Questions and Answers of Accounting for Business

Dash Delivery Co. Ltd operates a freight service and is planning the next year’s operation. The company’s assets are estimated to be $$30$ 400 000 at the beginning of the financial year and
Pierre Ltd is a catering business owned by well-known chef Pierre Boudin. It is organised as two divisions, each with its own manager. There is the Shop Division, managed by Louise Lane, that runs
Wilde Marketing Partnership, marketing consultants, is considering a project requiring considerable expansion of its current operations. This will require the purchase of equipment at a cost of
Medrano Ltd is a furniture manufacturer. The company is looking at three alternative specialised machines to replace its existing production line. Data for each of the machines are as follows.The
Chester Constructions is an engineering consulting firm specialising in the installation of electronic communications systems. The company is considering the purchase of testing equipment that will
Flasher Freight Ltd is considering three investments for the new year. The company has a cost of capital of 12%. Summary information concerning the net cash inflows of the investments and their
Brighten BBQs Pty Ltd makes large barbecues and sells them through specialist barbecue stores and outdoor furniture stores. Brighten BBQs Pty Ltd has been approached by a national department store,
What are the main differences between activity-based costing and traditional costing?
Fine Furniture Ltd, which specialises in the manufacture of custom-built furniture, uses a job order costing system. On 1 March, the company had no beginning work in process inventory. During March,
Retro Furniture Pty Ltd uses a job order costing system. The September cost data were as follows.Machine hours for September were 55 700 hours, and the business applies factory overhead to production
Beautiful Bottles Pty Ltd, bottle manufacturer for the food industry, has just installed a job order costing system. The company uses machine hours to apply its overhead to work in process. On 1 May
Brand Value Advertisements Pty Ltd, a marketing firm, uses a job order costing system to charge its clients. The firm specialises in marketing work for small local businesses in Melbourne such as
Fine Furniture Ltd had a balance in its Work in Process Inventory account on 1 October 2025 of $27 200 made up of two jobs: Job 730, $12 800; and Job 731, $14 400. At the end of October, costs
Crystal Clean Ltd produces a dishwashing liquid. At the beginning of January, 63 000 litres of liquid cleaner were in process, 100% complete as to raw materials and 40% complete as to conversion
Cheese Please Ltd produces cheese topping for the fast pizza industry. At the beginning of April, 20 000 kilograms of cheese topping was in process, 100% complete as to raw materials and 60% complete
Green Consultants Pty Ltd specialise in consulting on landscape design. The company developed a predetermined charge-out rate based on hours for each of its consultants on 1 July 2025 to assign the
Reliable Professionals Pty Ltd is a firm that offers a wide variety of professional services such as marketing, employment of professionals for other firms and accounting services. The firm has the
Innovative Technologies Ltd uses a job order costing system to control costs in its two production departments. Factory overhead is applied on the basis of machine hours in the Construction
A job order cost sheet for Sustainable Manufacturing Ltd is shown below.Required (a) What was the balance in Work in Process Inventory on 1 January if this was the only unfinished job? If
The August 2025 transactions of Jackson Productions Ltd, which uses a job order costing system, are shown below. (Ignore GST.)1. Raw materials purchased, $171 000.2. Raw materials issued to
Abbott Ltd produces a chemical used to clean showers in a single process in the Production Department. Raw materials in the form of chemicals are added at the beginning of the process, and a litre
Smith and Sons Pty Ltd accounts for its manufacturing costs using a job order costing system and has provided the following production data during April 2025.• Job Z241 was in process as of 1 April
German Chocolates Ltd produces blocks of chocolate. Raw materials in the form of cocoa solids, milk and sugar are added at the beginning of the process, flavouring, fruit and nuts are added half-way
Debits and Credits is a public accounting firm specialising in auditing local medium-sized businesses. Fees charged for each audit are determined on the basis of identifiable hours worked on an audit
Chiu Ltd prepares bulk supplies of Singapore noodles using two departments, a Blending Department and a Packaging Department. The finished product is sold in large quantities to retailers that
Hotbox Ltd produces pizza boxes using two processes — cutting and packaging. The production budget for the year ending 30 June 2025 estimated raw materials use of $400 000, factory overhead of $270
