nt Task – Tutorial Questions
Unit Code: HI5001 – Mid Term/Block Mode
Unit Name: Accounting for Business Decisions
Assignment: Tutorial Questions
Due: 11:30pm Friday, 23 October 2020
Weighting:50%
Total Assignment Marks:50 marks
Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit
Unit Learning Outcomes Assessed:4, 5, 6, 7
Description: Each week students were provided with three tutorial questions of varying degrees of difficulty.These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions.Your task is to answer a selection of tutorial questions for the following topics and submit these answers in a single document.
The questions to be answered are:
Question 1 (Topic 4) - 10 marks
The unadjusted trial balance of Helena’s Hire Cars is shown below (ignore GST).
Helena’s Hire Cars
Trial Balance
As at 30 June 2019
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Account
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Debit
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Credit
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Cash at bank
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18,140
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Accounts receivable
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21,340
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Office supplies
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640
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Prepaid advertising
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3,880
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Hire cars
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93,600
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Accumulated Depreciation - hire cars
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39,400
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Accounts payable
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10,800
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Unearned hire fees
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2,260
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Helena, Capital
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68,340
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Helena, Drawings
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20,600
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Hire fees revenue
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98,700
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Wages expense
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50,620
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Fuel and oil expense
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10,680
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219,500
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219,500
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Additional information
a.Petrol purchased on credit for $680 and used during the last week in June has not been paid for or recorded.
b.A physical count showed office supplies totalling $340 were still on hand at 30 June.
c.Depreciation for 1 year on the hire cars is $12,400.
d.Prepaid advertising has a balance of $600 at the end of the month.
e.The balance in the Unearned Hire Fees account includes $1,800 received in May for hire services completed in June.
Required:
Prepare a 10-column worksheet for the year ended 30 June 2019.
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Unadjusted trial balance
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Adjustments
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Adjusted trial balance
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Income statement
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Balance sheet
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Account Title
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Debit
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Credit
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Debit
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Credit
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Debit
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Credit
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Debit
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Credit
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Debit
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Credit
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Cash at Bank
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18,140
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Accounts Receivable
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21,340
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Office Supplies
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640
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Prepaid advertising
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3,880
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Hire Cars
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93,600
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Accum. Depr. Hire Cars
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39,400
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Accounts Payable
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10,800
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Unearned Hire Fees
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2,260
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Helena, Capital
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68,340
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Helena, Drawings
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20,600
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Hire Fees Revenue
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98,700
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Wages Expense
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50,620
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Fuel and Oil Expense
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10,680
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$219,500
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$219,500
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Profit for the year
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Question 2 (Topic 7) - 9 marks
Below is information about Adam Ltd’s cash position for the month of May 2020.
1.The general ledger Cash at Bank account had a balance of $42,400 on 30 April.
2.The cash receipts journal showed total cash receipts of $585,408 for May.
3.The cash payments journal showed total cash payments of $530,148 for May.
4.The June bank statement reported a bank balance of $82,368 on 30 May.
5.Outstanding cheques at the end of May were: no. 221, $2896; no. 225, $308; and no. 230, $820.
6.Cash receipts of $20,180 for 31 May were not included in the May bank statement.
7.A dishonoured cheque written by a client Jim Ltd, $272
8.A credit for an electronic transfer from a customer of $1,288
9.Interest earned, $88
10.Account and transaction fees, $240.
Required:
a)Update the cash receipts and cash payments journals by adding the necessary adjustments and calculate the total cash receipts and cash payments for May. (4 marks)
b)Post from cash receipts and cash payments journals to the Cash at Bank ledger account and balance the account. (1 mark)
c)Prepare a bank reconciliation statement at 31 May. (4 marks)
Cash Receipts Journal
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Date
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Particulars
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Cash at Bank
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Cash Payments Journal
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Date
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Particulars
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Cash at Bank
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Question 3 (Topic 8) - 9 marks
On 1 June 2020, Mason Ltd. had Accounts Receivable $424,778 and Allowance for Doubtful Debts accounts $6,050. Ignore GST.
During June, the following transactions occurred:
1.Revenue earned on credit, $597,500.
2.Sales returns, $12,050.
3.Accounts receivable collected, $700,000.
4.Accounts written off as uncollectable, $5,926.
Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $6,750 on the balance sheet as at 30 June 2020. Ignore GST.
