Accounting Worksheets

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Workshop 2
Questions
Module 2: Introduction and the accounting cycle II
Question 1
The following transactions were undertaken by Huntington Services during the
month of March 2022. Ignore GST.
1. Invoiced a client for providing advice on current employment legislation,
$1800.
2. Paid salaries to staff, $4300.
3. H. Huntington invested a further $25 000 additional capital into the business to
ensure it has sufficient cash to continue operations.
4. Purchased new office furniture and equipment on credit for $8 500.
5. Invoiced a client for $9000 for providing advice regarding an industrial dispute
they had with their employees.
6. Paid $640 electricity account the day the account was received.
7. Paid for the equipment purchased above.
8. H. Huntington withdrew $2000 from the business bank account for personal use.
Required
Indicate with the appropriate letter (a-e) whether each of the transactions resulted in:
(a)
an increase in assets and a decrease in assets
(b)
an increase in assets and an increase in liabilities
(c)
an increase in assets and an increase in equity
(d)
a decrease in assets and a decrease in liabilities
(e)
a decrease in assets and a decrease in equity
(f)
an increase in liabilities and a decrease in equity
(g)
an increase in equity and a decrease in liabilities.
Question 2 – Reflection (Minimum 100 words, Maximum 200 words)
Why is it important for a professional accountant to understand double entry
accounting and the ‘debit and credit rules’? Accounting software processes all
transactions, so it is pointless to understand double entry accounting and accounting
cycle. Discuss these two points.
Question 3
The 31 May 2020 trial balance of Amy Wait, an IT expert, is shown below.
Trial Balance
as at 31 May 2020
Account
Cash at bank
Accounts receivable
Supplies
Prepaid insurance
Furniture and equipment
Accounts payable
Electricity account
payable
Unearned revenue
A. Wait, Capital
Debit
$105 000
$48 000
$12 300
$8 200
$260 600
Credit
$9 700
$9 500
$2 900
$314 960
A. Wait, Drawings
Services revenue
Salary expense
Electricity expense
Rent expense
$161 200
$462 00
$170 300
$ 9 460
$24 000
$799 060
$799 060
The following transactions were completed during June (consider GST).
June
1
Purchased supplies on credit for $5800.
3
Received $24 400 from patients as payment on account.
6
Paid the electricity expense of $9500, previously recorded.
10
Performed services for $2000 that was recorded previously as unearned
revenue.
14
Recorded revenue of $178 600 in cash and $13 650 on credit.
20
Purchased furniture for $15 400, paid by electronic transfer.
23
Withdrew $60 000 from the business for personal use.
24
Paid creditors $7000.
26
Purchased insurance policy for $24 000 to cover business assets.
27
Received $12 000 from patients as payment on account.
29
Recorded revenue of $124 600 in cash and $25 000 on credit.
30
Paid rent of $24 000.
Required
i. Prepare journal entries to record each transaction.
ii. Open T accounts for the accounts shown in the trial balance.
iii. Enter the 31 May balance in each account.
iv. Post the journal entries to the T accounts.
v. Prepare a trial balance as at 30 June 2020.
Question 4 – Accounting applied to the real world
Download Woolworth’s latest Annual report available at the link below and answer
the following questions:
https://www.woolworthsgroup.com.au/page/investors/ourperformance/reports/Reports/
a. What are the elements you can observe in the balance sheet?
b. What is the yoy (year-over-year) change in the total assets, liability and
equity?
2118AFE Principles of Accounting and Analytics
Copyright © 2021 Griffith University. All rights reserved.
Workshop 3
Questions
1
Artisan Furniture Ltd incurred the following actual costs during the year just ended:
Direct material used $410 500
Direct labour 180 000
Manufacturing overhead 378 000
The firm’s predetermined overhead rate is 210 per cent of direct labour cost. The inventory balances, on
1 January, were as follows:
Raw material $47 000
Work in process 61 500
Finished goods 65 000
Each of these inventory balances was 10 per cent higher at the end of the year.
Required:
A. Prepare a schedule of cost of goods manufactured.
B. What was the cost of goods sold for the year?
C. Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution
will change if the following data change: direct material used was $409 000 and raw material
inventory on 1 January was $43 000.
2.
Geoff Walker has recently been hired as a cost accountant by Imprint Pty Ltd, a producer of a range of 3D
printers and associated peripherals. During his first few months on the job, Walker discovered that Imprint
has been underapplying factory overhead to the work in process account, while overstating expenses
through the general and administrative account. This practice has been going on since the start of the
company, which is in its sixth year of operation. The effect in each year has been favourable, having a
material impact on the company’s tax position. No internal audit function exists at Imprint, and the
external auditors have not yet discovered the underapplied factory overhead.
