ACC1101 Assignment Semester 3 2019

QUESTION ONE (Topic 1) Question one requires you to Chapter 1 of the text, and the Employability presentation/powerpoints in Topic 1, in order to respond to an article by Lesley Meall, in the 18th edition of ACCA and Chartered Accountant ANZ’s publication Accountancy Futures. Ref: Meall, L 2019, ‘Science reality’, Accountancy Futures, vol. 18, viewed 9 December 2019, The article is available via the following links to the ACCA website: Web link to publication: https://www.accaglobal.com/an/en/professional-insights/accountancy-futures-magazine.html Pdf of publication: https://www.accaglobal.com/content/dam/ACCA_Global/Members/acca-caanz/AF18-Interactive125.pdf

QUESTION TWO (Topic 2a) 22 marks (IGNORE GST) Mary Motors is a small business selling electric motors which sell for $26 each. The basic motors are purchased in North Korea for $3 each and imported to Australia at a cost of $0.50 per unit. An additional part is added for $0.20 and the motors checked. Direct labour costs $30 per hour and each motor requires three minutes of labour. There is also a site foreman paid $60,300 per year and additional fixed overheads of $64,500 per annum. Currently the business sells 10,000 motors per annum.

QUESTION THREE (Topic 2b) (Total 12 marks) Mighty 5 Hardware expects the following sales in units in the last quarter (Oct-Dec) of 2019: Oct 36,000; Nov 45,000; Dec 50,000 and 40,000 for January 2020. The business has inventory of 35,000 finished units on hand at 1st October and has a target finished inventory of 30% of the following month’s sales units. The units are purchased for $5 and sold for $15 each. Payment for purchases is made in the month following purchase. Accounts payable for purchases as at 30 September 2019 was $100,000.

\QUESTION FOUR (Topics 3a and 3b) 23 Marks On 1st January 2019 David Bellamy started trading as Bellamy Real Estate, and completed the following transactions regarding the in the first month: a) Jan 1: David Bellamy transferred cash from his personal bank account to the business bank account in order to start operations, $30,000 and also transferred a vehicle worth $14,000 to the business. b) Jan 4: The business paid six month’s rent for office space, $7,920 c) Jan 5: The business purchased office equipment, $5,500 d) Jan 6: Purchased supplies on account, $220 e) Jan 14: Earned first sales commission and received cash, $6,600 f) Jan 18: Paid motor vehicle expenses, $88 g) Jan 20: David Bellamy withdrew $110 from the business bank account for personal use h) Jan 25: Earned sales commission and sent the client an invoice which will be paid in February, $13,530 i) Jan 28: Paid for the supplies purchased on January 5th

QUESTION FIVE (Topic 4) 10 Marks You have recently begun employment as the management accountant of a small sole trader – Len’s Mower Store. The owner is keen to improve the internal control systems of the business and has asked you to prepare a bank reconciliation statement for December 2019. The business currently has a manual accounting system. Below are provided extracts from their cash receipts book, cash payments book, and the general ledger account for ‘Cash at Bank’. They have just received their bank statement for December 2019, but have made no alterations to their accounting records as a result of receiving the bank statement. The owner has realised that he wrote an incorrect amount in the cash payments journal for cheque number 603, which was a payment for mower parts for $600 not $800 as he has written. The figure on the bank statement is correct.