UBSS_BAP11_Assignment 1_Semester_3

20072006

assets

cash30,000.00$ 13,000.00$

Accounts recievable18,000.00$ 14,000.00$

Inventory34,000.00$ 35,000.00$

Cruise boats70,000.00$ 78,000.00$

less accumulated ndepreciation30,000.00-$ 40,000.00$ 24,000.00-$ 54,000.00$

Total122,000.00$ 116,000.00$

Liabilities and Shareholders Equity

Accounts payable29,000.00$ 33,000.00$

Income Tax Payable15,000.00$ 20,000.00$

Debentures payable15,000.00$ 10,000.00$

Share Capital 30,000.00$ 25,000.00$

Retained Earnings33,000.00$ 28,000.00$

122,000.00$ 116,000.00$

Income Statement

Sales250,000.00$

Cost of Goods sold180,000.00$

Gross Profit70,000.00$

Selling expenses28,000.00$

Administrative expenses16,000.00$ 44,000.00$

Interest Expense2,000.00$

profit before income tax24,000.00$

income tax expense7,000.00$

profit before income tax17,000.00$

Dividends of $12,000 mwere declared and paid

During the year a boat was sold for $10,000 cash

This boat originally cost $15,000 and had a carrying value at the time of sale of $10,000 at the time of sale

All depreciation expense, $11,000, is in nthe selling expense category

All sales and purchases are on account

Additional Cruise motors were purchased for $7,000 cash. The motors are reported as part of the asset Cruise Boat

Accounts payable pertains to inventory creditors

All operating expensesexcept depreciation are paid in cash

Principles of Accounting

BAP 11

Assignment 1 2013

Semester 3

Class Day/Time: ________________

Due Date: Week 6 Friday 17th January 2014

Time: 5 PM

Total marks for all questions 75

Weight: 25%

This is an individual assignment. The assignment consists of 6 questions all of which are to be attempted. Please submit into Moodle directly, by the due date. Late submissions will attract a penalty of 5% for each day it is late.

This assignment must be your own work and submitted with an assignment cover sheet.

Question 1. 25 marks

The following questions are required to be answered relate to the course text

Questions

a) Statement of Cash flows direct method Chapter 18 ;

Required

i. Prepare a cash flow statement using the direct method for operating cash flows

ii. Prepare a reconciliation of the [profit and cash provided by the operations

b) Bank reconciliation 5 marks

General Ledger AccountCash At Bank

1/03/2001Balance3,600.00$ 1/03/2001chq no. 213250.00$

2/03/2001800.00$ 2/03/2001chq no. 2143,200.00$

3/03/20011,800.00$ 3/03/2001chq no. 215975.00$

14/03/20013,000.00$ 6/03/2001chq no. 216800.00$

25/03/20012,000.00$ 25/03/2001chq no. 217863.00$

26/03/2001525.00$ 26/03/2001chq no. 218500.00$

27/03/20012,400.00$

14,125.00$ 6,588.00$

Balance brought forwars 31 March

7,537.00$

Bank Statement for 31 March

for Luke Ltd

Beginning balance4,200.00$ cr

Deposits

1/03/2001800.00$

2/03/20011,800.00$

26/03/2001525.00$

14/03/20013,000.00$

6,125.00$ cr

Cheques

1/03/2001213280.00$

2/03/20012143,200.00$

3/03/2001215975.00$

6/03/2001216863.00$ 5,318.00-$ dr

Other items

Bank Charges35.00-$

Eft monthly rent1,200.00-$

interest on account45.00$ 1,190.00-$ dr

Closing Balance 31 March3,817.00$ cr

Other information

Cheque number 213 was incorrectly posted to the general ledger

The bank reconcilition for February showed an unpresented cheque no. 210 for 600.00$

Required prepare a bank reconciliation for the Month ended the 31 March 2001

c) Accounting for Shares 10 marks

Demons Ltd issued a prospectus for the issue of 100,000 $5.00 shares on 1 January2012.The prospectus required payment of $3.00 per share on application and $2.00 to be paid when called.

The company received applications for 120,000 shares by the closing date of 28February 2012.100,000 shares were issued on 1 March 2012 with excess application money being refunded.

On 30 April 2012 the company called the balance of $2.00 on the shares. All call money was received by 15 May 2012.On 30 June 2012 Demons Ltd declared and paid a dividend of 5 cents per share.

Required:

Prepare the journal entries for the year ended 30 June 2012 to account for the above transactions.

d) Accounting for Liabilities 5 Marks

Easy Company Ltd issues a debenture at a premium for a period of 10 years the company pays interest on 31 December and 1 July. The debenture has a par value of $1,000,000.00 and is issued at premium of 105 at an interest rate of 9%

Prepare journal entries to reflect the following;

i. issue of debentures on 1-July

ii. payment of interest on 1 January

iii. accrual on 31 March

e) Accounting for Inventory 10 marks

During 2090 Jones Ltd undertook the following purchases of stock;

unitsunit price

Goods in stock at beginning of the year4001.00$

purchases qtr 15001.10$

purchases qtr 24001.20$

purchases qtr 34001.25$

purchases qtr 43001.40$

Sales were18002,400.00$

Required

a)Calculate the inventory on a first in fist out method FIFO

a)Calculate the inventory on a last in fist out method LIFO

a)Calculate the inventory using a weighted average method

a)calcuaulate the gross margin in all cases

f) Analysis of Accounting Information 10 Marks

Selected company data is provided of two companys which are competitors in the same market is provided below

A Co LtdB Co Ltd

Income Statement data

Net Sales40,000$ 82,000$

Cost of Goods Sold32,000-$ 65,000-$

Selling and Administrative Expenses7,200-$ 13,000-$

Interest Expense600-$ 1,000-$

Gain on Sale of Equipment800$ 200$

Income Tax Expense300-$ 1,200-$

net Profit700$ 2,000$

Balance Sheet

current Assets11,000$ 11,000$

Property Plant and Equipment9,000$ 17,481$

Total Assets20,000$ 28,481$

Current Liabilities5,500$ 9,000$

Non Current Liabilities8,200$ 11,000$

Total Shareholders Equity6,300$ 8,481$

20,000$ 28,481$

Beginning of Year Balances

total Assets17,504$ 26,441$

Total shareholders Equity6,093$ 10,753$

Other Data

Average Net Receivables5,500$ 2,200$

Average Inventory5,000$ 8,000$

Net Cash provided by operating Activities1,000$ 2,500$

Required for each entity calculate

a)

1. current Ratio

2. Receivables Turnover

3. Average Collection period

4. Inventory Turnover

5. Average Days in Inventory

6. Profit Margin ratio

7. Gross Profit margin

8. return on Assets

b) compare the profitability , Liquidity and solvency of the two entities

g) Preparation of production and cash budget 10 marks

	Budget data
		unit sales
	January	25,000.00
	February	30,000.00
	March	32,000.00
	selling price		$ 10.00	per unit
	cash sales			20%	during month of sale
	Collections on account		50%	in month of sale
	Collections on account		25%	after month of sale
	Amount uncollectable		5%
	balance on accounts receivable at 1 January			$ 420,000.00
	Of which $350,000 relates to December sales and the remainder related to November sales
	5% of the total balance is uncollectable
1	prepare sales budget for the quarter
2	prepare cash collections budget for the quarter
3	Calculate the balance in accounts receivable at the end of March