Questions and Answers of Accounting 28th Edition

The business purchased on credit:a a new car for a sales representative on 1 February 2022 $36 300 ($33 000 + $3300 GST) with a depreciation rate of 20% p.a. and a residual value of $3300 ($3000 +
A new computer was purchased on 31 October 2021 for $5445 ($4950 + $495 GST) with nil residual value. It is to be depreciated at 33.33% p.a. using the straight line method, with year end being 30
During the year ended 30 June 2022, three assets were purchased and are to be depreciated using the straight line method. All have nil residual values.a 1 August 2021, machinery depreciated at 15%
Electronic optical equipment was purchased and installed for $335 500 ($305 000 + $30 500 GST) on 1 July 2021. The equipment is expected to give 5000 hours of usage, after which it would be disposed
The business purchased an aircraft on credit on 2 January 2022 to make it more efficient for its business and management, as it worked in the western region of New South Wales. The aircraft cost $374
Sophisticated medical scanning equipment was purchased on credit and installed for $800 800 ($728 000 +$72 800 GST) on 16 July 2021. The residual value is only as scrap metal and is considered
A business involved with long-distance transport bought a new truck designed for haulage between all capital cities throughout the country. The motor vehicle was purchased on credit on 31 July 2021
H Bilberry purchased a machine on 31 July 2021, to be depreciated by the straight line method at 15% p.a., which cost $26 312 ($23 920 + $2392 GST). Installation and commissioning was completed on 31
G Basil, whose accounts end on 30 June, purchased a computer for cash on 30 September 2021 for $8030 ($7300 + $730 GST) with nil residual value, to be written off at 33.33% p.a. using the straight
The business of B Walnut purchased some non-current assets during the year ended 30 June 2022.A photocopier (office equipment) was purchased on 31 July 2021 for $4147 ($3770 + $377 GST) and is to be
On 1 July 2021 the business bought on credit specialised equipment at a total cost including installation of$68 981 ($62 710 + $6271 GST). It is to be depreciated using the diminishing balance method
On 1 July 2021, machinery was purchased on credit for $24 398 ($22 180 + $2218 GST) with a residual value of $2200 ($2000 + $200 GST). It is to be depreciated using the diminishing balance method at
On 1 July 2021, equipment costing $11 000 ($10 000 + $1000 GST) was purchased for cash. It is to be depreciated at 30% p.a. using the diminishing balance depreciation method.Prepare:a a diminishing
The business made a credit purchase on 1 July 2021 of a large-capacity integrated compressor and generator, which is grouped as plant and machinery. It is to be depreciated using the diminishing
Machinery was purchased on 31 August 2021 for $81 400 ($74 000 + $7400 GST), and installed and commissioned on 30 September 2021 for $9020 ($8200 + $820 GST) with no residual value. Depreciation is
As part of a major expansion, the business bought on credit equipment at a cost including installation of $77 968 ($70 880 + $7088 GST). Installation and commissioning were completed on 1 February
Plant and equipment was purchased on credit on 1 September 2021 for $85 415 ($77 650 + $7765 GST).Installation was finalised and commissioned on 31 October 2021 at a cost of $18 821 ($17 110 + $1711
New cupboards, desks and chairs (office furniture) were purchased and management want to see the difference between using the straight line and the diminishing balance methods of depreciation.
Two machines were purchased in the financial year to 30 June 2022.Machine 1 is depreciated using the diminishing balance method at 35% p.a. It was purchased and installed on 31 January 2022 for $44
Equipment costing $12 716 ($11 560 + $1156 GST) was purchased on 30 November 2021 and installed and commissioned on 31 January 2022 at an additional cost of $5148 ($4680 + $468 GST). Depreciation of
Don’s business buys three motor vehicles for the business and pays by debit card between 1 July 2021 and 30 June 2022. As a result of the nature of the business, each motor vehicle is put to a
D Burrendong purchased the following assets for cash on 1 December 2021:i machinery for $17 270 ($15 700 + $1570 GST) to be depreciated at 30% p.a. diminishing balance method ii office equipment for
Peggy See acquired the following assets:i Office furniture was purchased for cash on 31 July 2021 for $7920 ($7200 + $720 GST) with a 10% p.a.straight line depreciation rate.ii Machinery was
The business of Marie Hend purchased on credit machine 1 on 30 November 2021, which was operational at that date. The cost including installation was $35 750 ($32 500 + $3250 GST) and there is an
On 31 July 2021 the business of Ruth Lye purchased fixtures and fittings costing $19 250 ($17 500 + $1750 GST) with an estimated residual value of $1100 ($1000 + $100 GST) at the end of the useful
Margaret Kline’s accounts are to record the following assets:On 1 August 2021 office furniture was purchased at a cost of $13 860 ($12 600 + $1260 GST) with a residual value estimated at $660 ($600
Complete the relevant extract general ledger accounts on the disposal of machinery for each of the following independent parts. The gain on disposal or loss on disposal account is also to be shown.
