15400(includingGST).Itwasfinancedthroughaloanof$10000fromBLDBankon1December2020withthebalancepaidincash.
PreparetheGeneralJournalentriestorecordthefollowing:• depreciationexpenseasat31December2020• thedisposaloftheoldcoffeemachine• receiptoftheloanandpurchaseofthenewcoffeemachine
Narrationsarenotrequired. 8marks
Question 5 (4marks)AppliancesAplentysellsawiderangeofhouseholdgoodsandreportsonamonthlybasis.60%ofsalesareonextendedcredittermsovera12-monthperiodwithnodiscountoffered.Thereisahighriskofbaddebtsandthebusinessmakesanallowancefordoubtfuldebtsequalto5%ofnetcreditsales.At31March2021,relevantbalanceswereasfollows:AccountsReceivable $770000 DrAllowanceforDoubtfulDebts $5000 Cr
DuringApril,thefollowingoccurred:Creditsales(net) $90000 (excludingGST)Accountsreceivablewrittenoffasbad $6600Cashcollectedfromaccountsreceivable $70000
a. PreparetheGeneralJournalentryrequiredtorecordtheAllowanceforDoubtfulDebtsat 30April2021.
Anarrationisnotrequired. 2marks
b. ShowhowtheAllowanceforDoubtfulDebtsaccountwouldappearintheledgeraftertheadjustmenthasbeenmade. 2marks
2021ACCOUNTINGEXAMQB(NHT) 6
Question 6 (12marks)TurvelTradersreportsmonthlyandusesa100%mark-uponitsinventory.ThebusinessispreparingbudgetedreportsforJune2021.TheBalanceSheetasat31May2021showedthefollowing.
Turvel Traders Balance Sheet as at 31 May 2021
$ $
Current Assets Current Liabilities
Bank 8000 AccountsPayable 22000
AccountsReceivable 26400 AccruedWages 400
Inventory 60000 GSTClearing 4000
PrepaidRentExpense 1500
Non-Current Assets Owner’s Equity
Equipment 126000 Capital 165500
AccumulatedDepreciation (30000)
Total Assets $191 900 Total Equities $191 900
Additional information• 60%ofsalesareoncredit.Credittermsare2/7,n/20,with50%ofaccountsreceivable
payingwithinthediscountperiodandtherestpayinginthemonthaftersale.Actual and budgeted sales figures (excluding GST)Maysales(actual) $40000Junesales(budgeted) $50000
• Purchasesofinventoryareoncreditandpaidinthemonthafterpurchase.Creditterms aren/30.Theinventorybalancewillremainconstant.
• Rentis$1500(plusGST)permonthandispaidthreemonthsinadvance.Thelastpaymentwasmadeon1MarchforApril,MayandJune.Thenextpaymentwillbemadeon1June.
• OtherpaymentsinJunewillbeasfollows:Wages $4600Drawings $5000Equipment $5280(includingGST)
• Equipmentisdepreciatedat25%perannumusingthereducingbalancemethod.Thenewequipmentwillbepurchasedon1June.
• ThenextGSTsettlementwillbemadeinJuly.
a. CalculatetheestimatedcashreceivedinJunefromaccountsreceivable. 2marks
b. PreparetheoperatingsectionoftheBudgetedCashFlowStatementforthemonthending 30June2021. 6marks
c. PrepareaBudgetedIncomeStatementforthemonthending30June2021. 4marks
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Question 7 (5marks)Abusinessisreviewingitsprofitability.DetailsoftheNetProfitMarginforthelastthreeyearsshowedthefollowing.
2018 2019 2020
Net Profit Margin 21% 17% 14%
a. DescribetheimplicationsofthetrendshowninthetableabovefortheNetProfitMargin. 2marks
b. Identifyoneotherrelevantfinancialindicatorandexplainhowitcouldbeusedtoenhancethisbusiness’sreviewofprofitability. 3marks
Question 8 (5marks)Abusinessisconcernedaboutitsliquidity.ItsCashFlowCoverhasdecreasedfromeighttimesinthethree-monthperiodended31Decembertothreetimesinthethree-monthperiodended 31March.TheownerisinformedthatiftheInventoryTurnoverandtheAccountsReceivableTurnovertrendtoaslowerrate,thentheCashFlowCovermaydecreasefurther.AverageCurrentLiabilitiesareexpectedtoremainconstant.
