Examination for the Bachelor s Degree name: exam in module: Accounting I nationality: 1st examiner: grade: 1st examiner: Berkau / Rosenberg sign.: matriculation number: 2nd examiner: grade: date: January 13th, 2005 sign: time prescribed: 120 min valuation examination aids: calculatior, np. marks from: 90 I herewith apply for publication of my examination result under my matriculation number signature: General examination instructions Pls., enroll into the list distributed Check your examination for completeness. You got tasks C1 to D6 on pages 2 to 8. After completing the exam pls. submit all examination papers including exercise sheets and drafts, if any. Pls., also do in case of prematurely breaking off examination. Pls., follow the instructions given by the supervisor regarding 13 of the final examination regulations for study programs leading to a bachelor s degree (withdrawal, deception, violation of rules). The use of mobile phones is not allowed. Answer in English only. Pls., use for C-tasks and D-tasks separate stacks of paper! total of the trial balance: Net profit: Total of the balance sheet C1: C2: C2:
Examination Accounting I FH Osnabrück, page 2 The examination includes tasks for 120 marks. You only need to give answers for 90 marks. (Possibility to select). For passing this examination you have to reach 45 marks for minimum. Good Luck! task C1 (22 marks) You are involved in a production firm HARDWARE assembling computers. Each computer consists of a enclosure, a power supply, a motherboard, a disc drive, a CD drive and a hard disk. Additionally you are selling screens and keyboards. You start business with the following entry: DR Cash at bank 50.000 EUR CR Capital 50.000 EUR. (1) Draw up an opening balance sheet for the HARDWARE company. (5 points) (2) Purchase the following amounts of materials. There is no need to distinguish between different suppliers. 200 enclosures for 24 EUR each, 50 power supplies for 15 EUR each 300 motherboards for 87 EUR each 100 disc drives for 27 EUR each 35 CD drives for 12 EUR each 50 hard discs for 34 EUR each 50 screens for 200 EUR each 200 keyboard for 9 EUR each. For the motherboards you get a discount of 5%. (Discount received) You also have to consider a VAT rate of 16 %. The prices given above include VAT already. (3) You sell in the accounting period 29 computers for 1.200 EUR (including VAT). Make entries for selling computers. (4) Balance off all accounts and draw up a trial balance.
Examination Accounting I FH Osnabrück, page 3 Task C2 (25 marks) The trial balance for HOMEPAGE company is given: Account total of debit entries total of credit entries Sales 14.450,00 Purchases 36.771,00 Returns inwards 2.100,00 Returns outwards 1.655,00 Building rent account 500,00 Motor expenses 340,00 Postage account 50,00 Energy account 249,00 Insurance account 132,00 Office equipment 36.415,00 Motor vehicles 14.000,00 Debtors 1.650,00 Creditors 34.751,00 Commission received 1.500,00 Fees 128,00 Loans 40.000,00 Bank 57.448,00 Cash 8.829,00 Drawings 300,00 Capital 63.000,00 Total 157.134,00 157.134,00 Pls., draw up a balance sheet and an income statement (or profit and loss account). You have to consider a closing stock of 27.192,50 EUR.
Examination Accounting I FH Osnabrück, page 4 Task D3 (21 marks) (a) You are required to prepare your bank reconciliation statement as at 30 June 2005 and your settlementary cash book as of the same date. Cash book for June 2005: Balance 34.920,00 Cheque No 2004 1.720,00 Deposit 5.380,00 Cheque No 2005 33.660,00 Deposit 12.940,00 Cheque No 2006 15.180,00 Deposit 2.300,00 Cheque No 2007 32.500,00 Deposit 40.200,00 Cheque No 2008 18.590,00 Deposit 11.150,00 Cheque No 2009 110,00 Deposit 10.310,00 Balance c/d 15.440,00 117.200,00 117.200,00 Balance b/d 15.440,00 Bank statement for June 2005 Debit Credit Balance 42.112,00 Cheque 1991 12.920,00 29.192,00 Deposit 15.830,00 45.022,00 Cheque 2004 (note 4) 1.270,00 43.752,00 Deposit 5.380,00 49.132,00 Cheque 1934 102,00 49.030,00 Deposit 12.940,00 61.970,00 cheque 220 (see 1 below) 27.200,00 34.770,00 Deposit 2.300,00 37.070,00 Cheque 2005 33.660,00 3.410,00 Cheque 2006 15.180,00-11.770,00 Deposit (note 3) 40.200,00 28.430,00 Cheque 2007 32.500,00-4.070,00 Deposit 11.150,00 7.080,00 Cheque 2008 18.590,00-11.510,00 Direct deposit (note 2) 5.000,00-6.510,00 Interest of credit balance 140,00-6.370,00 Interest of overdraft 75,00-6.445,00 RD Cheque 5.000,00-11.445,00 Direct deposit (note 2) 30.000,00 18.555,00 Bank charges 555,00 18.000,00 Further information supplied: (1) Cheque No 220 for 27.200 EUR was debited to your account by bank error (2) The deposit of 5.000 EUR is an amount paid in by a client directly and so is the 30.000 EUR.
