2013S2 questions-and-answers- - lOMoARcPSD Exam 2013...

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Exam 2013, Questions and answers - S2 Accounting and Financial Management 1A (University of New South Wales) Distributing prohibited | Downloaded by Ye Liu ([email protected]) lOMoARcPSD
ACCT1501 Practice Exam Questions & Solutions 2013S2 QUESTION 1 ACCOUNTS RECEIVABLES (10 marks) On 1 st January 2013, 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, 2013, one of SSS’s customers, BBB, went bankrupt. BBB owes SSS $2,500 and there is no hope for recovering this amount. On 1 st October 2013, SSS collected $85,000 from outstanding accounts. SSS Ltd’s financial year ends on 31 st December. During the year to 31 December 2013, SSS sold goods for cash for $22,000, and on credit for $80,000. Required: Part A (i) If bad debts expense for 2013 is recognised based on 2% of credit sales, prepare the entry to record bad debts expense. (3 marks) lOMoARcPSD
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3 marks: 1 mark for each account name, 1 mark for amount (ii) Calculate the net accounts receivable after recognising the bad debts expense. (3 marks) ADD
ACCT1501 Practice Exam Questions & Solutions 2013S2 Allowance for Doubtful Debts 1-Jul-13 A/R 2,500 1-Jan-13 o/b 4,500 31-Dec-13 c/b 3,600 31-Dec-13 BDE 1,600 6,100 6,100 1-Jan-14 o/b 3600 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 31 st December to record bad debts expense (i.e., ignore your answer to Part A, 3 marks). lOMoARcPSD
3 marks: 1 mark for each account name, 1 mark for amount (ii) Calculate the net accounts receivable after the adjusting entry. (1 mark) 4,500 1,200
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ACCT1501 Practice Exam Questions & Solutions 2013S2 3

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