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TRINITY COLLEGE
Trinity Ave, East Perth, Western Australia
ACCOUNTING AND FINANCE UNIT 4
Task 2B – Statement of Financial Position,
Statement of Changes in Equity
Student Name:
_______________________
Teacher:
Ms Harris-Miller
Date:
25th March 2015
Time Allowed:
1 period (50 minutes)
Type:
Application Task
Weighting:
7.5%
Outcomes Addressed: Outcomes 1 and 2
Structure of this assessment
No. of
Sections
available
Multiple Choice
Marks available
Marks Achieved
5
Question 1
15
Question 2
30
Possible Total: 50
(Weighting: 10%)
Actual
Total:
Teacher’s Comment: __________________________________________________
___________________________________________________________________
Student Reflection: ___________________________________________________
___________________________________________________________________
Parent’s Signature ___________________________________________________
1
SECTION ONE – MULTIPLE CHOICE
Multiple Choice Answers:
1
2
1
4
5
In the Statement of Financial Position, Prepaid expenses would be recorded as:
a
b
c
d
2
3
5 marks
an asset as part of other current assets
a non-current liability under trade payables
an non-current asset under trade receivables
a current liability under trade payables
Which one of the following would explain a decrease in retained earnings?
a
b
c
d
3
Upward revaluation of a non-current asset
Operating loss after tax
Operating profit after tax
Transfer from general reserve to retained earnings
A transfer to the General Reserve from Retained Earnings will result in
a A increase to the Retained Earnings balance
b A decrease to the General Reserve balance
c No overall effect on the Total Equity of the Company
d An increase to both General Reserve and Retained Earnings balances
4
Which of the following statements is not true of a change to the value of Share
Capital of a company:
a
b
c
d
5
It could be the result of Dividends being paid
It could be the result of share issue costs being paid
It could be the result of a bonus share issue
It could be the result of a float of shares by the company
Which of the following items will not effect the Total Equity of the company:
a Profit after tax
b Share issue
c Ordinary dividend payable
d Debentures
2
SECTION TWO – PRACTICAL RESPONSE
15 marks
QUESTION ONE
Oliver’s Olive Oil Limited
Trial Balance as at 30 June 2013
Debit
Ordinary Share Capital
(45,000 shares of $1.00 each, fully paid, less share
issue costs of $2,600)
Retained Earnings
General Reserve
Asset Revaluation Reserve
Credit
42,400
8,900
16,000
45,000
The following events occurred during the year ending 30 June 2014:
July 2013
The company allotted a further 30,000 ordinary shares of $1 each, fully paid.
Share issue costs were $2,500
Feb 2014
Assets were revalued by $30,000
Mar 2014
The company declared and paid an 6 cents per share interim dividend to the
ordinary shareholders
June 2014
The company made a profit after tax of $7,600 in the 2013 financial year. The
directors made a decision to transfer $2,000 from the general reserve to the
retained earnings
Required:
Prepare a Statement of Changes in Equity for Oliver’s Olive Oil Limited for the year
ending 30 June 2014.
Workings:
3
Oliver’s Olive Oil Limited
Statement of Changes in Equity for the year ended 30 June 2014
Balance 30/6/2013
Changes in Equity
Bonus share issue
Share issue costs
Dividend
Total comprehensive
income
Transfer from/to general
reserve
Balance 30/6/2014
4
QUESTION TWO
30 marks
Below is the Trial Balance of Below Zero Limited as at 30 June 2015
DEBIT
Cash at Bank
Cash on hand
Accounts Receivable
Accounts Payable
Prepaid expense
Accrued expense
Allowance for doubtful debts
Goodwill
Accrued interest income
Land
Fixtures and Fittings
Accumulated Depreciation F & F
Plant and Equipment
Accumulated Depreciation P & E
Vehicles
Accumulated Depreciation Vehicles
Interim ordinary dividend
Debentures (2030)
Retained Earnings (balance as at 1/7/14)
Ordinary Share Capital
General Reserve
Asset Revaluation Reserve
Profit & Loss summary (before tax)
CREDIT
80,000
1,000
174,000
131,400
2,000
3,000
2,000
40,000
1,000
1,000,000
374,000
50,000
760,000
192,000
150,000
50,000
40,000
$2,622,000
190,000
41,000
1,000,000
70,000
639,000
253,600
$2,622,000
Additional Information:

The Ordinary Share Capital consists of 1 million shares issued at $1.00 each

At the end of the year, the Directors resolved that:
$76,080 be provided for company income tax liability, 30% of profits
A final dividend of 4 cents per share should be paid on the ordinary shares, awaiting
approval from shareholders.
$40,000 be transferred from Retained Earnings to the General Reserve
5
Required:
Draw up the Statement of Financial Position for Below Zero Limited as at 30 June
2015 after all the directors recommendations have been carried out.
You should include Notes to the Accounts for
Property, Plant and Equipment
Other Components of Equity (Other Reserves)
Share Capital
Dividends
Workings:
6
Below Zero Limited
Statement of Financial Position as at 30 June 2015
7
Below Zero Limited
Notes to the Statement of Financial Position as at 30 June 2015
1: Property, Plant and Equipment
2: Share Capital
3: Other Reserves
4: Dividends
8