ACCOUNTING FOR BUSINESS – ASSIGNMENT SP1 2015 PAGE ACCOUNTING FOR BUSINESS – ASSIGNMENT SP1 2015 ACCT 1008 Accounting for Business Assignment – Trimester 1, 2015 DUE DATE: 14TH May (Class 1) 15th May (Class 2 and 3) Student Name: Student ID Class Number 1._______________________________________________ ________________ ________ 2._______________________________________________ ________________ ________ All questions are to be completed in this template. QUES 1 QUES 2 QUES 3 TOTAL PLEASE DO NOT WRITE IN THESE BOXES – THESE ARE USED TO RECORD YOUR MARKS FOR EACH QUESTION Question 1 a. HARRY’S HARDWARE, END OF PERIOD WORKSHEET - YEAR ENDED 30 JUNE 2015 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Name Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Cash 6 000 Accounts Receivable 36 000 Inventory (1 July 2014) 43 000 Prepaid Rent 1 800 Warehouse Shelving 16 000 Acc’d Depreciation – Warehouse. 3 200 Point of Sale Equipment 4 000 Acc’d Depreciation – Equipment 2 000 Accounts Payable 32 250 H. Smith, Capital (1 July 2014) 58 000 H. Smith, Drawings 12 500 Sales 207 800 Sales Returns & Allowances 2 250 Discount Allowed 400 Purchases 140 200 Discount Received 900 Freight Inwards 2 150 Freight Outwards 1 200 Sales Staff Wages Expense 24 000 Local Government Rates Expense 800 Insurance Expense 3 500 Advertising Expense 3 750 Rent Expense 6 600 304 150 304 150 Profit/Loss Question 1 Part (b) Prepare a fully classified Income Statement for the period. Question 1 Part (c) Prepare a Statement of Changes in Equity for the period and a fully classified Balance Sheet as at the end of the period. Question 2: (Please type your answer to question 2 here) Question 3: YORK LTD Cash Flow Statement for the year ended 31 December 2015 Cash Flows from Operating Activities $ $ Receipts from customers Payments to suppliers & employees ______ Cash generated by operations Interest paid Income tax paid ______ _______ Cash Flows from Investing Activities Interest received Payment for Equipment ______ _______ Cash Flows from Financing Activities Proceeds from Share Issue Dividends paid ______ _______ Net increase / decrease in cash held Cash at the beginning of the year _______ Cash at the end of the year ___ ___ Question 3: (Students must show ALL calculations for question 3 or no marks will be awarded for this question) Calculations Question 3: Calculations .

1. ACCOUNTING FOR BUSINESS – ASSIGNMENT SP1 2015
PAGE
ACCOUNTING FOR BUSINESS – ASSIGNMENT SP1 2015
ACCT 1008 Accounting for Business
Assignment – Trimester 1, 2015
DUE DATE: 14TH May (Class 1) 15th May (Class 2 and 3)
Student Name:
Student ID
Class Number
1._______________________________________________
________________ ________
2._______________________________________________
________________ ________
All questions are to be completed in this template.
QUES 1
QUES 2
QUES 3

2. TOTAL
PLEASE DO NOT WRITE IN THESE BOXES – THESE ARE
USED TO RECORD YOUR MARKS FOR EACH QUESTION
Question 1 a.
HARRY’S HARDWARE, END OF PERIOD WORKSHEET -
YEAR ENDED 30 JUNE 2015
Unadjusted Trial Balance
Adjustments
Adjusted Trial Balance
Income Statement
Balance Sheet
Account Name
Dr
Cr
Dr
Cr
Dr
Cr
Dr
Cr
Dr
Cr
Cash
6 000

3. Accounts Receivable
36 000
Inventory (1 July 2014)
43 000
Prepaid Rent
1 800

4. Warehouse Shelving
16 000
Acc’d Depreciation – Warehouse.
3 200
Point of Sale Equipment
4 000

5. Acc’d Depreciation – Equipment
2 000
Accounts Payable
32 250
H. Smith, Capital (1 July 2014)
58 000
H. Smith, Drawings

