UNIT SCHEDULE

WEEKLY ACTIVITIES AND/OR

WEE
BEGIN SYLLABUS READINGS
K
Carey 2nd edition
26th30thFebruary ORIENTATION WEEK

1 2nd
Introduction to accounting Chapter 1
March

2 9h The Elements (cont)

Chapter 1
March Transaction analysis and the recording
Chapter 2
process
3 16th Revisiting the recording process
March Trading firms and recording of stock using Chapter 3
the Perpetual or Continuous method
4 23rd A Trading firms and recording of stock
March using the Physical or Periodic method
Refer to reading list on Moodle
Adjusting the accounts including the
Chapter 4
Asset and Liability Approach to
Prepayments
5 30th Adjusting the Accounts (cont) including
March the Expense and Income approach to Chapter 4
Prepayments Chapter 5
Preparing the Financial Statements
6 Easter Break Friday 3rd April- Sunday
12th April
7 13th Preparing the financial statements(cont)
April Financial statement analysis
-Liquidity/Solvency Chapter 5
TEST & ASSIGNMENT DUE THIS Chapter 6
WEEK

8 20th Financial Statement Analysis-Profitability

April from the Entitys view and Shareholders
view Chapter 6

9 27h
April
Performance measurement Chapter 7

10 4h Cost Information for internal decision-

Chapter 8
May making
11 11th Budgeting and the behavioural implication
May Chapters9
of accounting information
12 18th Introduction to finance and financial Chapter 10
May mathematics
 Chapter 11
13 25th Present Value and its application to Ch 11(Part12)
May Financial Accounting Refer to reading list on Moodle

1nd June 5th June SWOT-VAC

8th -26th June OFFICIAL EXAMINATION PERIOD

MONDAY, EXAMINATION RESULTS

RELEASED JULY 13th
 WWEEK
TO R QUE W/Beg TOPIC READ QUESTIONS
W
/ PIC E STIO
th
E 7 20 April Preparing the Ch 5 Questions: pp218;12,13,15,16,20
B A NS Financial
E
e DTute 7 Statements(cont)
Brief Exercise: pp223;BE 5.11
K Exercise: p223; E 5.11
g
1 2 Intr Problem: p227 P5.7
Introd
n odu uctory
d ctio tutorial Ch 6 Questions: p 263: 6,9,10
M n to with Financial statement Brief Exercises: BE6.7, BE6.8
a AF studen analysis Exercises: p265 E 6.4,E6.6
r C1 ts Solvency/Liquidity
c 000 allocat
h exp Review Test
ed into
8 Financial statement Ch 6 Questions: p263: 4, 7, 13,18
T ect group
27thApril analysis Profitability Exercises: p267, E6.7
u atio s in
t ns/ Tute
tutorial
8 Entity /Owners view Problem: p272: P6.6
e sta 1.Stud Additional Problem3 see below
1 nda ents
9 4th May Performance Ch 7 Questions: p303: 1, 2, 3, 8, 10, 13, 15
rds will
Tute measurement
req work9 Exercises: p304: E7.1, E7.2, E7.3, E7.4
uire togeth
d er in
10 11h May Cost Information for Ch 8 Questions: p330: 1, 2, 5,6, 7
these
Tute 10 internal decision- Exercises: p330-331: E8.2, E8.4,E8.5,E8.6
group
making
s for Problems: 331-333: P8.1,P8.2, P8.4
the
11 18th May Budgeting and the Ch 9 Questions: p359: 1,3,5,9
group
Tute11 behavioural Exercises: p359-360: E9.1, E9.2, E9.3,
prese
implication of E9.5
ntation
accounting
s Additional problem 4and 5 see below
information
which
th
12 25
are May
in Introduction to Chs 10/11 Ch10 Questions: p374: 1, 31, 37, 38, 39,
the finance and financial 41, 42
form mathematics
Tute 12
of In
Ch 11 Questions: p406-409: 2, 3, 7, 8, 14,
Class
20, 25, 28 ,
Exerci
34,36,48,53,59,67,68,69,70,95,97,98,99
ses
(ICE) Additional problem 6 &8 see below
2 9 Wh C Questi 1st June to 5th June Swot Vac
th
at h ons :
M is 1 pp. 8thto 26th June Official Examination Period
a acc 36
r oun TUTORIAL PROGRAM 1st Semester 2015
37: 3,
c ting 4, 11,
h ? 12,
T Co 13,26,
NOTE:
27 Model answers to each set of weekly self-study questions, exercises and problems
u nce
t ptu will be explained and discussed at lectures and tutorials in the following teaching week,
Brief
e al except for the set specified for week 12. The model answers to week 12 self-study
Exerci
2 fra questions,
ses: p. exercises and problems will be posted on Moodle at 5:00pm on the last day the
me semester.
37
wor 38:
k BE1.1,
ele BE1.1
Additional
1
Tute Problems
me
nts
(To be completed as per the Tutorial Program see above)
Broad
ening
your
persp
ective
: p.
39:
BYP1.
1

3 1 Tra C Additi
Additional Tute Problem 1

The following transactions relate to Cybertrax Trading.