Refer to the Hotbox Ltd production process details in problem 21.25.Required Explain in detail, using the facts from Problem 21.25 why it is most appropriate for Hotbox Ltd to use a process costing
Tiny Computers Ltd began producing netbooks on 1 July 2025. A unit of production passes through two processes — manufacturing and finishing. Production data for the month of July are presented
Tasty Turkish Delights Ltd produces desserts. Production is carried out in three processes — mixing, baking and packaging. The work in process accounts for the three processes for the month of
Tsoulos, Tsoulakis and Associates is a small firm of architectural consultants. At 1 July 2024, three architects other than the principals, Tony Tsoulos and Maria Tsoulakis, are employed. The
Eco Manufacturing Ltd produces timber felling machines for the forestry industry around the world. Its two machines are the Tree Toppler, which cuts down trees and clears undergrowth, and the Timber
Fantastic Feathers Ltd sells feather quilts and has never used CVP analysis in its 4‐year history. The manager provides you with the following sales and cost data for the first 4 years of
The accountant for Fast Deliveries Ltd accumulates the following data concerning a mixed cost using kilometres as the activity level.RequiredCompute the fixed and variable cost elements using the
Baxter Manufacturing Ltd has determined total factory overhead costs at both minimum and maximum levels of production — 100 000 machine hours and 150 000 machine hours respectively. The total
Smart Phones Pty Ltd produces mobile phones. The company prepared the following budgeted income statement.The director, Thomas Smith, wants to use this income statement as the basis for projecting
Outdoor Experiences Pty Ltd runs camps for school children and sporting clubs that provide 3 days of canoeing, horse riding, abseiling and skiing. As a graduate with a sports and recreation degree,
Use the same information for Outdoor Experiences Pty Ltd in exercise 22.7. The accountant can’t make decisions on the future of the company without your authority as manager, so he believes it is
Prime BBQ Ltd sells a single product, a gas barbecue. The barbecue sells for $$960$ per unit. Annual fixed costs are $$1$ 536 000, and the contribution margin rate is 40%.Required(a) What are the
Cruz Manufacturing Ltd’s sales slumped badly in 2025. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 600 000
Soles Ltd sells two types of shoes, sandals and sneakers. During the financial year ended 30 June 2025, fixed costs were $$230$ 400 and sales were in the ratio of three units (pairs) of sandals to
Aussie Sporting Company Pty Ltd produces two types of sporting balls: basketballs and footballs. During the year ended 30 June 2025 it sold the balls in the proportion of three basketballs for every
Smith Ltd has prepared the following information showing the actual contribution margin earned from the sale of its only product, and the planned contribution margin.RequiredCalculate the sales price
Assume you are the marketing manager for Smith Ltd in exercise 22.14, and the accountant explains that when the actual results were compared with budget results he found a favourable sales price
The factory overhead of Best Production Ltd has fluctuated significantly from year to year in relation to the direct machine hours. The average costs at the average high and low levels of activity
Short Clips Pty Ltd produces television advertisements for local businesses. Provided information is as follows.The company is supposed to achieve a 15% profit margin (profit ÷ marketing fees) and
AEK Ltd has prepared its income statement, summarised below, for the year ended 30 June 2025.The company is evaluating three independent situations and has asked for your assistance.Required(a) If
North Shore Childcare Ltd plans to open a day care centre at the beginning of next year. A building has been leased and the company has estimated that the following annual costs will be
Copeland Hotels Ltd provide three levels of rooms in their hotels. The following planning data are provided for the year ended 31 December 2026:Fixed hotel overhead costs are $$24$ 360 000 per
Natural Cosmetics Pty Ltd has provided the following planned per-unit cost and sales data for the year ended 30 June 2026.Fixed factory overhead costs are $$1$ 056 000 per year, and the annual
Retro Furniture Ltd suffered a severe drop in sales and profit performance for the year ended 30 June 2025. The income statement revealed that net sales were $$1$ 500 000 with a profit of $$310$
Details of Troy Horse Ltd’s income statement for the past year are as follows.RequiredConsider each of the following independent situations.(a) Determine the company’s break-even point in units
TMP Human Resource Consulting had the following contribution margin income statement for the year ended 2025.RequiredAnswer each of the following independent situations.(a) Explain how an
Sports Consulting Pty Ltd is a company set up by sports and recreation management students to gain experience in running their own business. It had the following data for the year ended