Required:
a)Prepare general journal entries to record the four transactions. (4 marks)
b)Prepare journal entries to adjust the bad debts expense and allowance for doubtful debts account. (1.5 marks)
c)Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June 2020. (2 marks)
d)On 10 July 2020, Kent Ltd, whose $1,300 account had been written off as uncollectable in June, paid its account in full. Prepare journal entries to record the collection. (1.5 marks)
Question 4 (Topic 9) - 8 marks
The following information relates to the inventory of Margaret’s Megamart Ltd during December. Ignore GST.
Date
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Units
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Units cost
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Total cost
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1/12
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Beginning inventory
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700
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$ 12.00
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$ 8,400
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10/12
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Purchase
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500
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12.60
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6,300
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15/12
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Purchase
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300
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13.20
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3,960
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23/12
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Purchase
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500
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14.00
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7,000
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Totals
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2,000
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$25,660
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Margaret’s Megamart Ltd uses theperiodic inventory system. A physical count on 31 December verified that 650 units were on hand.
Required:
a)Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. (3 marks)
b)Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method. (3 marks)
c)Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results. (2 marks)
Question 5 (Topic 10) - 9 marks
Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.
Required:
a)Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for thesecond yearusing each of the following depreciation methods (6 marks)
·straight-line
·diminishing balance (depreciation rate has been calculated as 31%)
·units of production (assume the van was driven 50,000 kilometers in the first year and 78,000 kilometres during the second financial year).
b)Record the adjusting entries for the depreciation at the end of the second financial year using straight-line method. (1 mark)
c)Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight-line method. (2 marks)
Question 6 (Topic 11) - 5 marks
The following information is related to Sunglow Solar Ltd:
·Sales for the year ended 30 June 2019 was $1,200,000
·Provision for warranties before adjustment was $36,000
At 30 June 2019, Sunglow Solar Ltd. adjusted its Provision for Warranties so that it would be equal to 4% of sales for the year ended on that date.
On 16 September 2019, a successful claim for warranty on faulty goods to the cost of $700 was made on Sunglow Solar Ltd.
Required:
a)Prepare the general journal entry at 30 June 2019 to adjust the Provision for Warranties to the required level. (3 marks)
b)Record the payment of the warranty claim on 16 September 2019 in general journal format. (2 marks)
Submission Directions:
The assignment has to be submitted via Blackboard.Each student will be permitted one submission to Blackboard only.Each student needs to ensure that the document submitted is the correct one.
Academic Integrity:
(see next page)
Academic Integrity
Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates. Accordingly, all assessment tasks need to comply with academic integrity guidelines.Table 1 identifies the six categories of Academic Integrity breaches.If you have any questions about Academic Integrity issues related to your assessment tasks, please consult your lecturer or tutor for relevant referencing guidelines and support resources.Many of these resources can also be found through the Study Skills link on Blackboard.
Academic Integrity breaches are a serious offence punishable by penalties that may range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.
Table 1: Six categories of Academic Integrity breaches
Plagiarism
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Reproducing the work of someone else without attribution. When a student submits their own work on multiple occasions this is known asself-plagiarism.
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Collusion
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Working with one or more other individuals to complete an assignment, in a way that is not authorised.
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Copying
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Reproducing and submitting the work of another student, with or without their knowledge. If a student fails to take reasonable precautions to prevent their own original work from being copied, this may also be considered an offence.
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Impersonation
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Falsely presenting oneself, or engaging someone else to present as oneself, in an in-person examination.
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Contract cheating
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Contracting a third party to complete an assessment task, generally in exchange for money or other manner of payment.
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Data fabrication and falsification
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Manipulating or inventing data with the intent of supporting false conclusions, including manipulating images.
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Source: INQAAHE, 2020
If any words or ideas used the assignment submission do not represent your original words or ideas, you must cite all relevant sources and make clear the extent to which such sources were used.
In addition, written assignments that are similar or identical to those of another student is also a violation of the Holmes Institute’s Academic Conduct and Integrity policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through suspension of enrolment.The penalty would be dependent on the extent of academic misconduct and your history of academic misconduct issues.
All assessments will be automatically submitted to SafeAssign to assess their originality.
Further Information:
For further information and additional learning resources please refer to your Discussion Board and assessment details on Blackboard for the unit.