Selectoneofthesefinancialindicators,andexplainhowitmaycausetheCashFlowCovertodecreaseandwhatstrategiesmaybeusedtoimprovetheCashFlowCover.
Question 9 (3marks)On30January2021,TheMusicianShopreceived$800inadvancetosupplyacustom-madeguitarforalocalmusician.On2February,abasicmodeloftheguitarwasdeliveredtoTheMusicianShopforcustomisation.On14February,thecustomisedguitarwasreadyanddeliveredtothecustomer.Aninvoiceforthefinalpaymentof$520(plusGST)wassenton28Februaryandpaymentwasreceivedon10March.
Withreferencetooneaccountingassumption,explaininwhichmonththerevenueshouldberecognised.
2021ACCOUNTINGEXAMQB(NHT) 8
Question 10 (13marks)Wood234sellscustom-madediningtables.Thetablesaremadetoorderanddesignedtosuiteachcustomer.Customershavetoprepayinfullforthetableswhentheyplacetheirorders.Thebusinessreportsmonthlyandusesa100%mark-up.AsummaryofthecashreceiptsandcashpaymentsforAprilrevealedthefollowing.
Cash receipts
Date 2021
Item $
April1 UnearnedSales 99000
Cash payments
Date 2021
Item $
April1 PrepaidNewspaperAdvertising 22000
Inventory 26400
15 CleaningExpense 4400
30 Wages 30000
Additional information• Therewerenoprepaidoraccruedexpensesasat31March2021.• Allitemsinthesummaryabove,otherthanwages,includeGST.• Tablesaresoldfor$3000(plusGST)each.By30April2021,25tableshadbeendelivered
tocustomers.• Newspaperadvertisingis$1000(plusGST)peradvertisement.At30April2021,only
15advertisementshadbeenpublished.• Cleaningexpensesforthemonthare$5500(plusGST).
a. Recordthebalancedayadjustmentsfor30April2021intheGeneralJournalprovided. Narrationsarenotrequired. 6marks
Wood234hasequipmentvaluedat$32000.Depreciationhasnotbeenrecognisedbecausethemanagerhassaidthat‘allequipmentissowellmaintainedthatdepreciationisnotnecessary’.
b. Withreferencetoone qualitativecharacteristic,analysethemanager’sstatement. 4marks
c. ExplainhowUnearnedSalesmeetsthedefinitionofanaccountingelement. 3marks
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Question 11 (16marks)On31March2021,theownerofabusinessfoundthefollowingsourcedocumentshadnotbeenrecorded.Thebusinessreportsmonthly.
1March2021 Cheque#25 15March2021
To: BusiRentFor: Rentforthe12months
commencing1March2021
GST:Amount:
$9600
$960$10560
To: Cre8For: AdvertisingforMarch
GST:Amount:
$1800
$180$1980
EFT1347
Additional information• RevenueforMarchtotalled$44600.• Expensespriortotherecordingofthedocumentsabovetotalled$19200.• Onthelastdayofthemonth,theownerwithdrew$7000worthofinventory.Thishadnot
beenrecorded.
a. RecordthesourcedocumentsandanynecessarybalancedayadjustmentsintheGeneralLedgeraccountsprovided,andcloseorbalancetheaccountsinreadinessforthenextmonth. 9marks
b. CompletetheGeneralLedgeraccountsprovided:• ProfitandLossSummary• Capital 4marks
c. Withreferencetooneaccountingassumption,explainwhyitisnecessarytocloserevenueandexpenseaccountsattheendofthereportingperiod. 3marks
END OF QUESTION BOOK
Instructions
• Aquestionbookisprovidedwiththisanswerbook.• Answerallquestionsinthespacesprovidedinthisbook.• Writeyourstudent numberinthespaceprovidedaboveonthispage.• RefertoInstructionsonthefrontcoverofthequestionbook.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into the examination room.
