Accounting for Business Decisions Supplementary Assessment

This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit. The questions cover topics such as bank reconciliation, bad debts expense, inventory management, depreciation, adjusting entries, and closing entries. The assessment is for the course HI5001 Accounting for Business Decisions at an unspecified college or university. Get solved assignments, essays, dissertation, and more at Desklib.

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Student Number: (enter on the line below)
Student Name: (enter on the line below)
HI5001
ACCOUNTING FOR BUSINESS DECISIONS
SUPPLEMENTARY ASSESSMENT
TRIMESTER 1, 2022
TIME ALLOWED: 4.5 hours
All answers must be submitted within this time frame. Late submissions are not accepted.
Assessment Weight: total marks50
Instructions:
 All questions must be answered by using the answer bo es provided in this paperx .
 our answers must be submittedY in this document to lackboard by the published dueB
date and ti me. Late submissions are not accepted.
 efore commencing save this document with yourB , Student Number and Unit Code
as the fi le name e g. EMY5678 HI5001
leaseP do not save your document with any other details.
he fi le must remain inT MICROSOFT WORD format.
Please make sure you follow the submission instructions at the end of this paper.
Purpose:
his assessment consists ofT six (6) questions and is designed to assess your level of knowledge
of the key topics covered in this unit.

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S ASS SSMUPP E ENT | M ATE PL TE
Question 1 (7 marks)
ucy s ardware td collected its latest bank statement on ulyL ’ H L . 1 J 2022.
All entries appearing in the bank statement that had not been entered into the cash journals
were entered therein he cash journals were posted and the resulting balance of the Cash at. T
ank account in the ledger at une was Dr he balance shown on the bank statementB 30 J $55,311 . T
at une was Cr30 J $51,050 .
he following items recorded in the cash journals did not appear in the bank statementT .
1. A deposit made on une of30 J $6,883.
2. Cheques written during une that had not been presented for payment wereJ :
#1051 $976
#1053 $1,637
A cheque written for appeared incorrectly in the bank statement as$56 $65.
Required
repare the bank reconciliation statement at uneP 30 J 2022.
ANSWER: ** Answer box will enlarge as you type
Particular Amount
Balance as per the bank statement (Cr) 51050
Add: Cheque deposited but not collected by the bank 6883
Less: Cheques issued but not presented for payment
#1051
#1053
(976)
(1637)
Less: Error made by bank (9)
Balance as per the cash at bank account in the ledger 55311
Question 2 (10 marks)
rown rothers uses the allowance method to record bad debts e pense At the end of une theB B x . J ,
accountant conducted an ageing analysis of its accounts receivables t is estimated that for the. I ,
accounts receivables not due yet of them would be uncollectible for the receivables, 0.5% ;
overdue by month of them would be uncollectible for the receivables overdue by more than1 , 2% ;
months of them would be uncollectible2 , 5% .
Accounts receivable at une are f the total not yet due30 J 2022 $450,000. O $450,000, $300,000 ,

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overdue by month and overdue by more than months he Allowance for$110,000 1 , $45,000 2 . T
doubtful debts has a credit balance of before adjustment$3,800 .
Required
a( ) repare the ageing analysis for rown rothers to estimate its uncollectible debts marksP B B . (5 )
ANSWER a):
Due Category Account receivables
Total
Uncollectible
percentages
Total
Not yet Due 300000 0.5% 1500
Due by 1 month 110000 2% 2200
Due by 2 months 45000 5% 2250
Total estimated uncollectible 5950
b( ) repare the adjusting journal entry to record bad debts e pense for the year ended uneP x 30 J
marks2022. (2 )
ANSWER b):
he prior period balance appearing in would be subtracted from the current estimation made withT
regards to the allowance for doubtful debts and accordingly,
Allowance for doubtful debt = 5950 – 3800 = 2150
Adjusting journal entry for this event would be as follows:
ad debt e penseB x 2150
o Allowance for doubtful accountT 2150
eing estimated bad debts recorded(B )
c( )Show the relevant section of the balance sheet marks. (3 )
ANSWER c):
Assets
Current assets
Account receivables 450000
ess Allowance for doubtful accountL : (5930)
et Account ReceivablesN 444070
Question 3 (10 marks)

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he following information has been e tracted from the inventory records of Crafts ty td for theT x P L
month of May he fi rm uses the perpetual inventory system to record its inventory transactions. T .
gnore S and narrationI G T .
Date Transaction Quantity $ Unit cost
1/05 eginning balanceB 72 70
6/05 urchasesP 48 85
16/05 Sold unit@$200/ * 90 ?
17/05 urchasesP 70 65
28/05 Sales unit@ $200/ * 48 ?
30/05 Sales Return from the sale on 28/5 2 ?
ote is the sales price per unit*N : $200
Required
a) Create an inventory card and complete the inventory record to determine the cost of ending
inventory on hand at May and the cost of sales for the month of May assuming the31 , FIFO
Method. marks(7 )
ANSWER a):
Date Bought Sold Balance
Quantity Unit
cost
Amount Quantity Unit
Cost
Amount Quantity Unit
Cost
Amount
1/05
Beginning
balance
72 70 5040
6/05 48 85 4080 72 70
912048 85
16/05 72 70 5040 30 85 2550
18 85 1530
17/05 70 65 4550 30 85
710070 65
28/05 30 85 2550 52 65 3380
18 65 1170
30/05 2 65 130 2 65