Prior to the sixth-year audit, Walker pointed out the practice and its effect to Gina Grey, the chief financial
officer, and asked her to let him make the necessary adjustments. Grey directed him not to make the
adjustments but to wait until the external auditors had completed their work and see what they
uncovered. The sixth-year audit was completed, and the external auditors once again failed to discover the
underapplication of factory overhead. Walker again asked Grey for approval to make the required
adjustments, which was refused once again. Walker maintains that the adjustments should be made and
that the external auditors should be informed of the situation.
Since there are no established policies at Imprint for resolving ethical conflicts, Walker is considering one of
the following three courses of action:
1. Follow Grey’s directive and do nothing further.
2. Attempt to convince Grey that the proper adjustments should be made and the external auditors
advised.
3. Advise the audit committee and supply appropriate accounting data to provide evidence of the problem.
Required:
A. For each of the three courses of action that Geoff Walker is considering, explain whether or not the
action is appropriate.
B. Independent of your answer to requirement 1, assume that Geoff Walker again approaches Gina
Grey for approval to make the necessary adjustments and is unsuccessful. Describe the steps that
Geoff Walker should take to resolve this situation.
3.
Juicy Ltd produces a mixed-berry fruit drink, in 250 ml bottles. Production takes place in three
departments:
first mixing, then bottling and finally packaging. The manufacturing costs for each department for March
were:
Mixing
Bottling
Packaging
Direct materials
$129 000
$45 000
$15 000
Direct labour
50 400
23 700
12 900
Manufacturing overhead
58 500
6 000
2700
In March the output of the mixing department was 7 500 litres, the output of the bottling department was
30 000 bottles, and the output of the packaging department was 30 000 packed bottles. There are no work
in process inventories.
Required:
A. What is the cost per litre of fruit drink produced by the mixing department for March?
B. What is the cost per filled bottle produced by the bottling department for March (including the
cost of the solution produced in the mixing department)?
C. What is the cost per packed bottle produced by the packaging department for March (including the
cost of the filled bottles produced in the bottling department)?
D. What information do you obtain from estimating the cost per bottle, using requirements 1 to 3
above, that is not available from calculating an average cost per bottle?
E. Prepare the journal entries to record the production costs for March. Assume that the costs of the
three production departments are charged to separate work in process inventory accounts.
F. Do you recommend that the company use a single work in process inventory account or separate
work in process inventory accounts for each production department? Explain your answer.
4.
Woodchuck Timber Pty Ltd grows, harvests and processes timber for use in the building industry. The
following data relate to the company’s sawmill during June:
Work in process, 1 June:
Direct material $ 130 000
Conversion 360 000
Costs incurred during June:
Direct material $ 850 000
Conversion 1 380 000
The equivalent units for June were as follows:
Weighted average
FIFO
Direct material
14 000
8 500
Conversion
3 480
2 000
Required:
A. Calculate the cost per equivalent unit for both direct material and conversion during June. Use
weighted average process costing.
B. Repeat requirement 1 using the FIFO method.
5.
The following data relate to Twilight Manufacturing Ltd: During July, 133 500 units were completed and
transferred out.
Work in process, 1 July: 15 000 units* (* Complete as to direct material; 35% complete as to conversion)
Direct material $ 16 350
Conversion 43 425
Costs incurred during July:
Direct material $169 050
Conversion 240 300
The equivalent units for July were as follows
Weighted average
FIFO
Direct material
154 500
139 500
Conversion
145 500
140 250
Required:
A. Calculate each of the following amounts using weighted average process costing:
I.
II.
cost of goods completed during July
cost of the 31 July work in process inventory.
B. Repeat requirement 1 using the FIFO method.
2114AFE Management Accounting and Strategy
Copyright © 2022 Griffith University. All rights reserved.
Workshop 4
Questions
Module 4: Inventory and Retail Operations
Question 1
ABC Ltd has the following information related to its inventory for December:
Date
Item
Quantity
Unit Cost
210
1st December
Beginning Inventory
15
6th December
Sale
12
9th December
Purchase
6
250
16th December
Purchase
2
240
26th December
Sale
10
30th December
Purchase
14
255
ABC Ltd uses a perpetual inventory system with FIFO costing.
Required:
Complete the following inventory record below.
