Essay on CA 2015 Q1 Mid Sem Exam SOLUTIONS GUIDE 1

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200400 COMPANY ACCOUNTING

Q1, 2015

MID-SEMESTER EXAM – SOLUTIONS GUIDE

PART A
Question 1 (5 marks)
(a)
See lecture slide 14, Topic 1:
Statement of Financial Position
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes

(b)
See lecture slide 6, Topic 1: providing information to users who are unable to command the preparation of reports tailored to their particular information needs

Also refer to Chapter 4, Problem 4.15, p.89 (H/W Topic 1):
GPFRs are designed to satisfy the common information needs of a wide range of users and potential users.

Question 2 (20 marks)
See Demonstration Problem, Topic 2

SATURDAY PTY LTD
Statement of Cash Flows for the year ending 30 June 2014
$
Operating activities
Cashreceipts from customers
Payments to suppliers and employees
Cash flow from operating activities
Investing activities
Proceeds from sale of land
Proceeds from sale of plant
Payment for plant
Cash flow from investing activities
Financing activities
Dividends paid
Cash flow from financing activities
Net increase in cash
Cash at beginning of year
Cash at end of year

33,720
(28,100)
5,620
16,800
1,440
(7,200)
11,040
(5,500)
(5,500)
11,160
(6,000)
5,160

weconciliation of net cash from operating activities to net profit after tax
13,060
trofit after tax bon-cash items
(4,800)
Less: gain on sale land
360
Add: loss on sale plant
2,400
(2,040)
Add: depreciation expense aovement in current assets and liabilities
(1,600)
Increase on accounts receivable
(200)
5ecrease in allowance doubtful debts
(4,800)
Increase in inventory
1,200
Increase in accounts payable
(5,400)
5,620
Cash flow from operating activities

Note 2: Reconciliation of cash and cash equivalents
At start of year
Bank overdraft

(6 000)

Cash at bank

CA – mid semester

Page 1

At end of year
-

-

5 160

(6 000)

5 160

Quarter 1, 2015

Question 3 (20 marks)
See SQ3-2

1. Calculation of Current Tax Consequences for Y/E 30 June 2014

(8 marks)

Calculation of taxable income and current tax liability Y/E 30 June 2014
97,200 }
} Tax Expense

Accounting Profit Before Tax
Permanent differences:
Add back: Goodwill impairment
Entertainment
Subtract: exempt dividend revenue

16,000
2,000
(8,000)

Temporary differences:
Doubtful debts expense
Bad debts written off
Insurance expense
Insurance paid
Accounting Depreciation-machinery
Tax Depreciation-machinery
Warranty expense
Warrnty paid
LSL expense
LSL paid
Taxable Income

CA – mid semester

4,000
(4,400)
10,000
(6,800)
32,000
(40,000)
14,000
(4,000)
12,000
- 18,800

Page 2

107,200 } = 107,200 x 30% =

32,160

(400)
3,200
(8,000)
10,000
(6,800) Tax Payable
105,200 } = 105,200 x 30% =

Quarter 1, 2015

31,560

2. Worksheet…