It Is Recommended That You Spend a Total of 40 Minutes on This Question

This question assesses Criterion 2and is worth 66 marks.

It is recommended that you spend a total of 40 minutes on this question.

This question contains TWO parts. You must answer BOTH parts.

Your answers must be written in the space provided on the answer booklet for this question.

(a)The following is a list of transactions that occurred for Derwent Valley Shopsduring the financial year ended 30 June 2015.

Date / Transaction
15/2/15 / Owner introduced the following assets and liabilities to the business. Cash $4,000, Equipment $50,000, Account Payable – EPG Food Distributors $4,400, Loan $40,000
8/3/15 / Cash sales was $8,800, GST inclusive. Cost price of the goods sold was $5,000 (excluding GST).
12/4/15 / Paid Insurance $4,950
16/4/15 / Paid wages $2,000
12/5/15 / Customer was paid a cash refund of $88 (GST inclusive) for inventories with a cost price of $40.
18/5/2015 / Purchased inventories from EPG Food Distributors $3,850 (on account)
25/5/2015 / Paid EPG Food Distributors $4,400
18/6/15 / The owner took out stock to the value of $55 (including GST) and $220 cash

(i)Prepare the General Journal entries for the above transactions (28 marks (1 mark per line, plus 1 mark each for Dates, Debits first, Indenting and 2 marks for Narrations – Total of 33 marks)

Examine the following accounts from the General Ledger of Ishka Furnishings and Homewares. NOTE: The below Account is presented in both T-Account and Columnar format.

Asian Importers

2015 / 2015
30/7 / Bank(B) / 15,000 / 1/7 / Balance(A) / 25,000
1/8 / Inventories/GST (C) / 44,000

Asian Importers

Date / Particulars / Debit / Credit / Balance / DR/CR
1/7/2015 / Balance (A) / 25,000 / 25,000 / CR
30/7/2015 / Bank (B) / 15,000 / 10,000 / CR
1/8/2015 / Inventories / GST (C) / 44,000 / 54,000 / CR

(ii) Explain who Asian Importers are and what entry (A) represents to Ishka Furnishing and Homewares: (2 marks)

(iii) Write out the General Journal entry for entry (B) (including narration) (3 marks)

(iv) Write out the General Journal entry for entry (C) (including narration) (4 marks)

(b)

Instructions:

For cheque number 113 the difference between the Bank and our records is due to a bank error.

The deposit shown on the Bank Statement as $4900 is the correct figure. Our records show it as $4500, which is an error made by us.

(i) Complete the Cash at Bank Account (6 marks)

(ii) Prepare the Bank Reconciliation Statement (10 marks)

(iii) Explain the purpose of preparing a Bank Reconciliation Statement, using threeexamples from Cutie Cups. (8 marks)

a)(i)

Date / Particulars / Type ↓↑ / Debit / Credit
Date / Particulars / Type ↓↑ / Debit / Credit
Date / Particulars / Type ↓↑ / Debit / Credit
Date / Particulars / Type ↓↑ / Debit / Credit

a)(ii) …………………………………………………………………………………………………….

………………………………………………………………………………………………………...

a)(iii)

Date / Particulars / Type ↓↑ / Debit / Credit

a)(iv)

Date / Particulars / Type ↓↑ / Debit / Credit

b)(i)Extract from the General Ledger of Cookie Cups

Cash at Bank Account

Date / Particulars / $ Debit / $ Credit / $ Balance / Dr or Cr

Bank Reconciliation Statement for Cookie Cups as at June 30

b)(iii) …………………………………………………………………………………………………….

………………………………………………………………………………………………………...

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