Hey Everyone,
I see one of my discussion answers was posted here
haha, anyway I found the exam easy.
I guess the only challenges were the ambiguous wording/terrible formatting of questions.
These are a couple of examples where I am unsure.
The
1st Question gave me the fits because you're given a Sales Return from which Lyall Import's returns some items to Modern Seating. The "Cost per item" was $500. And the sales are made at a 100% mark-up. So at first thought, I was like okay, Cost of Sales will go down $500 with the Sales Returns being $1000 + $100 GST.
However, I realised that Modern Seating probably wouldn't have given the cost price of the seat to Lyall's Imports. This ultimately led me to interpret the question in this manner:
General JournalDate Details Debit Credit Debit Credit
18/11 Sales Returns
500 GST Clearing 50
Debtors Control 550
Debtor - Lyall's Imports 550
Cost Of Sales
250 Stock Control 250
The original sale was $1500 +150 GST, and Lyall Imports returned 1 chair which cost them $500 + $50 GST to Modern Seating. As the mark-up is 100%, then Cost of Sales is $250. This is my interpretation, and I was wondering if anyone else thought about it like me. This irked me though because the wording of the document and question is just terrible.
Leading onto my next frustration with this exam:
The third question. Now, that Income Statement was half-empty and it annoyed me because it just seemed so bare; same with the reconstruction of the Debtors Control - where were the usual discounts, stock write-downs, stock losses, sales returns etc.!
My main frustration with this question was that the formatting was just terrible, and I had a real issue with determining Office Expenses for the Income Statement. It says in the table that the firm estimates to pay 30800 including GST of Office Expenses in the Budgeted Income Statement. The question then proceeds to say that Prepaid Office Expenses increased from 800 to 2000. Now, how do I interpret this? It says in the BUDGETED INCOME STATEMENT that they've paid 28000 in Office Expenses for the period. So I wrote in 28000. But then I was like but how are prepaid expenses going to increase if all of the office expenses were incurred in the reporting period? So then I became confused.
I ended up writing Office Expenses as $26800 (28000 - 1200), because even though it says they paid $28000 in the budgeted Income Statement, I just don't see how else prepaid Office expenses would have increased. But it was just ridiculous how awful the format of this question was.
Okay, I think I've ranted long enough, I don't know if anyone else had problems like mine, but yeah. It wasn't a hard exam, just a poorly worded one in my opinion. I expect the A+ cutoff to be a bit higher than the midyear.
I'm out.
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