6. 12 500
Sales
207 800
Sales Returns & Allowances
2 250
Discount Allowed
400

7. Purchases
140 200
Discount Received
900
Freight Inwards
2 150

8. Freight Outwards
1 200
Sales Staff Wages Expense
24 000
Local Government Rates Expense
800

9. Insurance Expense
3 500
Advertising Expense
3 750
Rent Expense
6 600

13. 304 150
304 150
Profit/Loss

14. Question 1 Part (b)
Prepare a fully classified Income Statement for the period.
Question 1 Part (c)
Prepare a Statement of Changes in Equity for the period and a
fully classified Balance Sheet as at the end of the period.
Question 2:
(Please type your answer to question 2 here)
Question 3:
YORK LTD
Cash Flow Statement
for the year ended 31 December 2015
Cash Flows from Operating Activities
$
$

15. Receipts from customers
Payments to suppliers & employees
______
Cash generated by operations
Interest paid
Income tax paid
______
_______
Cash Flows from Investing Activities
Interest received
Payment for Equipment
______
_______
Cash Flows from Financing Activities

16. Proceeds from Share Issue
Dividends paid
______
_______
Net increase / decrease in cash held
Cash at the beginning of the year
_______
Cash at the end of the year
___ ___
Question 3: (Students must show ALL calculations for question
3 or no marks will be awarded for this question)
Calculations

18. Question 3:
Calculations

19. Question 3:
Please type your answer to part B here.
Question 3:
Please type your answer to part C here.
I/we declare the following to be my/our work as understood by

20. the �EIBT Policy on Plagiarism, unless otherwise cited.
1. Signed: _______________________________ Date
____________________
2. Signed: _______________________________ Date
____________________
PAGE
9
1
ACCT 1008 Accounting for Business
Assignment – Trimester 1, 2015
DUE DATE: 14TH May (Class 1) 15th May (Class 2 and 3)

21. Student Name: Student ID Class Number
1._______________________________________________
________________ ________
2._______________________________________________
________________ ________
I/we declare the following to be my/our work as understood by
the
EIBT Policy on Plagiarism, unless otherwise cited.
1. Signed: _______________________________ Date
____________________
2. Signed: _______________________________ Date
____________________
2
QUESTION 1 - Financial Reporting

22. Harry’s Hardware is a hardware wholesaler owned and operated
by Harry Smith. The following trial balance
has been prepared at year’s end.
(continued.....)
HARRY’S HARDWARE - TRIAL BALANCE AS AT 30 JUNE
2015
Debit ($) Credit ($)
Cash 6 000
Accounts Receivable 36 000
Inventory (1 July 2014) 43 000
Prepaid Rent 1 800
Warehouse 16 000
Accumulated Depreciation – Warehouse. 3 200
Equipment 4 000
Acc’d Depreciation – Equipment 2 000
Accounts Payable 32 250
H Smith, Capital (1 July 2014) 58 000

23. H Smith, Drawings 12 500
Sales 207 800
Sales Returns & Allowances 2 250
Discount Allowed 400
Purchases 140 200
Discount Received 900
Freight Inwards 2 150
Freight Outwards 1 200
Sales Staff Wages Expense 24 000
Local Government Rates Expense 800
Insurance Expense 3 500
Advertising Expense 3 750
Rent Expense 6 600 . .
$304 150 $304 150
3

24. The following additional information is also provided:
(i) $300 of the recorded sales represent payments made by
customers in advance, for goods which will
not be delivered until August 2015.
(ii) It is estimated that 3% of the 30 June 2015 balance of
Accounts Receivable will be never be
collected from the customers.
(iii) Both the Warehouse and Equipment are expected to be used
evenly over their useful lives. The
expected total useful lives and residual values of both assets is
as follows:
Estimated Useful life Estimated Residual
Equipment 5 years -
Warehouse 10 years $1 000
(iv) The firm’s insurance costs $250 per month. The last
insurance payment made was for 3 months
commencing 1 June 2015.
(v) Sales staff wages owing but not paid as at balance day
equals $500.