Inventory Record
Purchases
Date
Quantit
y
Unit
Cost
Cost of Sales
Total
Cost
Quantit
y
Unit
Cost
Inventory on Hand
Total
Cost
Quantit
y
Unit
Cost
Total
Cost
TOTAL
Question 2
Assume that Merryland’s Markets had an inventory balance of $32 570 at the close
of the last accounting period. The following sales and purchase transactions are for
the current period. Consider GST.
1. Purchased goods on account for $27 190.
2. Returned part of the above purchase that had an original purchase price of
$1590.
3. Paid for the balance of the purchase in time to receive a discount of 2% of
the purchase price.
4. Sold goods costing $24 900 for $49 820. Cash of $23 000 was received, with
the balance due on account.
5. Goods sold on credit for $2023 (cost $1010) were returned.
Required
1. In two columns (side-by-side), prepare general journal entries assuming:
i. a periodic inventory system is used.
ii. a perpetual inventory system is used.
2. Suppose that a physical count of the inventory at the end of the current
period shows inventory of $30 000 to be on hand. Present the entries (if any)
required under each inventory system to adjust for any discrepancy.
Comment on which system would best disclose any discrepancy.
Question 3
Seaforth Sunglasses had the following transactions in December. The beginning
inventory on 1 December consisted of 320 pairs of sunglasses at $80 each. Assume
Seaforth Sunglasses is registered for GST (GST to be considered).
December
3
Purchased 302 pairs of sunglasses for $80 each on credit.
9
Returned 10 pairs of sunglasses that had scratches in the lenses.
14 Sold 190 pairs of sunglasses for $150 each on account.
26 A customer returned 3 pairs of sunglasses sold on 14 December.
27 Sold 64 pairs of sunglasses for $160 each on account.
31 A physical inventory count shows 358 pairs of sunglasses on hand at a total cost of
$28 640.
Required
Prepare journal entries to record the transactions, assuming that a perpetual
inventory system is used.
2118AFE Principles of Accounting and Analytics
Copyright © 2021 Griffith University. All rights reserved.
Workshop 3
Solutions
Module 3: Accrual accounting, revenue recognitions and expense
recognition criteria
Question 1
Selected accounts of Amanda’s Art Supplies are shown below at 30 June of the current year before
any adjusting entries have been made.
Additional information
1. Prepaid insurance represents premiums for 1 year paid on 1 April.
2. Supplies of $340 were on hand at 30 June.
3. Shop shelving, which had been purchased on 1 January, is expected to last 10 years and have a
residual value of $4000.
4. Amanda collected 4 months’ rent in advance on 1 June from a number of tenants.
5. Accrued salaries not recorded as at 30 June are $4200.
Required
(a) Record in the general journal the necessary adjusting entries on 30 June.
Solution
AMANDA’S ART SUPPLIES
General Journal
Date
June
30
Particulars
Insurance Expense
Debit
Credit
1 125
Prepaid Insurance
1 125
Insurance expired. ($4500 × 3/12)
Supplies Expense
380
Supplies
380
Supplies used. ($720 – $340)
Depreciation Expense – Shop Shelving
1 000
Accumulated Depreciation
1 000
– Shop Shelving
Depreciation on office equipment.
($24 000 – $4000)/10 × 6/12 = $1000)
Unearned Rental Fees
1 200
Rental Fees Revenue
1 200
Rental fees earned for one month.
($4800 ÷ 4)
Salaries Expense
Salaries Payable
Accrued salaries.
4200
4200
Question 2
Patisserie Services purchased a trailer on 1 July 2019 for $26 200. It was estimated to have a useful
life of 5 years and a residual value at the end of that time of $2800.
Required
(a) What is the depreciation expense for the year ended 30 June 2020?
(b) What is the balance of the Accumulated Depreciation account at the end of June 2021?
(c) What is the carrying amount in the statement of financial position at 30 June 2020 and at 30 June
2021?
(d) Explain why an entry is made to the Accumulated Depreciation account rather than to the Trailer
account.
Solution
(1) Depreciation expense for the year ended 30 June 2020
= ($26 200 – $2800)/5
= $4680.
This assumes that the trailer was used at an even rate throughout the year.)
(2) The Balance of the Accumulated Depreciation account after two years of service is $9360.