The plant of D Nepean was depreciated using the straight line method at 15% p.a. with no residual value.On 30 June 2022, an extract of accounts showed plant $45 000 and accumulated depreciation –
Machinery was purchased on credit by D Bever on 31 March 2021 for $38 500 ($35 000 + $3500 GST) with an expected useful life of five years, using straight line depreciation and no residual value. On
On 30 November 2021, a motor vehicle was purchased for cash $45 738 ($41 580 + $4158 GST) with an estimated residual value of $5038 ($4580 + $458 GST) and was to be depreciated using the diminishing
On 1 February 2022, the business purchased on credit and had installed machine 1 for $19 371 ($17 610 + $1761 GST) with a residual value $990 ($900 + $90 GST). The diminishing balance depreciation
The business of Bernadette Williams purchased and sold a number of non-current assets. On 1 December 2021, the business purchased for cash a truck (motor vehicle) for $55 660 ($50 600 + $5060 GST)
On 31 March 2022, L Cowal purchased a new computerised machine costing, before trade-in, $27 500 ($25 000 +$2500 GST). The old machine had cost $18 000 and the accumulated depreciation was $7800 to
J Ingenuity purchased two machines for cash on 2 January 2021.Machine 1 cost $8800 ($8000 + $800 GST) and is depreciated at 25% p.a. diminishing balance.Machine 2 cost $11 000 ($10 000 + $1000 GST)
M Tomah purchased two machines on 1 January 2022; they were both installed and commissioned on 1 February 2022. Machine 1 cost $48 700.30 ($44 273.00 + $4427.30 GST), has a residual value of $2940.30
On 15 September 2021, Bendigo Fabricating purchased for cash from Battenfeld Importers a BF767 Multi-Ripple metal folding machine for $30 800 ($28 000 + $2800 GST). Delivery and installation costs
On 30 April 2022, E Shelley purchased a new Ford Falcon sedan registration KKW 443 from Steven Motors for $49 500($45 000 + $4500 GST). Funds were transferred electronically. The estimated life is
B Marcovich pays cash for three vehicles on 2 January 2023 for $38 500 ($35 000 + $3500 GST) each.Motor vehicle 1 will be replaced after five years and has an estimated residual of $2200 ($2000 +
Equipment is to be depreciated using the units of use method with a preset unit total of 11 000. The equipment was in production from:1 December 2021 to 30 November 2022, producing 2500 units 1
R Gilmour & Associates purchased and installed on credit a computer system that was commissioned on 1 April 2021 for$66 000 ($60 000 + $6000 GST). It is expected that the computer system has a useful
Kevin Hair purchased sophisticated machinery on credit costing $192 500 ($175 000 + $17 500 GST). It has a residual value of $5500 ($5000 + $500 GST) and was commissioned on 1 March 2021. The
A Kenworth truck is purchased on credit by Samuel Keith for $522 500 ($475 000 + $47 500 GST) on 1 May 2021. It is to be used for interstate long-distance haulage and is to be depreciated over 500
Henry M Thomas purchased machinery on credit with a total installed cost of $302 500 ($275 000 + $27 500 GST). It has an estimated residual value of $5500 ($5000 + $500 GST) and was commissioned on 1
Use the websites of the Fair Work Commission and Fair Work Ombudsman to develop your understanding of how to locate and identify employment-related issues. List some of the main features of the
A normal week is 38 hours and all hours in excess of that are paid at time and a half. What are the equivalent and total equivalent hours per week per employee (figure 14.2)? The first employee’s
If 38 hours per week are the normal hours, what is the total hours paid for each of the following? a b d e f Normal + 1 hour overtime @ 12/ Normal + 5 hours overtime @ 1-1/2 Normal +42 hours