Examination Accounting I FH Osnabrück, page 5 (3) The RD Cheque was initially included in the deposit of 40.200 EUR. RD cheque is a dishonoured cheque (4) Cheque No 2004 was incorrectly entered into the cash book as 1.720 EUR instead of 1.270 EUR. (b) Which bank balance appears in the balance sheet? Task D4 (13 marks) (1) Describe the four methods which can be used to compute (=calculate) depreciation (4 marks) (2) Describe the three methods which can be used to value inventories (3 marks) (3) What is net realizable value (NRV)? Describe this concept in as much detail as possible and indicate why it is important (3 marks) (4) Describe the retail Sales method in as much detail as possible (3 marks) task D5 (13 marks) the totals of the columns in the sales journal for XYZ Company for the month of December were as follows: Sales 120.000 EUR VAT output 12.000 EUR Total sales plus VAT 182.000 EUR The cost of sales was 60.000 EUR. The totals for the purchases journal for the same month were as follows: Purchases VAT input Total purchase plus VAT 80.000 EUR 8.000 EUR 88.000 EUR Note: the company uses the integrate method with regard to accounting for inventories not the periodic method. The totals for the payroll for the month were, as follows: Gross pay Tax deductions Social security deductions Staff loan deduction Net pay in total 30.000 EUR (3.500 EUR) (4.000 EUR) (100 EUR) 22.400 EUR
Examination Accounting I FH Osnabrück, page 6 The company pays an equal amount to the social security authorities on behalf of the employees, i.e. for each 20 EUR they contribute, the company contributes an equal amount. All the employees work in the selling and administration department. The totals for the cash book for the month of December were, as follows Opening balance Receipts from customers Payments to suppliers Selling and administrative expenses VAT Payment to employees (salaries) Payment to social security authorities Payment to tax authorities Closing balance (overdraft) 15.000 EUR 60.000 EUR (40.000 EUR) (10.000 EUR) (1.000 EUR) (22.400 EUR) (4.000 EUR) (3.500 EUR) (5.900 EUR) Required: (1) Prepare the journal entries to record the sales journal activity in the general ledger. Prepare the cost of sales journal entry as well. (2) Prepare the journal entry to record the purchase journal activity in the general ledger (3) Prepare the journal entry to record the payroll for the month in the general ledger (4) Prepare the journal entry to record the cash book for the month in the general ledger
Examination Accounting I FH Osnabrück, page 7 Task D6 (26 marks) Note: Do (a) or (b) The following income statement (Profit and loss account) of SIPPE Limited for the years ended 31 December 2003 and 2004 and the relevant balance sheets for the respective years. 2003 2004 Sales 200.468,00 240.891,00 Cost of sales 111.450,00 146.700,00 Gross profit 89.018,00 94.191,00 Depreciation -25.584,00-34.584,00 Other expenses -33.699,00-25.419,00 Profit before interest and tax 29.735,00 34.188,00 Interest -4.883,00-4.071,00 Profit before taxation 24.852,00 30.117,00 Taxation -8.698,00-10.541,00 Profit after taxation 16.154,00 19.576,00 Income from associate 850,00 850,00 Net income 17.004,00 20.426,00 Dividends -15.000,00-17.500,00 Retained income for the year 2.004,00 2.926,00 Balance sheets as at 31 December 2003 and 2004
Examination Accounting I FH Osnabrück, page 8 2003 2004 Assets: Fixed assets 77.551,00 87.968,00 Capitalised expenses 1.625,00 812,00 Investment in accociate 3.706,00 4.556,00 Other investments 2.712,00 2.712,00 Current assets Inventory 42.770,00 47.502,00 Receivables 52.953,00 57.984,00 Bank 332,00 465,00 181.649,00 201.999,00 Liabilities and shareholders equity Shareholders' equity 110.697,00 113.623,00 Deferred taxation 5.268,00 5.569,00 Long term liabilities 14.226,00 Current liabilities Accounts payable 51.458,00 56.321,00 Short term borrowings 26.486,00 181.649,00 201.999,00 Required: (1) Using the financing method calculate the free cash flow for the company for the financial year ended at 31 December 2004 (13 marks). Note: treat bank as part of financing and not part of operations. OR (2) Calculate for each of the two years the following financial ratios and comment these on (a) Acid test ratio. Also shown as the quick ratio (3 marks) (b) Days sales outstanding (4 marks) (c) Times interest earned (3 marks) (d) profit margin on sales (3 marks) END OF EXAMINATION