Vous êtes sur la page 1sur 6

ACCT1511 AFM 1B

SOLUTIONS TO FINAL EXAM, JUNE 2009

QUESTION 1
1.

Depreciation expense included in Other Expenses account (3 Marks):


Accumulated depreciation - Buildings

Disposal

81,000

o/bal

29,000

Depn exp

65,000

c/bal

45,000
(1 mark)

Accumulated depreciation - Equipment

Disposal

67,000

o/bal

9,000

Depn exp

33,000

c/bal

43,000

Total depreciation expense = 29,000 + 9,000 = 38,000

(1 mark)

(1 mark)

QUESTION 1 (CONT.)
2. Operating cash flows for JNT Ltd. using indirect method (7 Marks):

JNT Ltd.
Operating Cash Flows for Year Ended 30 June 2008
Net profit
+
Depreciation expense
+
Loss on disposal of buildings
Gain on sale of equipment

0.5
0.5
0.5
0.5

38,000
19,000
(16,000)

Adjustment for changes in operating assets and liabilities:


Accounts receivable
0.5
Allowance for doubtful debts
1
+
Inventory
0.5
Prepaid insurance
0.5
Accounts payable
0.5
Accrued expenses
0.5
Income tax payable
0.5

(90,000 )
(11,000)
150,000
(6,000 )
(15,000)
(2,000 )
(2,000)

Cash from operations

257,000

41,000
298,000

24,000
322,000

1 mark for general format (i.e., start with the NPAT and adjusting for both
permanent and timing differences to get at the CFO).

Note:

For all the adjustments for permanent differences, there is no need to check the
accuracy of the figures as they are either given in the question or carried over
from Part(1) above. Just check the sign and the item included in the adjustment.
For the adjustments relating to timing differences, make sure to check the sign,
item and figure of the adjustment.

Question 2 (8 marks)
(1) Three issues (2 marks for each point)

Level 3 assets are potentially misstated, and at 6% of total assets, if it is worth nothing could
almost wipe out shareholders equity.

The off-balance sheet assets of $160 billion, or 7% of total assets itself approximates shareholders
equity of $167 billion.

The total derivative exposure of 380% of risk based capital, exceeds shareholders equity.

(2) Possible conclusion (2 marks)

There is significant risk of JPM insolvency as the losses from level 3 assets (6% of total assets,
i.e., almost value of shareholders equity), and possible losses from derivatives (380% of
shareholders equity) cumulatively exceed shareholders equity.

Question 3 (6 marks) NOT EXAMINABLE TOPIC CORPORATE GOVERNANCE

Question 4 (6 marks)
Kang Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 2008
Direct materials
Beginning raw materials inventory
Purchases of raw materials
Total raw materials available
Ending raw materials

$ 25,000
200,000
$225,000
35,000

Raw materials used

$190,000 (2 marks)

Direct labour
Overhead

175,000

Indirect labour

$ 35,000
10,000
55,000
25,000
15,500
$140,500
(10,500)

Indirect materials
Depreciation
Maintenance
Miscellaneous
Less: Underapplied overhead
Overhead applied

(1 marks)
(2 marks)
130,000

Total manufacturing costs added


Add: Beginning work in process
Total manufacturing costs
Less: Ending work in process
Cost of goods manufactured

$495,000
110,000
$605,000
80,250
$524,750 (1 mark)

Supporting calculation for under-applied overhead:


Applied ($5.20 x 25,000)
Actual:

Indirect labour

$130,000

$35,000

Indirect materials

10,000

Depreciation

55,000

Maintenance
Miscellaneous

25,000
15,500

140,500
$ 10,500

Under-applied overhead

QUESTION 5 (10 Marks)


Echo Systems
January
Sales Budget (2 marks)
Budgeted sales (units)
Budgeted selling price per unit
Budgeted sales revenue

February

March

April

60,000
70

80,000
70

100,000
70

80,000
70

4,200,000

5,600,000

7,000,000

5,600,000

Cash receipts budgets are no longer examinable in 1B (for 2015)


Cash Receipts Budget (2 marks)
Budgeted cash receipts:
From December sales
From January sales
From February sales
From March sales
From April sales
Total budgeted cash receipts

4,000,000
2,100,000

2,100,000
2,800,000

2,800,000
3,500,000

6,100,000
0.5

4,900,000
0.5

6,300,000
0.5

60,000
20,000

80,000
25,000

100,000
20,000

80,000
(15,000)

105,000
(20,000)

120,000
(25,000)

Budgeted production (units)

65,000

85,000

95,000

Raw Materials Purchases Budget (3 marks)


Budgeted production (speakers)
Expected usage of audio cable per speaker (units)

65,000
8

85,000
8

95,000
8

520,000
136,000

680,000
152,000

760,000

656,000
(104,000)

832,000
(136,000)

Purchase requirement for audio cable (units)


Price per unit

552,000
0.4

696,000
0.4

Purchase cost of audio cable

220,800

278,400

Production Budget (3 marks)


Budgeted sales (units)
Add: Desired ending inventory of finished units
Total units required
Less: Beginning inventory of finished units

Audio cable usage requirements (units)


Add: Desired ending inventory of audio cable (units)
Total audio cable requirements (units)
Less: Beginning inventory of audio cable (units)

3,500,000
2,800,000
6,300,000
0.5

QUESTION 6: MC QUESTIONS

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

A
A
D
D
D or E both awarded marks
A
D
A
E
B
A
D
C
E
E
D
C
D
D
B
6