Complete the payroll register of T Rocks showing the total gross for the week ended 19 February 2022.Use the information shown in figure 14.4. Payroll Summary of T Rocks for week ended 19 February
Complete the payroll register of L Palmers showing the total gross for the week ended 5 August 2022. Use the information shown in figure 14.5. Payroll Summary of L Palmers for week ended 5 August
Complete the payroll register of C Stream for the week ended 16 September 2022 from figure 14.6.All employees ordinarily work 38 hours per week, and have had their hours approved and have sufficient
Complete the payroll register of B Hunter (figure 14.7). Employees normally work 35 hours per week, have had their hours approved and have sufficient leave accumulated. Add a leave loading of 17.5%
A summary of payroll time sheets and approved overtime details of R Saunders has been prepared for the week ended 29 January 2022 in figure 14.10. Payroll Summary of R Saunders for the week ended 29
Use figure 14.11 to prepare the payroll register of P Kennedy for the week ended 29 July 2022. All employees contribute superannuation at 7% of their ordinary gross pay. Calculations must be correct
Use figure 14.12 to prepare the payroll register of G Fitzroy for the week ended 14 October 2022. Payroll Summary of G Fitzroy for the week ended 14 October 2022 Overtime Employee Hourly Rate D Brown
Use figure 14.13 to prepare the payroll register of M Anthony for the week ended 15 April 2022. Payroll Summary of M Anthony for the week ended 15 April 2022 Overtime 2 Employee Hourly Rate P Hudson
You are required to prepare the payroll register of Belinda Way for the weeks ended:All employees normally work 38 hours a week and have voluntary superannuation deducted as a percentage of their
From the summary of payroll register of Errol McCooey for the month ended 26 February 2022 (figure 14.21), use the direct method of processing the payroll through the cash payments journal. Then post
From the summary of payroll register of John Wood for the month ended 25 November 2022 shown in figure 14.25, you are required to use the indirect method of processing the payroll into the general
From the summary of payroll register of I M Shepherd for the month ended 25 November 2022 shown in figure 14.29, you are required to use the clearing account method of processing the payroll into the
From the summary of payroll register of Maxwell Small for the month ended 28 January 2022 shown in figure 14.30, you are required to prepare:a using the direct method, the cash payments journal for
Using the PAYG Withholding tax tables weekly rates, what is the PAYG withholding and net pay for the following weekly wages?a $300 with no tax file number declaration b $202 with tax-free threshold c
a What are the differences between the following employment-related terms?– Awards and enterprise or other registered agreements– Employer superannuation contributions and employee superannuation
Payroll register totals of Dennis Dadios, for the week ended 19 February 2022 showed:In general journal format only, prepare all the necessary entries needed to process the weekly payroll in the
Using the data below, calculate the PAYG withholding for each employee assuming all have provided taxation number declaration forms and claim the tax-free threshold. Then prepare the weekly payroll
Using the data below, prepare the payroll register for the week ended 15 April 2022 for R Donovan. All employees have provided a tax file number declaration form and claim the tax-free
Complete the payroll register of V Dougherty for the week ended 6 May 2022 using the data below. Ordinarily 35 hours per week are worked. Annual leave hours attract an additional 17.5% leave loading.