25. (vi) The prepaid rent was paid on 30 June 2015 and was
shop rent for the three months ending 30
September 2015.
(vii) Upon receipt of the business’s bank statement, Harry
realised that the business had earned $100
interest on 30 June 2015. This amount was placed directly into
the bank account so the amount has
not yet been recorded by the business.
(viii) A physical stock take of inventory at 30 June 2015
revealed $46 250 on hand.
REQUIRED:
a. Complete the worksheet provided to prepare the above
information for assembly into financial
statements.
(20 marks)
b. Prepare a fully classified Income Statement for the period in
question.
(10 marks)
c. Prepare a Statement of Changes in Equity for the period and a
fully classified Balance Sheet in
narrative form as at the end of the period.
(10 marks)

26. TOTAL FOR QUESTION 1: 40 Marks
4
QUESTION 2 - Accounting Concepts
YOU ARE REQUIRED TO ANSWER ANY THREE OF THE
FOLLOWING FOUR QUESTIONS.
CHOOSE ANY THREE OF QUESTIONS a., b. c. or d.
WRITE BETWEEN 250 AND 300 WORDS FOR EACH
ANSWER.
Question 2 A
Kathy owns a small supermarket. At the start of this year the
business purchased new equipment for $24,000.
The equipment is expected it to have a useful life of 8 years. It
is expected to have no re-sale value after 8
years.
Kathy is doing her own bookkeeping and at the end of the year
she has recorded the whole of the $24,000 as
an expense.
Required:
i. Referring to the going concern assumption and the definitions
for asset and expense, explain to
Kathy why it is incorrect to expense all of the equipment in the

27. first year as her records suggest.
(4 marks)
ii. Explain to Kathy the term “depreciation” as it is used in
accounting, and why we use it in
accounting.
(4 marks)
iii. Assume that after your advice, Kathy amended her
bookkeeping and depreciated her asset on a
straight-line basis. At the end of 2 years her business’s
Statement of Financial Position reveals the
following:
Refrigeration Equipment $24 000
Accumulated Depreciation $ 6 000
Written Down Value $18 000
Kathy thinks that “written down value” means the same as
“selling (market) value”. Explain to
Kathy why written down value is not the same as the selling
value (explain what each value means).
Also, explain to Kathy what the measurement problem is in
accounting.
(4 marks)

28. TOTAL FOR QUESTION 2: 12 marks
5
QUESTION 3 - Statement of Cash Flows
You are provided with the following financial information for
York Ltd:
(continued .........)
YORK LTD
COMPARATIVE BALANCE SHEETS
AS AT DECEMBER 31
2015 2014
Current Assets
Cash on Hand $1 500 $4 000
Cash at Bank - 1 200
Accounts Receivable (net) 5 200 4 500

29. Inventory 20 000 18 000
Prepaid Expenses 1 650 $28 350 800 $28 500
Non Current Assets
Plant & Equipment 74 000 64 000
less Acc. Depreciation (23 000) 51 000 (17 600) 46 400
Total Assets 79 350 74 900
Current Liabilities
Bank Overdraft 5 660 -
Accounts Payable 4 000 3 800
Expenses Payable 780 790
Tax Payable 720 11 160 1 200 5 790
Non Current Liabilities
Bank Loan 20 000 20 000
Total Liabilities 31 160 25 790
Net Assets $48 190 $49 110
Equity
Share Capital 30 000 26 000

30. Retained Earnings 18 190 23 110
$48 190 $49 110
6
REQUIRED:
a. Prepare a Statement of Cash Flows in the format required by
applicable accounting standard. Use the
pro forma in the exam answer booklet and show all calculations.
[15 marks]
b. The owners of York Limited cannot understand why there is
such a difference between the profit for
the period and the total cash flows showing in the cash flow
statement. Briefly explain some of the
factors causing this difference.
[4 marks]
c. What information is provided by a Statement of Cash Flow
which is not provided by the other General
Purpose Financial Reports (Income Statement, Statement of

31. Changes in Equity & Balance Sheet)?
[4 marks]
TOTAL FOR QUESTION 3: 23 Marks
YORK LTD
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31 2015
Net Sales $93 000
Cost of Sales 54 200
Gross Profit: 38 800
Other Revenue:
Discount Received $400
Interest Revenue 60 460
39 260
Expenses:
Selling & Admin Expense 19 000
Doubtful Debts Expense 200
Depreciation Expense 5 400

32. Interest Expense 2 400 27 000
Profit before tax 12 260
Income tax expense 3 378
Profit $8 882