VCE Accounting Question Thread!

[Valyria]

Calculation    of depreciation of display cases for the year ending 30 June 2016
Depreciation =   Existing display cases      New display cases   
=   $32 000 x 10%   +   $3 600 x 10% x 7/12   
=   $3 200   +   $210   
   Depreciation of display cases   $ 3 410

b   WANGARATTA WATCHES
Balance Sheet (extract) as at 30 June 2016
Non-Current Assets   $   $
Computer   35 600   
Less Accumulated Depreciation   11 410 (?)   24 190

Does anyone know why the less accumulated depreciation is 11410, and not 3410?
Because the depreciation of display cases is $3410 per annum.

Your calculations were for the depreciation of display cases, not the firm's computer

[knightrider]

Hi guys i wanted to do accounting 1/2 next year but my school doesn't let us do it

Do you guys think i should get the book and do the accounting 1/2 course anyways

Because my school does offer accounting 3/4 and i want to do it

how important is 1/2 accounting in terms of 3/4 accounting

Will i be missing out on alot if i dont do accounting 1/2 but do 3/4
 All help appreciated

[sabxiao]

Hi guys i wanted to do accounting 1/2 next year but my school doesn't let us do it

Do you guys think i should get the book and do the accounting 1/2 course anyways

Because my school does offer accounting 3/4 and i want to do it

how important is 1/2 accounting in terms of 3/4 accounting

Will i be missing out on alot if i dont do accounting 1/2 but do 3/4
 All help appreciated

Hi, my school doesn't offer 1/2 accounting, and I'm doing 3/4 at the moment.
However, we did have a 1 semester 'foundation' course, which went over the basics
1/2 is quite different from 3/4 and in my opinion, you definitely don't need it to do well in 3/4.
However, that being said, over the summer holidays, I recommend you learning over the basics of Unit 3.
All the elements, ie. assets, owner's equity etc and their formal definitions, double entry accounting (debits and credits), journals and ledgers.
As well as the basic structure of these reports: balance sheet, cash flow statement and income statement
If you're comfortable with these by the next school year, you'll be all set for 3/4

[Jason12]

I have a pre adjusted trial balance and information that says insurance is paid annual in advance on 1 march. The trail balance is as at 30 june 2013 and the only figure I have is prepaid insurance expense for 2200 DR
I also have a term deposit that was invested on 1 august 2009 for a period of 5 years. Interest is receivable half yearly on 31 January and 31 July each year at the rate of 5% per annum. The term deposit is valued at 12000CR. Not sure what to do

[mega_H]

I have a pre adjusted trial balance and information that says insurance is paid annual in advance on 1 march. The trail balance is as at 30 june 2013 and the only figure I have is prepaid insurance expense for 2200 DR
I also have a term deposit that was invested on 1 august 2009 for a period of 5 years. Interest is receivable half yearly on 31 January and 31 July each year at the rate of 5% per annum. The term deposit is valued at 12000CR. Not sure what to do

This is just my method and i'm not sure if it's right but i think 2200 would include 12 months + 8 months from the previous period. Therefore you would divide 2200/20 and times it by 12 to get an expense of 1320. For the term deposit you would receive $600 interest a year and at balance day you would have 5 months you have earned but not yet received. 600/12 x5 = 250

[kk.08]

How are budgets used to facilitate planning and control during the budgeted period?

[p.taaa]

Planning:
if the firm expects a cash surplus of $10000 or any number, they can plan to purchase an NCA or take drawings. If there is a cash deficit, the firm can plan to take out a loan in the budgeted period. So budgets can be used for planning.

Control:
They can essentially use it as a benchmark to track actual expenditures. So if they budget for $1000 in advertising and see their actual advertising is already $1000, then the business will know not to spend anymore on advertising, so keeping within their restrictions. So it can control their expenditure

[lmnop]

On the 1st August 2013, Bert has decided to reduce the price of the item Coloured Paynes.
The stockcard for this item is shown below.
Date           Details           IN               OUT             BALANCE
Jul 31       Memo 201                       4@$10 ea         10@$10 ea 
                                                                            50@$12 ea   

Bert decided to reduce the selling price of the item to $12 each (plus $1.20 GST). He also is
going to make 3 signs to advertise this sale costing $20 each. (Memo 202).

So how do you calculate the stock write-down?               
Apparently you are meant to write-down the latest line of stock by $1 per unit but I'm not sure how.

[Zealous]

Bert decided to reduce the selling price of the item to $12 each (plus $1.20 GST). He also is
going to make 3 signs to advertise this sale costing $20 each. (Memo 202).   
Apparently you are meant to write-down the latest line of stock by $1 per unit but I'm not sure how.

So there are 60 units of the Coloured Paynes on hand. The Net Realisable Value of each item will be $12 less the advertising costs. The advertising costs a total of $60 and there are 60 units of stock so the advertising will cost $1 per unit. Therefore the NRV will be $11 for each item.

Using the lower of cost price and NRV rule we do not need to write down the first stock as the cost price is less than the NRV. But the 50 units valued at $12 each will need to be written down as the NRV is lower at $11. They will need to be written down by $1 as you mentioned.

So the final stock writedown will be:

[lmnop]

Ohhhhhhhhhhhhhhhhhhh....

Thanks heaps.

[Rachelle]

can someone please explain the answer to b), which is 200. (in terms of the months)
i know its 1800/x
x=? & why
thanks!

[Kuroyuki]

can someone please explain the answer to b), which is 200. (in terms of the months)
i know its 1800/x
x=? & why
thanks!

My memory of accounting is pretty dodgy but ill try to explain it
first the business prepares reports monthly.
the 1800 is at dec 31st but the prepaid rent started on the 1st October. So actually 3 months of rent have already been expensed by the end of december. So the remaining 1800 dollars is divided on the remaining 9 (12-3) months. That gives you 200 per month.

[Rachelle]

Thanks it makes sense!
Dodgy?! I don't think so mr 48 in accounting...

[Rachelle]

Your calculations were for the depreciation of display cases, not the firm's computer

They are supposed to be for the display cases?

[Valyria]

They are supposed to be for the display cases?

Calculation    of depreciation of display cases for the year ending 30 June 2016
Depreciation =   Existing display cases      New display cases   
=   $32 000 x 10%   +   $3 600 x 10% x 7/12   
=   $3 200   +   $210   
   Depreciation of display cases   $ 3 410

b   WANGARATTA WATCHES
Balance Sheet (extract) as at 30 June 2016
Non-Current Assets   $   $
Computer   35 600   
Less Accumulated Depreciation   11 410 (?)   24 190

Does anyone know why the less accumulated depreciation is 11410, and not 3410?
Because the depreciation of display cases is $3410 per annum.

You asked why the accm dpn was 11,410 rather than 3,410 which was the accm dpn for the firm's computer. Your preceding calculations were for the dpn of display cases not the computer, leading to a variance in accm dpn.