(3) The carrying amount of the trailer is:
Trailer (companion account)
Accumulated depreciation (contra
account)
Carrying amount
Year ended
Year ended
30 June 2020
30 June 2021
$26 200
$26 200
(4 680)
(9 360)
$21 520
$16 840
(4) An entry is made to the Accumulated Depreciation account in order to keep the Trailer account
recorded at its original cost. The Accumulated Depreciation is a contra account to the Trailer account,
which is then deducted in the statement of financial position from the Trailer account to show the
carrying amount at the end of each accounting period. By disclosing both accounts in the statement,
the reader is able to assess the approximate age of the asset held by the entity. For instance, it can be
seen that the Accumulated Depreciation account in 2021 is larger than in 2020, thus showing that,
since more depreciation has been written off the asset, the asset is now older and the entity has not
replaced it with a new one.
Question 3
Which of the following statements concerning accrual accounting is correct?
1. Expenses are recognised in the period after which the consumption of costs can be measured in a
faithful, verifiable manner.
2. Expenses are recognised in the period in which the consumption of costs can be measured in a
faithful, verifiable manner.
3. Income from sales is recognised in the period when the cheque is cashed.
4. For most businesses the cash approach gives a better measure of economic performance than
does the accrual approach.
2. Expenses are recognised in the period in which the consumption of costs can be measured
in a faithful, verifiable manner.
Question 4
The trial balance of Chelsea Elliott, marketing services provider, at 30 June 201 9 was as follows (ignore GST).
Required:
(a)
Using the following information, prepare adjusting entries. Use the accounts shown in the trial
balance and these additional accounts: Salaries Payable, Interest Payable, Telephone Account Payable,
Depreciation Expense, Office Supplies Expense, Insurance Expense, Interest Expense.
1)
2)
3)
4)
5)
6)
7)
8)
Interest expense of $520 has accrued on the loan payable.
A physical count of office supplies on 30 June shows $560 of unused supplies on hand.
Depreciation of the office equipment this year is estimated to be $1020.
Half the amount in the Unearned Fees account had been earned by the end of the year.
The amount in the Prepaid Rent account covers this June and the next 2 months.
Of prepaid insurance, 80% expired this period.
Salaries expense accrued for the last 4 days in June amounts to $1660.
The telephone expense for June of $670 has not been recorded or paid. No tax invoice has been
issued.
(b)
Open T accounts for the accounts shown in the trial balance and enter the 30 June balance in each
account. Post the adjusting entries to the T accounts as well as the closing entries.
(c)
Prepare an adjusted trial balance, an income statement and a statement of financial position.
(a)
CHELSEA ELLIOTT, MARKETING SERVICES
General Journal
Date
Particulars
Debit
Credit
Adjusting entries
2018
30 June
1.
Interest Expense
520
Interest Payable
520
Accrued interest on loan payable
2.
Office Supplies Expense
3 460
Office Supplies
3 460
Office supplies used
3.
Depreciation Expense – Office Equipment
1 020
Accumulated Depreciation – Office
Equipment
1 020
Depreciation on office equipment
4.
Unearned Fees
550
Fees Revenue
550
Fees revenue received previously, now earned
5.
Rent Expense
700
Prepaid Rent
700
Rent expense for June
6.
Insurance Expense
2 184
Prepaid Insurance
2 184
Insurance prepaid now expired
7.
Salaries Expense
1660
Salaries Payable
1660
Accrued salaries payable
8.
Telephone Expense
670
Telephone Account Payable
670
Telephone expense for June
(b)
Cash at Bank
30/6
Balance
$7 780
Accounts Receivable
30/6
Balance
$21 700
Prepaid Rent
30/6
Balance
$2 100 (5)
Rent expense
$700
Prepaid Insurance
30/6
Balance
$2 730 (6)
Insurance
expense
$2 184
Office supplies
exp
$3 460
Office Supplies
30/6
Balance
$4 020 (2)
Office Equipment
30/6
Balance
$12 200
Accumulated Depreciation – Office Equipment
30/6
Balance
$2 470
(3)
Dep’n exp
1 020
Accounts Payable
30/6
