Technology and Accounting Processes: BUS285 Take Home Exam Solution

This document presents a comprehensive solution to the BUS285 Technology and Accounting Processes take-home exam from 2020. The solution includes detailed answers to five questions, covering a range of accounting topics. Question 3 provides a net cash flow statement from operating activities, while Question 4 delves into bad debts, including journal entries and calculations for net accounts receivable. Question 5 presents journal entries for various transactions, such as repairs, machinery revaluation, and depreciation. The document provides complete accounting solutions to the exam questions, including tables and calculations, offering a valuable resource for accounting students seeking to understand and solve complex accounting problems.

Running head: TECHNOLOGY AND ACCOUNTING PROCESSES
Technology and Accounting Processes
Name of the Student
Name of the University
Author Note

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TECHNOLOGY AND ACCOUNTING PROCESSES
Table of Contents
Answer to Question 3...................................................................................................................2
Answer to Question 4...................................................................................................................2
References....................................................................................................................................3

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TECHNOLOGY AND ACCOUNTING PROCESSES
Answer to Question 2
Particulars
Amoun
t
Amoun
t
Net Operating Profit 54000
Additions to Profit
Depreciation 16000
Decrease in Accounts Receivable 7000
Decrease in Accounts Payable -13000
Loss on Sale of Equipment 41000
Decrease in Prepaid Rent 2000
Decrease in Inventory 7000
Decrease in Accrued Wages 5000
Net Cash Flow from Operating
Activities 119000
Cash Flow From Investing Activities
Sale of Equipment 10000
Purchase of Land -10000
Investments -30000
-30000
Cash Flow from Financing Activities
Issue of Debentures 26000
Share Capital 80000
Net Cash flow during the year 69000
Opening Cash and Cash Balance 131000
Closing Cash and Bank Balance 200000
b) The carrying amount of the equipment should be adjusted in the final balance sheet prepared
by the entity. This is essential because it allows the business to show a true reflection of its
annual financial statements and its performance during the year. Not making the adjustment will
also negatively affect the financial statements of the entity in the future.
Answer to Question 4
1a) Date Account Debit Credit

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TECHNOLOGY AND ACCOUNTING PROCESSES
30.6.2019 Bad Debts Expense
Account
4022
Relevant Debtors 4022
1b) Details Amount
Sales 552000
Less: Sales Returns and
Allowances
37900
Net Sales 514100
Cash Collected 319120
Accounts Receivable 194980
Less: Bad Debts written off 4022
Net Accounts Receivable 190958
2a) Date Account Debit Credit
30.6.2019 Bad Debts Expense 7786
Allowance for Bad Debts 7786
2b) Allowance for Doubtful Debts Account
Date Account Debit Credit
30.6.201
9
Bad Debts Expense 7786

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TECHNOLOGY AND ACCOUNTING PROCESSES
7786
2c) Accounts Receivable
Accounts Receivable 194980
Less: Allowance for Doubtful
Debts
7786
Accounts Receivable, Net 187194
3a) Date Particulars Debit Credit
Bad Debts Expense 7675
Allowance for Doubtful Debts 7675
3b) Accounts Receivable 194980
Less: Allowance for Doubtful
Debts
10320
Net Accounts Receivable 184660
c) i. A reduction in the balance of a customer’s account results in the writing off of the GSt from
the Customer’s account as well. Any payment which is made by the business is returned back to
the business by the authorities.
ii. In case of using the allowance method, any increase in the bad debts is also charged to the
allowance for bad debts. If they are to be written off permanently, then there would be a

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TECHNOLOGY AND ACCOUNTING PROCESSES
reduction in the amount of allowance for accounts receivable and the bad debts by the amount of
GST charged separately.
Answer to Question 5
Date Particulars Amoun
t
Amount
30.6.2019 Cash 7420
Repairs and
Expenses
7420
30.6.2019 Machinery a/c 7420
Cash 7420
30.6.2019 Building 20000
Revaluation 20000
Revaluation 5000
Building 5000
30.6.2019 Cash 12600
Truck 12600

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TECHNOLOGY AND ACCOUNTING PROCESSES
Truck a/c 12600
Lease on Truck 12600
Date Particulars Amoun
t
Amount
30.6.2019 Depreciation 13284
Machinery 13284
30.6.2019 Depreciation 12000
Building 12000
30.6.2019 Depreciation 8200
Truck 8200
30.6.2019 Lease 12600
Cash 12600