VCE Accounting Question Thread!

[Angelz369]

For the first question on the 2010 vcaa exam I don't understand how cash at bank is $21 500 and for question 1.3.1 how do you get a depreciation of $1200?
Please help mee!!

[nacho]

yea can someone help me with that too?
depreciation is actually a good question, in their trial balance, they've added $3000 to the vehicles value, by accident, because of vehicle repairs.
so if you deduct that $3000, the new value is $20000.
then,
20,000 - 8000
---------------
       5

$2400 per year
= $200 per month
and its for 6 months (i actually sort of do not understand this part)
therefore $1200


HOW DO YOU CALCULATE THE INTEREST EXPENSE?
someone PLEASE tell me

[tazza]

How to calculate bank
= 10000 (capital) -35000 (stock)-3500(GST paid) +50000 (loan)
=21500

Depreciation
=2400 p.a
=200 per month
And nacho, as the vehicle was contributed on the 1 january, and the report is being produces on the 30th june, this means that the vehicle has being earning revenue for the business for 6 months and the depreciation expense incurred must match this. If it had of been contributed on the 1st Feb then the expense would have been for 5 months, and so on. So it ends up being 200 x 6 =1200

Now for interest expense...

The loan is 50000 and it is paid at 9% p.a., which is 50000 x9% = 4500 per year.


Dividing by 12 = $375 per month. Now this concept is almost the same as the depreciation expense. The loan was taken out on the 31st of January, so that means that the business has had the loan for 5 months, so 375 x 5 = $1875.

But because interest is paid at the end of each year, this means that the interest expense has been INCURRED but not yet PAID, so $1875 is debited for interest expense and $1875 is credited for Accrued interest expense.

Hope that helps.

[nacho]

anyone done neap 2011?
i disagree with solutions on first question, can someone help me out?
i put my bank overdraft as 1700,
rather than 1200
because it says that the business will pay the ZNA finance loan, $500 per month.
the business commenced on january 1, so that means during january, they paid 500.
therefore the overdraft should be 1200 + 500 = 1700?
what have i done wrong?

also, for q1.4.2
i closed the wages account, because it said 'show how the wages expense account would appear at 30 june, 2011 after all entries had been posted'.
did i misinterpret it, because it only said 'after all entries had been posted'? at teh start of the question, it said 'reports are prepared anually'.
doesnt that mean that we need to close the ledger now?

woo, 84/90 on 2011 neap
POSSIBLE 86/90 if answers are wrong !!

[BoredSatan]

anyone done neap 2011?
i disagree with solutions on first question, can someone help me out?
i put my bank overdraft as 1700,
rather than 1200
because it says that the business will pay the ZNA finance loan, $500 per month.
the business commenced on january 1, so that means during january, they paid 500.
therefore the overdraft should be 1200 + 500 = 1700?
what have i done wrong?

also, for q1.4.2
i closed the wages account, because it said 'show how the wages expense account would appear at 30 june, 2011 after all entries had been posted'.
did i misinterpret it, because it only said 'after all entries had been posted'? at teh start of the question, it said 'reports are prepared anually'.
doesnt that mean that we need to close the ledger now?

woo, 84/90 on 2011 neap
POSSIBLE 86/90 if answers are wrong !!

For the Bank Balance.
The Question says that DURING January 2011 the business took over the loan. So for all we know this could have been on the 31st on January so therefore we cannot assume that it was at the start of the month.
Answer is correct unfortunately

Hmm I did what you did for the second question and looking at the answer it is a bit obscure.. Maybe give yourself half a mark there

[benrattray]

What items in a Balance Sheet would best show the Going Concern and conservatism principles?
Apparently for conservatism, its stock control, but i cant work out why

[Hodgeyhodgey]

What items in a Balance Sheet would best show the Going Concern and conservatism principles?
Apparently for conservatism, its stock control, but i cant work out why

Going Concern would be a non-current asset, as it shows that the life of the business is assumed to continue indefinitely, because by reporting it as non-current it shows it will provide economic benefit to the entity as it is consumed in future reporting periods.

But stock control for conservatism? Hm.....
Maybe because it is a control account and it provides a cross-check between it and the balances of the subsidiary accounts it makes sure losses are reported when possible and gains only when certain?

Haha I'm not real sure, mind my blabbing if this is all wrong.

[benrattray]

haha thanks man
yeah im not sure about the conservatism thing
there doesnt seem to anything that shows conservatism

[luffy]

haha thanks man
yeah im not sure about the conservatism thing
there doesnt seem to anything that shows conservatism

Well, if a stock gain has occurred, then we use the smallest cost price in the balance. Hence, it shows conservatism in such cases. However, that probably isn't the entire reason for noting that it is conservatism. Anyone else got any ideas?

[nacho]

last minute questions:
also
just a bunch of last minute questions:
- explain the role of stock cards in an accounting system
explain the affect of stock loss on the balance sheet
referring to one qualitative characteristic, explain the role of a physical stock take
Explain how a post adjustments trial balance can assist in the calculation of an accurate profit figure
explain two uses of the profit and loss statement
and what are the general advantages AND uses of the cash flow statement over the statement of receipts and payments.

 
Thanks

[benrattray]

oh how about for conservatism, stock control shows stock at cost prices, and not selling prices, because gains from sales are not certain
but thats kinda historical cost too

[nacho]

oh how about for conservatism, stock control shows stock at cost prices, and not selling prices, because gains from sales are not certain
but thats kinda historical cost too

nope, you are correct.
also, because the vcaa study design does not specify a method of calculating stock gains, i personally would use the selling price thing.
(Stock gain = either most conservative price, or Last stock out)

also, vcaa 2009 exam, i just did it.
i dont quite understand one of the question i got wrong.
1.7
A credit sale that occurred in june has not been recorded.
State the effect of this omission on the profit and loss statement.

they say
Revenues:
Credit sales            understated
stock gain    understated

how is there a stock gain, if a credit sale goes unrecorded?
shouldnt there be a stock loss, because u have fewer stock on hand, and when u take a stock take, it will show up as 1 less stock than what our stock cards say?

[ech_93]

I have a question.... How was the insurance in 2.2.2 (VCAA 2008) calculated?

I don't understand how they found the figure for either general journal entry

[Angelz369]

thanks tazza.

I know this is a stupid question but is cost price cost of sales?

[ech_93]

Yes