Fine Candles Ltd has prepared the following draft profit analysis for the current year.RequiredAnswer each of the following four independent situations.(a) If the company’s manager is considering
The manager of Quality Fabricators Ltd has just reviewed the income statement for the previous quarter and is concerned by the profit earned. Her main concern is the significant difference between
Below is a list of transactions completed by Recycled Fashion during 2024. Ignore GST. For each transaction, indicate(a) the section (i.e. operating, investing or financing) of the statement of cash
The information below was taken from the accounting records of Practicum, who uses the accrual basis of accounting.Required(a) Calculate the amount of cash collected from customers during 2024.(b)
The simple statement of financial performance for Jack’s Blinds is shown below.Required (a) Prepare the net cash flows from operating activities for the year ended 30 June 2025 for Jack’s Blinds
The following transactions were undertaken by Voyager Ltd during the financial year ended 30 June 2024 (ignore GST):1. Took out a new long term loan, $$1$ 000 000.2. Purchased a building
Following are the descriptions of changes in selected accounts and other events for Krimp Café Pty Ltd.Required (a) Indicate whether each item should be added (A) to or deducted (D) from profit when
Kim Khan has been in business as a sole trader for the past 5 years. The comparative statements of financial position for the years 2024 and 2025 and a summarised statement of financial performance
The personal training business owned by David Hella made the following cash transactions during the reporting period. Ignore GST.Required (a) Prepare a statement of cash flows using the direct method
The comparative statements of financial position of Borra Services as at 30 June 2024 and 2025 and the statement of financial performance for the year ended 30 June 2025 are shown overleaf.Additional
The financial statements for the business of Trinh’s Nail Supplies for the past two years are presented below.Additional information1. All purchases and sales of inventories are on credit. All
The following comparative statements of financial position and statement of financial performance are for the business of Low Dollar Shop Pty Ltd.Additional information 1. All sales and purchases of
The financial statements for the business of Autocare are shown below.Required (a) Prepare the statement of cash flows for Autocare for the year ended 30 June 2025, using the direct method.(b)
Comparative statements of financial position as at 31 December 2025 and 2024 and the statement of financial performance for 2025 for C. Dion are set out below.Required (a) Prepare a statement of cash
Opposite are the comparative statements of financial position of Foxbell Ltd as at 30 June 2024 and 2025, and the statement of financial performance and statement of changes in equity for the year
Some of the most recent financial statements for Hyland Pty Ltd are shown below.Additional information 1. All purchases and sales of inventories are on credit.2. On 1 July 2024, the shareholders
Below are the comparative statements of financial position of Lunar Ltd.Required Prepare a statement of cash flows for the year ended 30 June 2025 in accordance with the direct method. Include any
The statement of cash flows for Digital Business Ltd follows.Required (a) Explain the information that would be presented in Note 20 of Digital Business Ltd’s financial statements.(b) Explain the
Financial figures of the business of K. Towd for the last 2 years are shown below.Additional information 1. During the year ended 30 June 2025, Towd withdrew $$60$ per week in cash for 52 weeks for
The comparative statement of financial position of the partnership of Ken and Barby as at 30 June 2024 and 30 June 2025 were as follows.Required Prepare a statement of cash flows for the partnership
A & L Mechanics is operated by Adrian and Len in partnership. Financial data for the partnership follow.Additional information 1. All profits/losses are shared equally by Adrian and Len who also
The simplified financial statements of SPS Ltd appear below.Additional information 1. Dividends declared and paid were $$26$ 400.2. During the year equipment was sold for $$10$ 200 cash. The
After calculating the current ratio for an entity and finding that the ratio’s value was 0.5:1, a student decided that the company was in a sound position for paying its liquid liabilities. Respond
Discuss how, in choosing the accounting methods below, the following ratios can be affected — return on assets, quick ratio, profit margin, asset turnover:(a) a change in accounting method for
Some believe that the top three ratios that every technology company needs to understand and track are the quick ratio, debt to equity ratio, and gross profit margin. Describe each of these ratios
Explain the association between the return on equity and the gearing ratio.