©VICTORIANCURRICULUMANDASSESSMENTAUTHORITY2021
ACCOUNTINGWritten examination
Thursday 27 May 2021 Reading time: 2.00 pm to 2.15 pm (15 minutes) Writing time: 2.15 pm to 4.15 pm (2 hours)
ANSWER BOOK
SUPERVISOR TO ATTACH PROCESSING LABEL HEREVictorian Certificate of Education 2021
STUDENT NUMBER
Letter
2021ACCOUNTINGEXAMAB(NHT) 2
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ThIS pAGE IS BlANK
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Question 1 –continuedTURN OVER
Question 1 (16marks)a. 3marks
Explanation
b. 2marksSeville SportsGeneral Journal
Date 2021
Details Debit Credit
c. 1mark
Working space
Total cost to be assigned to the 20 GpA cameras at 31 January $
2021ACCOUNTINGEXAMAB(NHT) 4
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Question 1 –continued
d. 2marks
Working space
Net realisable value of the 20 GPA cameras $
e. 2marks
Explanation
f. 2marksSeville SportsGeneral Journal
Date 2021
Details Debit Credit
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g. 4marks
Analysis
2021ACCOUNTINGEXAMAB(NHT) 6
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Question 2 (8marks)a. 2marks
Outline
b. 6marks
Discussion
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Question 3 (7marks)a. 3marks
A
B
C
b. 4marks
Working space
Option 1 – petrol delivery van Option 2 – Electric delivery van
Depreciation expense (per year)
Total other van expenses (per year)
Recommendation
Justification
2021ACCOUNTINGEXAMAB(NHT) 8
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Question 4 –continued
Question 4 (11marks)a. 1mark
Working space
Depreciation expense at 30 June 2020 $
b. 2marksBean Bazaar
Budgeted Balance Sheet (extract) as at 30 June 2021
Non-Current Assets
c. 8marks
Working space
9 2021ACCOUNTINGEXAMAB(NHT)
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Bean BazaarGeneral Journal
Date 2020
Details Debit Credit
2021ACCOUNTINGEXAMAB(NHT) 10
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Question 5 (4marks)a. 2marksAppliances AplentyGeneral Journal
Date 2021
Details Debit Credit
b. 2marksAllowance for Doubtful Debts
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
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CONTINUES OVER pAGE
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Question 6 –continued
Question 6 (12marks)a. 2marks
Working space
Estimated cash received in June $
b. 6marksTurvel Traders
Budgeted Cash Flow Statement (extract) for the month ending 30 June 2021
$ $
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c. 4marksTurvel Traders
Budgeted Income Statement for the month ending 30 June 2021
$ $
2021ACCOUNTINGEXAMAB(NHT) 14
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Question 7 (5marks)a. 2marks
Description
b. 3marks
Financial indicator
Explanation
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Question 8 (5marks)
Financial indicator
Explanation
Question 9 (3marks)
Accounting assumption
Explanation
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Question 10 –continued
Question 10 (13marks)a. 6marksWood234General Journal
Date 2021
Details Debit Credit
b. 4marks
Qualitative characteristic
Analysis
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c. 3marks
Explanation
2021ACCOUNTINGEXAMAB(NHT) 18
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Question 11 –continued
Question 11 (16marks)a. 9marks
Bank
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
March1 Balance 42890 March1 AccountsPayable 19500
3 Sales/GSTClearing 13200 Inventory/GSTClearing 8800
12 Capital 2000
30 AccountsReceivable 17500
Loan–BellBank 20000
GST Clearing
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
March1 Bank 800 March1 Balance 6370
AccountsPayable 2550 3 Bank 1200
17 AccountsReceivable 3260
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Inventory
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
March1 Balance 62000
Drawings
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
prepaid Rent Expense
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
Advertising Expense
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
Question 11 –continuedTURN OVER
2021ACCOUNTINGEXAMAB(NHT) 20
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b. 4marksProfit and Loss Summary
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
Capital
Date 2021
Cross-reference Amount Date 2021
Cross-reference Amount
March1 Balance 46300
12 Bank 2000
c. 3marks
Accounting assumption
Explanation
END OF ANSWER BOOK