Prepare a payroll register for Ralph Edwards for the week ended 9 June 2022 using the data that follows.Leave taken is allocated to the relevant provision account. Deductions totalled:• PAYG
Prepare the payroll register of Allan Jones for the week ended 16 July 2022. An ordinary week consists of 38 hours.Overtime is paid at 1½. Each employee contributes 8% of their ordinary gross as
The fortnightly payroll register of Vic Hair for the four weeks ended 26 August 2022 is as shown in figure 14.44:Using the direct method, prepare an extract of the cash payments journal for each of
For the week ended 23 September 2022, prepare the payroll register of Marek Bowman using the information provided (see figure 14.45). An ordinary week is 35 hours. Assume all employees have completed
From the payroll summary of Henry M Thomas for the week ended 7 October 2022, prepare a payroll register. Ordinary hours are 35 hours per week. Assume all employees have provided a tax file number
From the summary for Max Major of gross pay and deductions for the four weeks ended 28 November 2022 (see figure 14.47), you are required to prepare general journals and cash payment journals
From the payroll data for Felicity Anna you are required to prepare payroll registers for each of the four weeks of November 2022. All employees have submitted tax file number declaration forms and
Which of the following entities do you think would have the greatest proportion of working capital held as accounts receivable?a. Local convenience storeb. Wholesaler of computersc. Farmer selling
Which of the following entities do you think would have the greatest proportion of working capital held as inventory? Why?a. Local convenience storeb. Wholesaler of computersc. Farmer selling
During 2018, Coconut Plantations Pty Ltd continued to grow. Jo Geter, the manager, decided to add detergents to its existing range of soap and candles. The management accountant, Nick Gee, expressed
Refer to the article in the chapter relating to the Commonwealth Bank. Discuss the reasons why the Board has linked executive remuneration to customer satisfaction ratings.
Screen Industries manufactures two products: Alpha and Beta. Both products are produced on the same assembly lines and packaged with 20 units of product per package. The predicted sales are 320,000
What factors are taken into consideration in determining an appropriate ARR?
Coconut Plantations Pty Ltd is contemplating acquiring a new machine to be used for a relatively short period until its new factory is built with computerised equipment installed. Two machines are
How does inflation impact on the setting of discount rates?
Defco Constructions is offered two contracts on the same day for building a new retirement village and a new library complex respectively. The contracts promise total profits of $11 million and $14
The directors of Indratno and Felix, a partnership of investors, have three independent investment projects before them for consideration. Each will cost $400,000 in the first instance. The net cash
A small industrial machine costs $124,000 and is expected to earn annual net cash inflows of $54,600, $49,600, $44,600 and $39,700, before it wears out sufficiently to be unreliable and must be sold
Consider the reality check ‘IBM and HP are looking at diversification, but where should you invest?’.Requireda. Discuss the risks and the potential benefits for IBM and HP in boosting investment
Which of the following entities do you think would have the greatest proportion of working capital held as cash?a. Local convenience storeb. Wholesaler of computersc. Farmer selling vegetables at a
How can a profitable fast-growing entity such as Erin and Kate be chronically short of cash?
Erin and Kate has on average $200,000 of employees’ pay, tax withheld and superannuation contributions in its hands at all times. What use should it make of these funds?
Coconut Plantations Pty Ltd manufactures sustainable coconut-based products for sale to wholesalers and retailers around Australia and New Zealand. Jo Geter, the manager, has a goal of increasing the
Explain, with numerical examples, four aspects of an entity’s credit policies and how decisions regarding each impact on the value of accounts receivable at any time.
Water Solutions Pty Ltd operates three divisions that supply products and services relating to water. The two older divisions produce and supply water hardware such as pumps, pipes and tanks. The new
Global Resources is a division of an international conglomerate. The following information relates to its performance.Requireda. Calculate the divisional margin for the year.b. Calculate the Du Pont
Coconut Plantations Pty Ltd manufactures sustainable coconut-based products for sale to wholesalers and retailers around Australia and New Zealand. Jo Geter, the manager, has a goal of increasing the
The balance sheet and statement of profit or loss for Coconut Plantations Pty Ltd are presented below.The weighted average cost of capital is 15 percent.RequiredCalculate the EVA.
You work for a fruit and vegetable manufacturer that has three distinct divisions: juice, canned and fresh. Rewarding performance has been on the agenda for the last few management meetings, and it
Information for the three divisions of the Birdsville Corporation follows.RequiredAssuming that the tax rate is 30 percent, calculate the EVA for each division.
Coconut Plantations Pty Ltd manufactures coconut-based products and commenced operations in 2016. Production and sales have grown consistently since commencing operations. Here are data for the last
Distinguish between rights and options.
Chico Chocks Ltd is a listed company with 60 million shares issued. It wants to raise more capital by means of a rights issue. The current market price is $12 and the subscription price is $10. The
JB Hi-Fi Ltd’s 2015 balance sheet provides the following data.In 2015, JB Hi Fi Ltd earned record revenue (increased by 4.8 per cent), and the EPS increased by 7.4 per cent. JB Hi-Fi Ltd’s profit
Why measure organisational performance?

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