VCE Accounting Question Thread!

[nacho]

Rent is paid 3 months in advance. The rent is paid on the 1st day of March, June, September and December. At 30 June 2009 the prepaid rent expense account had a debit balance of $600. On 1 March 2010, there was an increase in the quarterly rent to $1200 plus $120 GST.

For the year ended 30 June 2010, calculate:
- The cash paid for rent
-  the rent expense

here's how I did it, my answer was wrong.


If after 1 months worth of rent is consumed, we have $600 left, therefore we pay $900 per three months for rent.
we paid:
| June, July, August |   Sept - Nov | Dec - Feb 2010 |March - May| June+
        $900                    $900             $900                $1200        $1200
total = $5100
Neap 09 answer = $4200
for some reason, they have excluded the payment for the first three months from june - august 2009 - anyone know what i've done wrong?

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

REnt expense:
Used june 09 - 10
 = 5100 - 800 = 4300

book says: $4000
__________________________
I think i realised the answer to the first question as i was typing. its because the first payment of $1200 occurs on June 1, 2009, which is a different reporting period from the year ended June 30 2010.

still, answer both q's

[ivanex]

i have a question??? in the pre-adjustment trial balance at 30 june 2010 the loan was 50000 credit. the question is The interest on the loan is 9% per annum payable at 31 dec each year

[_avO]

@nacho prior to the increase in quarterly rent in March, the rent expense a month was $300. From July 1 2009 to February 28 2010 there is 8 months of consumption.

8 x $300 = $2400

After the price increase, rent costed $400 a month so from March 1 2010 to June 30 2010 there's 4 months.

4 x $400 = $1600

Add both gets you $4000

i have a question??? in the pre-adjustment trial balance at 30 june 2010 the loan was 50000 credit. the question is The interest on the loan is 9% per annum payable at 31 dec each year

Whats the reporting period? I'm assuming 6 months so
Your interest rate is 9% p.a. and from January 1 to June 30 you've incurred 6 months of interest
$50000 x 9% = 4500 p.a.
4500/12(months) x 6 months consumption
= $2250

[sam.utute]

i have a question??? in the pre-adjustment trial balance at 30 june 2010 the loan was 50000 credit. the question is The interest on the loan is 9% per annum payable at 31 dec each year

If this is the question from the VCAA 2010 exam, then the reporting period was only 5 months (as trading only began February 1).
So do the same thing that _avO has explained, but multiply the by 5 instead of 6.

[chelseaFC]

If you worked out yearly depreciation on a non current asset was say for example 1566.66, are you expected to round this number or leave it as a decimal? Every time this happens i feel as if the answer cannot be correct.

[sam.utute]

If it happens, you should round the number (Relevance: having it in cents wouldn't be useful for decision-making).

In VCAA exams, it generally doesn't happen. Don't be too worried if it does though. You'll only lose a maximum of 1 mark for incorrect calculation.

[ruchika5]

Which trial exams are the most challenging to complete?

[soopertaco]

2011 mr wood, compak
2010 vcaa if you haven't done it yet (well i've heard it's challenging)
Neap 2010 or 2011 i think

Just do all you can but these are reasonable exams, whether they're challenging or not depends on your skill level which i believe comes with doing a variety of questions from different exams

[Dranoel523]

Kinda hard question, but I would like some tips on determining the actual expenses on prepaid balance day adjustments.

From08 VCAA

-Oct 11 2007. business paid 3600 to renew annual insurance policy due to expire on 31 Oct. 2007. On June 30 2008 remaining baance in prepaid insurance was 4720 prior to any adjusting entries.

How do i determine the amount of insurance used up?

Answer is 3520. But I have no idea how they derived that. Also is there some sort of steps/template you guys use when solving questions like this?

[123456k]

My friend asked me to help him out with this question. You deduct the 3600 from the 4720 to get the balance for the starting reporting period for that year(jul 1 2007). You should get 1120. Now it mentions that the insurance was renewed during oct 11 and starts on nov 1. This means that the balance of the prepaid insurance from the starting reporting period had lasted til oct 31. Therefore the 1120 amount would have all been used up over the three months(Jul 1 to Oct 31). Now you would have to calculate the expense incurred from the prepaid amount of 3600(deduct 360 GST from 3960 to get prepaid insurance amount)which starts to be consumed from Nov 1. When the prepaid insurance started to be consumed from Nov 1 2007 to Jun 30 2008(end of reporting period), eight months have past. Now the prepaid insurance was paid in advance for 12 months. 3600/12 = 300, this would give you the insurance expense that had incurred for 1 month. Now you would have the figures to calculate insurance expense for the 8 months that incurred during Nov 1 2007 to Jun 30 2008. 8 x 300 = 2400, this would give you the amount of insurance expense incurred from Nov 1 2007 to Jun 30 2008. Now you would add 1120(Jul 1 2007 - Oct 31 2007) to 2400(Nov 1 2007 - Jun 30) to calculate the total insurance expense incurred for the reporting period. This should add up to 3520.

Only 3% of the entire population of students got full marks for this question. Very tough question D:

Ask questions if you don't understand my explanation

  

[Anon123]

Just doing some old VCAA papers at the moment, and a few of the answers/questions have me confused;

one of them asks for you to complete what the liabilities section of the business in the BS would like like at (some) date.
-I didn't know how to interpret this, does it ask for ALL liabilities (which I thought seemed most correct), do you split up CL and NCL?
-the answer only showed CL....

and another one, there were GST Payments in the cash payments journal, but this was excluded in the cash flow statement in the answers. I put it as an outflow for operating activities, but there is no such entry in the solutions
-answers are wrong, or have I messed up?

[sam.utute]

Could you refer us to the exams that these questions popped up in?

[soopertaco]

There must be something funky going on with the answers because GST is always recorded in the cash flow stmt

[soopertaco]

Q: just looking for some clarification...When there is an existing non-current asset in the business say computer equipment $3000 and the business purchases more of the SAME asset during the period ($1000) and they give us the depreciation information for the new equipment (residual value etc) and they ask us to find the depreciation expense for the period, given the computer equipment depreciates at 20% p.a should we calculate the full value of computer equipment depreciated by 20% ($3000 + 1000)??

OR should we calculate the dep exp on the new equipment and the calculate dep exp on the old equipment and then add them?

[MaddehZ]

calculate them seperately then add them


got a question


if you get a source document - say a contribution of vehicle by owner that you missed out dated 24th of June
but its 30th of June atm...

do you record it as 30th of june in the general journal ?