2018 Senior External Examination Subject notice 2

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Miranda Clark
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1 Prepared task Candidates are to complete a prepared task during the year and take their prepared task material into the examination room for use in responding to Paper Two Part A (Question 2) and Part B (Question 3). The prepared task material will be collected by the supervisor at the end of the examination. It will not be assessed by markers. This year s prepared task will be based on the following topics: Analysis and interpretation of financial reports package. The prepared task requirements are on the following pages. Information about the Analysis and interpretation of financial reports and package topics is on pages of the Senior External Syllabus Enquiries Telephone (07) or externalexams@qcaa.qld.edu.au

2 Analysis and interpretation of financial reports Nelson Software has given you the following accounting data. Using a spreadsheet program, enter this data into an input statement, present reports and calculate profitability, financial stability and management effectiveness ratios $ 2017 $ 2016 $ Revenue Cash Sales Credit Sales Expenses Cost of Goods Sold Total Selling and Distribution Expenses Total General and Administrative Expenses Total Finance Expenses Interest Expense Current Assets Cash at Bank Accounts Receivable Inventories Non-Current Assets Property, Plant and Equipment Motor Vehicle Land and Buildings Current Liabilities Accounts Payable Bank Overdraft Non-Current Liabilities Mortgage Owner s Equity Capital Drawings Total Assets Page 2 of 7

3 You are required to: 1. Use a spreadsheet and enter the data into an input sheet. 2. Prepare the Income Statement and Balance Sheet for the 2017 and 2018 financial years. These reports should include a column for the dollar value increase or decrease and the percentage increase or decrease. 3. Calculate the following ratios to two decimal places for 2017 and 2018: Gross profit ratio Net profit ratio Return on owner s equity Return on total assets Current ratio Quick ratio Equity ratio Debt ratio Turnover of inventories (days) Turnover of accounts receivable (days) Ratio of costs of goods sold to sales Ratio of selling and distribution expenses to sales Ratio of general and administrative expenses to sales Ratio of finance expenses to sales Ratio of total expenses to sales. Show the names of the ratios, formulas, working and the final results for each ratio. 4. Save your workbook as 2018 Ratio figures. Ensure row and column headings are showing and include your candidate number in the footer on each sheet. 5. Print the input sheet, Income Statement, Balance Sheet and ratios with figures presented. Ensure the report area is on an appropriate page/s. 6. Print all sheets with formulas showing. Page 3 of 7

4 package You work in a shoe store operating under the name Shooz R Us (Candidate number). The details are as follows: business location 92 Smithfield Street, Gympie, Queensland 4570 phone (07) ABN Using an accounting software package, you are required to establish the financial records from 1 June 2018 for this business and record its transactions. This business is registered for GST and transactions include GST where this tax is applicable. 1. Use a chart of accounts for a retail shoe store and create or edit the accounts where necessary to include the following accounts: Cash at Bank, Inventory, Accounts Receivable, Accounts Payable, Capital, Drawings, Accrued Expense, Prepaid Expense, Fixtures and Fittings at Cost, Fixtures and Fittings Accum Dep and Insurance. 2. Enter the following balances, customers, suppliers and inventory details as at 1 June 2018: Balance $ Cash at Bank Accounts Receivable Inventory Fixtures and Fittings at Cost Fixtures and Fittings Accum Dep Office Equipment at Cost Office Equipment Accum Dep Accounts Payable Bank Loan Customer name Address Contact Balance $ Shoe Glam Kim Scooba Elke s Dance Academy 10 Mary Street Gympie Qld Wright Road Gympie Qld Carlton Road Gympie Qld 4570 Robyn Hall Elke Dunstan Page 4 of 7

5 Supplier name Address Contact Balance $ Feet Beat ABN Shoez Galore ABN Waylon Drive Brisbane Qld Samford Street Brisbane Qld 4000 Lauren Karrasch Angus Drury Inventory item Inventory no. No. on hand Buying price $ incl. GST Selling price $ incl. GST Sandals Sa $ Work boots Wo $ Ballet flats Ba $ Thongs Th $ Enter the following transactions: Date Transaction June 1 Withdrew $250 to establish a petty cash fund 4 Received payment in full from Shoe Glam 5 Owner withdrew $500 for personal use 6 Purchased 100 pairs of sneakers, inventory number Sn, from Feet Beat for $18, selling price $ Cash sales: 2 pairs of thongs, 3 pairs of sandals and 1 pair of work boots 8 Returned 5 pairs of sneakers to Feet Beat due to faulty manufacture 11 Bought 40 pairs of ballet flats and 40 pairs of work boots from Shoez Galore 12 Paid wages, $ Sold 30 pairs of ballet flats to Elke s Dance Academy 14 Paid Feet Beat $ Paid insurance, $945 by cheque to Ace Insurance 16 Bought stationery items from petty cash, $ Received notification from Ace Insurance that the cheque sent on 15 June was not signed. Reversed this cheque and issued another 18 Paid advertising, $ Bought new office equipment for $750 cash 20 Paid $2 000 off the bank loan 21 Received $75 cheque from Kim Scooba. She advised she is bankrupt and the remaining balance of her account is to be written off (GST applies) Page 5 of 7

6 Date Transaction 22 Sold 25 pairs of sneakers to Shoe Glam 23 Paid rent, $ Shoe Glam returned 2 pairs of sneakers that they purchased on 22 June 26 Paid wages, $ Paid full amount owing to Shoez Galore 28 Owner deposited $2 000 into the firm s bank account 29 Cash sales: 5 pairs of work boots and 3 pairs of sandals 30 One pair of sandals sold for cash on 29 June was returned as defective. Refund the customer Wages owing, $360 Rent paid in advance, $1 500 Wrote off depreciation on office equipment using straight line method at 10% new office equipment not to be depreciated until the next financial year Wrote off depreciation on fixtures and fittings 15% diminishing balance Page 6 of 7

7 4. Use the following Bank Statement details to reconcile the Cash at Bank account. Print the reconciliation report in detail at the end of this process. Shooz R Us Bank Statement as at 30 June 2018 Date Particulars Debit Credit Balance 2018 ($) ($) ($) June 1 Balance CR 1 Cheque CR 4 Deposit CR 5 Cheque CR 7 Deposit CR 12 Cheque CR 19 Cheque CR 20 Cheque CR 20 Cheque CR 21 Direct deposit: Elke s Dance Academy CR 22 Deposit CR 26 Cheque CR 27 Account keeping fee CR 28 Cheque CR 30 Interest CR You are required to: 5. Print the following: all journal transactions Profit and Loss Statement Balance Sheet Inventories list/items list Card File Details/Customer and Supplier lists. Page 7 of 7

Accounting Senior External Examination. Paper Two Response book. Directions. Candidate use. After the examination session. Supervisor use only

Accounting Senior External Examination. Paper Two Response book. Directions. Candidate use. After the examination session. Supervisor use only 2018 Senior External Examination Accounting Paper Two Response book Wednesday 7 November 2018 1:15 pm to 4:25 pm Directions Do not write in this book during perusal time. You must: correct any errors appropriately