8613_2013S1 PracExamQuestions & Answers(1) - ACCT1501...

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Thinkswap DocumentACCT1501 Practice Exam Questions & Solutions 2013S1 1 QUESTION 1 ACCOUNTS RECEIVABLES (10 marks) On 1stJanuary 2007, SSS Ltd. has a debit balance of $30,000 in Accounts Receivable and a credit balance of $ 4,500 in the Allowance for Doubtful Debts. On 1st July, 2007, one of SSS’s customers, BBB, went bankrupt. BBB owes SSS $2,500 and there is no hope for recovering this amount. On 1stOctober 2007, SSS collected $85,000 from outstanding accounts. SSS Ltd’s financial year ends on 31stDecember. During the year to 31 December 2007, SSS sold goods for cash for $22,000, and on credit for $80,000. Required: Part A (i)If bad debts expense for 2007 is recognised based on 2% of credit sales, prepare the entry to record bad debts expense.
3 marks: 1 mark for each account name, 1 mark for amount
(ii) Calculate the net accounts receivable after recognising the bad debts expense.
ADD
2
4,500
1,600
Part B (i)Assume bad debts expense is determined as an adjusting entry at year end. If uncollectible accounts are estimated to be $3,200 from aging receivables, prepare the adjusting entry on the 31stDecember to record bad debts expense.
3 marks: 1 mark for each account name, 1 mark for amount
(ii) Calculate the net accounts receivable after the adjusting entry.
4,500
1,200
ACCT1501 Practice Exam Questions & Solutions 2013S1 3 QUESTION 2 Inventory (12 Marks) The following information is taken from the accounting records of Eden Ltd for the year ended 31 December 2010. Units Purchase price/unit Selling price/unit Jan 1 Inventory 2,000 Mar 10 Purchases 2,200 Jun 25 Sales 1,800 Aug 30 Purchases 1,800 Oct 5 Sales 2,500 Nov 26 Purchases 3,000 Dec 31 Sales 2,000 Assume Eden uses the first-in-first-out method of allocating cost to inventories. Determine the cost of ending inventory as at 31 December 2010 and the cost of goods sold and gross profit for the year ended 31 December 2010, assuming: a)Perpetual Inventory System [6 marks$56 $55 $60 $52 $65 $50 $63 ]
Thinkswap DocumentACCT1501 Practice Exam Questions & Solutions 2013S1 4 b)Periodic Inventory System [6marks] Opening inventory = 2,000*56 = 112,000 Purchases = 2,200*55 + 1,800*52 + 3,000*50 =364,600 Closing Inventory = 2,700*50 = 135,000 COGS = Opening inventory + Purchases – Closing inventory = 112,000 + 364,600 – 135,000 = 341,600

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