Balance
$2 800
Interest Payable
(1)
Interest expense
$520
Telephone Account Payable
(8)
Telephone
expense
$670
Salaries Payable
(7)
Salaries
expense
$1 660
Balance
$1 100
Balance
$9 200
Unearned Fees
(4)
Fees revenue
$550 30/6
Loan Payable
30/6
C. Elliott, Capital
30/6
Balance
$22060
C. Elliott, Drawings
30/6
Balance
$52 000
Fees Revenue
30/6
Balance
(4)
Unearned fees
$138 400
550
Salaries Expense
30/6
Balance
$57 200
(7)
Salaries
payable
1 660
Telephone Expense
30/6
Balance
(8)
Telephone
expense
$6 100
670
Rent Expense
30/6
Balance
(5)
Prepaid rent
$10 200
700
Interest Expense
(1)
Interest
payable
$520
Depreciation Expense – Office Equipment
(3)
Accum dep’n
$1 020
Office Supplies Expense
(2)
Office supplies
$3 460
Insurance Expense
(6)
Prepaid
insurance
$2 184
(c)
CHELSEA ELLIOTT, MARKETING SERVICES
Adjusted Trial Balance
as at 30 June 2018
Account
Cash at bank
Accounts receivable
Prepaid rent
Prepaid insurance
Office supplies
Office equipment
Accumulated depreciation – office
equip
Accounts payable
Dr
Cr
$7 780
21 700
1 400
546
560
12 200
$3 490
2 800
Interest payable
520
Telephone account payable
Salaries payable
670
1 660
Unearned fees
Loan payable
C. Elliott, Capital
550
9 200
22 060
C. Elliott, Drawings
Fees Revenue
52 000
Salaries expense
58 860
Telephone expense
Rent expense
Interest expense
Depreciation expense – office
equipment
6 770
10 900
520
Office supplies expense
Insurance expense
138 950
1 020
3 460
2 184
$179 900
$179 900
CLOSING ENTRIES
Fees Revenue
30/6
Balance
(4)
Unearned fees
CE(1) 138950
$138 400
550
138950
Salaries Expense
30/6
Balance
$57 200
(7)
Salaries
payable
1 660
58860
58860
CE(2)
6770
CE(2)
10900
CE(2)
520
CE(2)
Telephone Expense
30/6
Balance
(8)
Telephone
expense
$6 100
670
6770
Rent Expense
30/6
Balance
(5)
Prepaid rent
$10 200
700
10900
Interest Expense
(1)
Interest
payable
$520
Depreciation Expense – Office Equipment
(3)
Accum dep’n
$1 020
1020
CE(2)
Office Supplies Expense
(2)
Office supplies
$3 460
3460
CE(2)
Insurance Expense
(6)
Prepaid
insurance
$2 184
2184
CE(2)
Income Summary
(CE2)
83714 138950
(CE3)
55236 55236
CE(1)
C. Elliott, Drawings
30/6
Balance
$52 000 52000
(CE4)
C. Elliott, Capital
52000
(CE4) 30/6
(CE3)
Balance
$22060
55236
25296
CHELSEA ELLIOTT, MARKETING SERVICES
Income Statement
for the year ended 30 June 2018
INCOME
Fees revenue
$138 950
LESS EXPENSES
Salaries expense
$58 860
Telephone expense
6 770
Insurance expense
2 184
Rent expense
Interest expense
10 900
520
Office supplies expense
3 460
Depreciation expense
1 020
83 714
PROFIT
$55 236
CHELSEA ELLIOTT, MARKETING SERVICES
CURRENT ASSETS
Cash at Bank
Statement of Financial Position
as at 30 June 2018
CURRENT
LIABILITIES
$7 780
Accounts payable
Accounts
receivable
21 700
Telephone payable
546
Salaries payable
1 400
Unearned fees
560
$31 986 NON-CURRENT
LIABILITIES
Loan payable
Prepaid insurance
Prepaid rent
Office supplies
Total Current Assets
NON-CURRENT
ASSETS
Office equipment
Accum. depr.
Total Assets
Interest payable
12 200
(3 490)
$2
800
520
670
1 660
550
Total Liabilities
8 710 EQUITY
C. Elliott, Capital
$40 696 Total L+E
2118AFE Principles of Accounting and Analytics
Copyright © 2021 Griffith University. All rights reserved.
6 200
9 200
15 400
25 296
40 696
Financial Accounting
Cycle
Statements
Transctions
Module 1: Introduction and the Accounting Cycle |
This module introduces you to financial accounting vs management accounting, accounting income vs taxable income, the
accounting cycle, transaction analysis and the double entry system and the accounting equation.
ACCRUAL
ACCOUNTING
Module 3: Accrual Accounting, Revenue Recognition and Expense Recogntion
Criteria
In this module we will look at accrual vs cash basis accounting, the criteria of revenue and expense recognition, adjusting entries,
adjusted trial balance and closing entries.
Module 2 AV
Documents
Journals
Financial
Reports
ACCOUNTING
CYCLE
Module 2: Introduction and the Accounting Cycle II
We will now move on the second part of our introduction and the accounting cycle to look at the chart of account, journals, ledgers
and the trial balance.

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