Exam Sem 1 SOLUTIONS. 2016.docx - SOLUTIONS THE UNIVERSITY...

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SOLUTIONSTHE UNIVERSITY OF MELBOURNEDEPARTMENT OF ACCOUNTINGACCT10002: INTRODUCTORY FINANCIAL ACCOUNTNGFinal Examination – Semester 1 2016QUESTION ONE15 MARKSQUESTIONANSWER1A2B
1 mark for each correct answer(15 x 1 = 15 marks)1
QUESTION TWO 7 MARKSJournal entries to record the May transactions2 MayInventory 16 500GST Paid1 650Account Payable18 1505 MaySupplies70GST Paid7Cash778 MayAccount Receivable9 240GST Collected840Sales 8 400Cost of Sales*5 040Inventory*5 04014 MayCash9 055Discount Allowed168GST Collected17Account Receivable9 24015 MayAccount Payable2 640Inventory2 400GST Paid24020 MayCash12 000Share Capital12 00023 MayElectricity Expense2 000GST Paid 200Cash2 2001 mark for each fully completed journal entry(ies) for each date. Avoid half marks where possible.* need to divide sale price $9,240 by 11 = GST $840Cost of product sold = $8,400 x 60% = COS $5,040Suggest minus ½ markTotal Question 2: 7 x 1 = 7 marks2
QUESTION 3(a)Rachel’s Hair Accessories Pty LtdThe lower of cost and net realisable value is: $67,100Must have correct answer for 1 mark(1 mark)(b) Why is it important to account for inventory using the lower of cost or net realisable valuebasis?
1 mark4 marks
3
QUESTION 4(a)SAC 1 (paras 20-22) contains the following guidance to identify the existence of dependent users:The greater the extent any of the following characteristics of the entity are observable,the greater the likelihood of dependent users existing:separation of management from economic interesteconomic or political importance/ influence of entitysignificant financial characteristics of entity.1 mark each for any two of the features(2 marks)Note: some may have interpreted the question as users relying on information to make investment decision; to value the investments etc…. if so, then 1 mark.

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