Using the latest information for Kogan.com Limited, an online retailer, describe and illustrate the difference between equity value and enterprise value
Niagra Ltd reported the following financial data over a 5-year period.Required (a) Prepare a trend analysis of the data using 2021 as the base year.(b) Graph the trends and discuss if the trends
The asset section of the statement of financial position and notes thereto of Megabus Ltd is shown below.Required (a) Calculate the changes in dollar amounts and percentages for the company. Cash
Comparative figures from the statement of financial performance of Misty Ltd are shown below.Required (a) Prepare common size statements for the company for both years, and comment on any significant
Comparative figures from the statement of financial position for Warder Ltd are shown below.Required (a) Prepare common size statements for the company for both years, and comment on what this
The following information has been extracted from the financial statements and the notes of Champigon Ltd.Required (a) Calculate the following for 2023 to one decimal place:i. current ratio ii. quick
The following information has been extracted from the financial statements and notes thereto of Bass and Dide Ltd, consultants.Required (a) Calculate the following ratios for 2025:i. return on assets
The following information relates to the operations of Emile Luxury Ltd. The profit was $2 750 000. The company distributed preference dividends of $50 000, and ordinary dividends of $300 000. Over
Pedro’s Parts Ltd’s statement of financial position (extract only) on 30 June 2023 is set out below.Required (a) Calculate the current and quick ratios.(b) A loan agreement entered into by the
You are provided with the following information from the statement of cash flows for Precedent Ltd. Required (a) Calculate the following cash sufficiency ratios for Precedent Ltd for 2025 and
The Principles for Responsible Investment (PRI) in their ESG integration in listed equity: A technical guide (2023) defines ESG integration as ‘the process of including ESG factors in investment
Tick Ltd and Tock Ltd both began operations on 1 January 2025. For illustrative purposes, assume that at that date their statement of financial positions was identical and that their operations
Comparative data extracted from the general purpose financial statements and notes thereto of Express Delivery Ltd are presented below.Required (a) Prepare a trend analysis of the data.(b) Comment on
Certain items taken from the financial statements, the notes thereto and other records of Lucky Nine Ltd have been expressed as percentages of net revenue. Required (a) By what percentage did the
Bolten Ltd completed the following transactions during a given year:Required (a) State whether each transaction would cause the ratio listed with the transaction to increase, decrease or remain
Consider Company A and Company B that are both all equity financed and have identical enterprise values.Required (a) Assume that asset values remain but Company A has $50 000 in debt and $15 000 cash
The following information relates to the business of Restaurant Gigi, and the owner is concerned about the profitability and financial structure of his business at 30 June 2025, especially since the
Financial statements of iPud Ltd are presented below.Additional information 1. Payables includes $5620 (2025) and $5730 (2023) trade accounts payable; the remainder is accrued expenses.Market prices
The following values relate to various ratios determined for a sole trader, A. Solve, for the year ended 30 June 2025. At that date, the total assets in the statement of financial position was $1 200
The following financial statements were prepared for the management of Satay Ltd. The statements contain some information that will be disclosed in note form in the general purpose financial
The comparative financial statements of Stratum Ltd are shown below.Required (a) Calculate the changes in the financial statements from 2024 to 2025 in both dollar amounts and percentages.(b) Prepare

Showing 100 - 200 of 750