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351052 65
10160 3510
Closing stock on hand at 31st May = 3510
Cost of sales = 10160
b) repare the income statement up to the gross profit for Crafts td for the month of MayP L . (3
marks)
ANSWER b):
Particulars Amount
Sales (200 * 138) 27600
Less: Sales return (2 * 200) -400
Total Sales 27200
Less: Cost of sales -10160
Gross Profit 17040
Question 4 (10 marks)
Mega Company purchased a truck for he company e pected the truck to be used to$150,000. T x
drive for years or miles with an estimated residual value of at the end of that10 100,000 , $5,000
ti
me During the fi rst two years the truck was driven miles in year and miles in. , 10,000 1 14,000
year 2.
Required
a) Calculate the depreciation for the second year under each of the methods below marks(6 )
I. Straight line-
II. nits of activityU - -
III. Diminishing balance at p a29% . .
ANSWER a):
i Straight line method Cost residual value useful life. = – /
Depreciation for the second year = (150000 – 5000) / 10 = 145000 / 10 / 12 = 1208.
ii nit of activity method Cost residual value otal estimated miles Miles drive in seond. U = [( – ) / T ] *
year
Depreciation for the second year = [(150000 – 5000) / 100000] * 14000 = 20300.
ii Diminishing balance p aI . @29% . .
Depreciation for the fi rst year = 150000 * 29% = 43500
ritten down value of truck in second yearW = 150000 – 43500 = 106500

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Depreciation for the second year = 106500 * 29% = 30885.
b) repare journal entries to record the depreciation e pense forP x the second year using straight-
line method marks(2 )
ANSWER b):
Depreciation A c dr/ 14500
o ruck accountT T 14500
eing depreciation provided on truck(B )
c) Show how the asset would appear in the balance sheet prepared at the end of the second
year if the straight line method was used marks- (2 )
ANSWER c):
Assets
on Current assetsN
ruckT 135500
Depreciation (14500) 121000
Question 5 (5 marks)
elow is the unadjusted trial balance of David Doors prepared by her accountant on uneB 30 J

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2022.
David Doors
Unadjusted Trial Balance
As at 30 June 2022
Account Debit ($) Credit ($)
Cash at bank 216,225
Accounts receivable 414,675
Allowance for doubtful debts 5,625
Prepaid advertising 47,000
Supplies 39,375
Equipment 418,950
Accumulated depreciation - equipment 51,300
Accounts payable 262,575
Unearned fees 58,050
D. Smith, Capital 359,775
Sales revenue 2,263,950
Rent expense 297,900
Salaries & wages expenses 1,518,750
Advertising expense 48,400
$ 3,001,275 $ 3,001,275
he following additional information is available at uneT 30 J .
1. he fi rm uses ageing method to estimate its doubtful debts each period As per ageingT .
analysis of the total accounts receivable are estimated as doubtful debts, 2% .
2. stimated annual depreciation on the equipment is of the cost of the assetE 10% .
3. Advertising costing was consumed during the year$21,000
4. he unearned revenue account includes received for revenue earned duringT $18,520
uneJ .
5. nused supplies on hand on une totalledU 30 J $4,050
Required
repare the adjusting entries at the end of the accounting period gnore narrationsP . I .
ANSWER:
i ad debt e pense. B x 2669
o Allowance for doubtful debtsT 2669

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of2% 414675 = 8294
Already e isting balance in allowance doubtful accountx = 5625
urther provided for this periodF = 8294 – 5625 = 2669.
ii Depreciation on equipment. 41895
o quipment accountT E 41895
418950 * 10% = 41895.
iii repaid Advertisement e pense. P x 27400
o Advertisement e penseT x 27400
Advertisment e pensex = 48400
ess Consumed during the yearL : = 21000
repaid advertisement e penseP x = 27400
iv nearned revenue account. U 18520
o Sales revenueT 18520
v Supplies e pense. x 35325
Supplies 35325
Question 6 (8 marks)
David ames founded Sydney Deliveries on uly he adjusted trial balance at uneJ 1 J 2019. T 30 J
the end of the fi nancial year is shown below2020 ( ) .
Sydney Deliveries
Adjusted Trial Balance
As at 30 June 2020
Account Debit ($) Credit ($)
Cash at bank 31,000
Accounts receivable 63,000
uel suppliesF 15,000
repaid advertisingP 7,500
Motor vehicle 90,000
Accumulated depreciation vehicle- 45,000

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Accounts payable 19,500
Salaries payable 7,600
nterest payableI 7,800
nearned revenueU 19,300
D ames Capital. J , 47,500
Drawings 36,000
Revenue 162,700
Salaries e pensex 35,100
nsurance e penseI x 2,700
nterest e penseI x 1,500
Depreciation e pensex 10,500
Supplies e pensex 5,100
Rent e pensex 12,000
$ 309,400 $ 309,400
Required
a) repare closing entries to be made on une marksP 30 J 2020. (4 )
ANSWER a):
Revenue account 162700
o income summary accountT 162700
ncome summary accountI 66900
o Salaries e penseT x 35100
o nsurance e penseT I x 2700
o nterest e penseT I x 1500
o Depreciation e penseT x 10500
o Supplies e penseT x 5100
o Rent e penseT x 12000
Retained earnings 95800
o income summaryT 95800
b) repare a post closing trial balance as at une marksP - 30 J 2020. (4 )

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ANSWER b):
Particulars Debit Credit
Cash at bank 31000
Accounts receivables 63000
Fuel supplies 15000
Prepaid advertising 7500
Motor vehicle 90000
Accumulated depreciation -
Vehicle
45000
Accounts payable 19500
Salaries payable 7600
Interest payable 7800
Unearned revenue 19300
D. James Capital 47500
Drawings 36000
Retained earnings 95800
Total 242500 242500
END OF SUPPLEMENTARY ASSESSMENT
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