Question 1 (Topic 4)

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

Account Debit Credit

Cash at bank1 8,140

Accounts receivable 21,340

Office supplies 640

Prepaid advertisement 3,880

Hire cars 93,600

Accumulated Depreciation - hire cars 39,400

Accounts payable 10,800

Unearned hire fees 2,260

Helena, Capital 68,340

Helena, Drawings 20,600

Hire fees revenue 98,700

Wages expense 50,620

Fuel and oil expense 10,680

219,500 219,500

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 10-column worksheet for the year ended 30nJune 2019

Question 2 (Topic 7)

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.

b)Post from cash receipts and cash payments journals to the Cash at Bank ledger account and balance the account.

c)Prepare bank reconciliation statement at 31 May.

Cash Receipts Journal

Date Particulars Cash at Bank

Cash Payments Journal

Date Particulars Cash at Bank

Question 3 (Topic 8)

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.

b)Prepare journal entries to adjust the bad debts expense and allowance for doubtful debts account.

c)Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June 2020.

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.

Question 4 (Topic 9)

The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST.

Date Units Units cost Total cost

1/12 Beginning inventory 700 $ 12.00 $ 8,400

10/12 Purchase 500 $ 12.60 $6,300

15/12 Purchase 300 $13.20 $3,960

23/12 Purchase 500 $14.00 $ 7,000

Totals $2,000 $25,660

Margaret's Megamart Ltd uses the periodic 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.

b)Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method.

c)Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results.

Question 5 (Topic 10)

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 the second year using each of the following depreciation methods

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.

c)Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight-line method.

Question 6 (Topic 11)

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.

b)Record the payment of the warranty claim on 16 September 2019 in general journal format.