ACCT5001_ccounting Principles_2009 Semester 1_1-2009 Final Exam Practice Questions.docVIP

Final Exam Practice Questions – Semester 1 2009 Some final exam practice questions are provided below. The exam paper requires you to state any assumptions and show all calculations. Question 1 Below are the financial statements for Manouk Manufacturers Ltd for the year ended 30 June 2002. Income Statement Sales revenue 2,460,000 Cost of goods sold 1,400,000 Gross profit 1,060,000 Gain on sale of plant 30,000 Bad debt expense 10,000 Interest expense 100,000 Depreciation expense 25,000 Operating expenses 435,000 Profit before tax 520,000 Income tax expense 150,000 Profit after tax 370,000 Balance Sheet 2001 2002 Change Cash 210,000 90,000 -120,000 Accounts receivable 145,000 50,000 -95,000 Inventory 180,000 200,000 +20,000 Prepayments 25,000 15,000 -10,000 Land 700,000 800,000 +100,000 Plant and equipment 600,000 820,000 +220,000 Accumulated depn (200,000) (215,000) +(15,000) Accounts payable 120,000 140,000 +20,000 Accrued liabilities 55,000 50,000 -5,000 Income tax payable 115,000 80,000 -35,000 Bank loan payable 250,000 200,000 -50,000 Capital 400,000 550,000 +150,000 Retained earnings 720,000 740,000 +20,000 Additional information: a) Land with a market value of $100,000 was acquired by issuing shares. b) Plant and equipment with an original cost of $30,000 was sold for $50,000 cash. c) Bad debts expense of $10,000 were written off directly against accounts receivable. Required: 1) Prepare a statement of cash flows using the direct method. 2) Prepare a reconciliation of profit after tax to net cash flow from operations. Question 2 Beta Ltd Balance Sheet 31/12/x0 31/12/x1 Change Accounts Receivable 80000 151000 +71,000 Less: allowance for bad debts 0 (3000) (+3,000) Inventories 140000 170000 +30,000 Prepaid expenses 4000 4000 0 Land 0 50000 +50,000 Equipment 84000 114000 +30,000 Less: Accumulated Depreciation (44000) (22000) (-22,000) Bank overdraft 4000 50000 +46,000 Accounts payable 60000 100000 +40,000 Accrued e