Week 6 Review Questions: E3.3, PSA4.

10

Week 6 Review Questions: E3.3, PSA4.10 Interest Expense 7,000

Jun 30 EXERCISE 3.3 (a) (b) (c) Revenue recognition criteria. Accounting period concept. No violation (No asset should be shown at an amount greater than the future benefits to be realised from that asset. Inventory is valued at the lower of cost or net realisable value). Going concern principle. Cost principle. If the mark-up was recognised in profit, then revenue recognition would also be violated. Accounting entity concept.

Int Payable

Interest Payable Jun 30

Int Expense

7,000

(d) (e) (f)

Jun 30

Inc Tax Pay

Income Tax Expense 24,840

Income Tax Payable Jun 30 Inc Tax Exp

24,840

PROBLEM SET A 4.10 (a) Depreciation Expense Accumulated Depreciation-Buildings 10,000 10,000

(c)
A-WHOLE-LOT-OF-STUFF WHOLESALE LTD Adjusted Trial Balance As of 30 June 2010 Debit Credit

Depreciation Expense 9,000 Accumulated Depreciation-Store Equipment Interest Expense Interest Payable Income Tax Expense Income Tax Payable 7,000

9000

7,000 24,840 24,840

(b) Accumulated Depreciation-Buildings Jun 30 Balance Depr Expense

57,000 10,000 67,000

Accumulated Depreciation-Store Equipment Jun 30 Balance Depr Expense

42,400 9,000 51,400

Jun 30

Accum Depr

Depreciation Expense-Buildings 10,000

Jun 30

Accum Depr

Depreciation Expense-Store Equipment 9,000

Cash Accounts Receivable Inventory Land Buildings Accumulated Depreciation-Buildings Store Equipment Accumulated Depreciation-Store Equipment Accounts Payable Income Tax Payable Interest Payable Bank Loan Share Capital Retained Profits Dividends Interest Revenue Sales Sales Return and Allowances Discount Allowed Cost of Goods Sold Salaries Expense Office Salaries Expense Sales Electricity Expense Repair Expense (computers) Petrol and Oil Expense Insurance Expense Depreciation Expense-Buildings Depreciation Expense-Store Equipment Income Tax Expense Interest Expense TOTALS

33,400 37,600 110,000 92,000 197,000 67,000 83,500 51,400 37,500 24,840 7,000 50,000 200,000 67,800 10,000 1,000 921,100 1,000 3,600 709,900 55,000 14,800 9,400 8,900 7,200 3,500 10,000 9,000 24,840 7,000 1,427,640

1,427,640

(d)

ACCT5001 S1 2010 Week 6 Review Questions.doc

12/04/2010

ACCT5001 S1 2010 Week 6 Review Questions.doc

12/04/2010

Week 6 Review Questions: E3.3, PSA4.10 A-WHOLE-LOT-OF-STUFF WHOLESALE LTD Income Statement For the year ended 30 June 2010 INCOME Sales Revenue: Gross Sales Revenue Less: Sales Returns and Allowances Net Sales Revenue Less: Cost of Goods Sold GROSS PROFIT Other Income: Interest Revenue Total Operating Revenue OPERATING EXPENSE Selling Expenses: Depr Expense-Store Equipment Sales Salaries Expense Administrative Expenses: Depr Expense-Buildings Insurance Expense Office Salaries Expense Petrol and Oil Expense Repair Expense (computer) Electricity Expense Financial Expenses: Discount Allowed Interest Expense Total Operating Expense PROFIT BEFORE INCOME TAX Less: Income Tax Expense PROFIT A-WHOLE-LOT-OF-STUFF WHOLESALE LTD 3,600 7,000 10,600 10,000 3,500 55,000 7,200 8,900 9,400 94,000 9,000 14,800 23,800 1,000 921,100 (1,000)

Week 6 Review Questions: E3.3, PSA4.10 Retained Earnings Calculation For the year ended 30 June 2010

Retained Earnings, 1 July 2009 Add: Profit Less: Dividends Retained Earnings, 30 June 2010 920,100 709,900 210,200 A-WHOLE-LOT-OF-STUFF WHOLESALE LTD Statement of Financial Position As of 30 June 2010

67,800 57,960 125,760 (10,000) 115,760

1,000 211,200

ASSETS Current Assets: Cash Accounts Receivable Inventory Total Current Assets Non-Current Assets Property, plant and equipment Land Buildings Less: Accum Depr Store Equipment Less: Accum Depr Total Non-Current Assets TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities Bank Loan (portion due in 2011) Accounts Payable Interest Payable Income Tax Payable Total Current Liabilities Non-Current Liabilities Bank Loan Total Liabilities Equity Share Capital Retained Earnings Total Equity TOTAL LIABILITIES AND EQUITY

33,400 37,600 110,000 181,000

92,000 197,000 67,000_130,000 83,500 51,400_ 32,100 254,100 435,100

15,000 37,500 7,000 24,840 84,340 35,000 119,340

128,400 82,800 (24,840) 57,960

200,000 115,760 315,760 435,100

ACCT5001 S1 2010 Week 6 Review Questions.doc

12/04/2010

ACCT5001 S1 2010 Week 6 Review Questions.doc

12/04/2010