Accounting: Discussion, Questions & Potential Solutions

[Jim_Bob]

Ah yeah I definitely got that one wrong. Pretty sure I did the wages and equipment right although my net increase was off by about $20,000. Do you remember roughly what your receipts from debtors or payments to creditors were?

R.F.D was just the credit sales, bad debts discount expense. op. clos bal,  no sales returns - dont remember the figure
Stock Control was to find credit purchases of stock -  just cost of sales and opening,closing balances
Creditors Control - just input the stock control/gst clearing, no discount revenue, no purchase returns and op. clos. balances

Don't remember if there was a discount rev or discount expense, but there was one not the other and there was no sales nor purchase return.

Edit: wait i dont remember the sales/purchase returns ahaha sorry
Edit 2: But there was no tricks from what i am aware of

[Ob2232]

Opening balance was $3800. I'm 90% sure we didn't have to include depreciation since 1. there were only 6 marks allocated to the question, and 2. it said to record general journal entries for the sale of the asset and purchase of the new one. You could technically say the depreciation is included in the sale of the asset but I highly doubt that we had to include that. VCAA generally don't do trick questions like that without explicitly stating it, and they already assigned 1 mark to that earlier, they wouldn't give us 1/2 more marks just for knowing "depreciation/acc.

Having the disposal on balance day did make a bit confusing on whether or not you had to record depreciation. I’m pretty sure you would have to record the depreciation as we are required to depreciate non-current assets right up to disposal, and the question didn’t state that the depreciation had already been recorded.

[Ob2232]

For the prepaid advertising question, did anyone do anything to the $2400, like split it up or anything??

Yeah I split it as the payment happened half a month after the campaign started. So $400 then would’ve gone to advertising expense at that date (1/2 a month out of 3 months = 1/6) and the other $2000 would’ve gone to prepaid advertising. Then another $400 was adjusted to advertising from prepaid at the end of the month. While the total expense is still $800 for than media campaign, not splitting it at the 15th would result in your debit entry for prepaid advertising to be too high.

[integrationbyrecognition]

What did everyone get for the classification of the sales return?

[Jim_Bob]

Yeah I split it as the payment happened half a month after the campaign started. So $400 then would’ve gone to advertising expense at that date (1/2 a month out of 3 months = 1/6) and the other $2000 would’ve gone to prepaid advertising. Then another $400 was adjusted to advertising from prepaid at the end of the month. While the total expense is still $800 for than media campaign, not splitting it at the 15th would result in your debit entry for prepaid advertising to be too high.

But the firm paid for advertising in advance...
So you would have to debit bank for 2400.
Think of it like in the Cash Payments Journal
Sept. 15. Prepaid Advertising Expense Bank ($2640) Sundries ($2400) and GST ($240). Then transfer because its still not balance day and the firm reports monthly

[Jim_Bob]

What did everyone get for the classification of the sales return?

I put negative revenue and referred to the different items it affects . i.e. refer to expense definition with Cost of Sales, Decrease Sales, Debtors Control, Stock Control and later said about GST clearing

[Jim_Bob]

Having the disposal on balance day did make a bit confusing on whether or not you had to record depreciation. I’m pretty sure you would have to record the depreciation as we are required to depreciate non-current assets right up to disposal, and the question didn’t state that the depreciation had already been recorded.

Was your depreciation simply the asset value in the Balance Sheet minus its Acc. Dep, subtract then apply the rate?

[integrationbyrecognition]

I put negative revenue and referred to the different items it affects . i.e. refer to expense definition with Cost of Sales, Decrease Sales, Debtors Control, Stock Control and later said about GST clearing

Is negative revenue actually an element?

[Jim_Bob]

Is negative revenue actually an element?

Its up for interpretation. It likes calling accumulated depreciation a negative asset. You cant just call it an expense

[Ob2232]

But the firm paid for advertising in advance...
So you would have to debit bank for 2400.
Think of it like in the Cash Payments Journal
Sept. 15. Prepaid Advertising Expense Bank ($2640) Sundries ($2400) and GST ($240). Then transfer because its still not balance day and the firm reports monthly

I don’t have the question here but I remember reading that a 3 month campaign that started 1 September was paid for on 15 September. This means when they recorded this, that half month already incurred would be an expense, not prepaid. E.g Credit bank 2640, deb gst 240, deb advertising exp 400 and prepaid advertising $2000, then $400 adjustment at the end of month.
I may have mixed up the dates tho I’m prone to making mistakes.

[Ob2232]

Was your depreciation simply the asset value in the Balance Sheet minus its Acc. Dep, subtract then apply the rate?

(Yep cost price less accumulated depreciation) times 0.4 divided by 12 for one month I think it was

[jamesmctank]

Did everyone get a GST balance of $89 credit for 1b?
And did anyone else get a net profit of 53k?
How many marks will i lose for not having the disposal of van in the general journal for 5d (i did all the other entries just didnt debit/credit the disposal of van account at all)

[Jim_Bob]

Did everyone get a GST balance of $89 credit for 1b?
And did anyone else get a net profit of 53k?
How many marks will i lose for not having the disposal of van in the general journal for 5d (i did all the other entries just didnt debit/credit the disposal of van account at all)

I had a debit balance of 1269 or something like that.
You plus the op. bal to the credit sales +purchase return GST, subtracting the sales returns GST

[forbiddensoulxx]

I had a debit balance of 1269 or something like that.

Shouldn't it be a credit balance since the GST in was greater than the GST out?

[Richard Feynman 101]

I had a debit balance of 1269 or something like that.
You plus the op. bal to the credit sales +purchase return GST, subtracting the sales returns GST

sounds familiar. Did you draw a GST clearimg a/c?