The Inventory balance at 1 May was $7500.

Date (2011) Transactions

2 May Purchased inventory costing $2,000, terms 2/14, n/30.
4 May Returned defective goods, which cost $400.
10 May Sold goods for $1,200 (cost price $850), collecting cash of $500.
Credit terms on the remainder of the goods sold were 2/10, n/30.
14 May Paid the amount owed on the 2 May purchase.
26 May Sales of $60 (cost price $40) were returned. These related to the 10
May sale, and a cash refund was given.
31 May A stock-take showed $8200 inventory on hand

Required:

(a) Prepare general journal entries (narrations not required) for the above transactions
assuming:
(i) a periodic inventory system is used; (including entries to record COGS at end of
May.
(ii) a perpetual inventory systems is used
(b) Prepare Income Statements for May under each system

Additional Tute Problem 2

Serry Sausages has provided the following information on the unadjusted balances of its
accounts at the 30th June:
$
Inventory (1 June) 5,500
Sales Revenue 86,800
Sales Discount 800
Sales Returns 1,300
Purchase Expense 41,100
Purchase Discount 600
Purchase Returns 300
Stock at end 5,300
Required:
1. Show how the Cost of Goods Sold and Inventory ledger accounts would look after
completing all appropriate adjusting and closing entries related to inventory.

2. Can a stock loss be determined under periodic (physical) inventory? Justify your
answer.

3. Calculate net sales revenue and gross profit for the month. Show all workings.
 Additional Tutorial Problem 3
You recently won $50,000 in the AFL Super coach competition run by the local newspaper.
You are planning to invest the money and have sought the advice of a local investment
advisor. Your financial advisor has recommended you consider investing in one of the
following two companies: Alpha Ltd and Beta Ltd. Assume your $50,000 investment will buy
an equal share in each business. A number of ratios for each company are presented below:

Alpha Ltd Beta Ltd

Current (Working Capital) Ratio 1.2 : 1 2.5 : 1

Acid Test Ratio (Quick Ratio) 0.8 : 1 1.8: 1

Inventory Turnover 24.4 times 10.1 times

Receivables Turnover 12.2 times 8.6 times

Creditors Turnover 17 times 9 times

Debt to Total Assets 0.60 0.40

Times Interest Earned 5.2 4.9

Return on Owners Equity 40% 20%

Return on Assets 16% 12%

Asset (Sales) Turnover 2.0 0.67

Profit Margin (Return on sales) 8% 18%

Total Assets $1 Mil $1 Mil

REQUIRED:
1. Comment on the liquidity of Alpha Ltd and Beta Ltd.
2. Comment on the solvency of Alpha Ltd and Beta Ltd.
3. Comment on the profitability of Alpha Ltd and Beta Ltd from both the owners' and from the
entitys perspective.
4. Which company would you invest in and why?
Additional Tutorial Problem 4
Tipperary Enterprises has produced the following sales budget for the next six months:

All figures in January February March April May June

$
Sales 10,000 11,000 11,000 12,000 12,000 14,000
Additional information provided:
Cost of sales is 50% of sales revenue
Salaries are $2,000 per month
Office expenses are $500 per month
Sales, cost of sales, salaries and office expenses are paid on a cash basis
Depreciation is 10% per annum on a non-current asset value of $60,000
Capital expenditure of $4,000 is payable in March
Dividends of $1,000 are payable in January

REQUIRED:
1. Prepare a budgeted income statement for the six months.
2. Calculate the budgeted net cash flow for the six months.
Additional Tutorial Problem 5
Buckley is a company with $20,000 in the bank at the beginning of January. The company
has budgeted the following for the next six months:

SALES
January 40,000
February 44,000
March 48,000
April 52,000
May 56,000
June 60,000

Buckley estimates their cost of sales to continue at the current level of 50% of sales. Their
practice is to keep an inventory level of 50% of the following months cost of sales. Assume
Buckleys sales for December were $36,000 and in July were $64,000.
December wages were $10,000 but Buckley anticipates a wage increase in the beginning of
April, which will increase wages from the current level of $10,000 to $12,000. Buckley
budgets rental expenses of $2,000 per month and depreciation at $500 per month.
Sixty per cent of sales are made in cash, with the remainder made on credit. Credit sales
are settled in the month after sale. All purchases of inventory are made on credit and
accounts are paid in the following month. All other expenses are paid in cash. Wages are
paid in the month after the work has been performed by the worker. Rent is paid at the end
of each quarter.

REQUIRED:
1. Prepare a cash receivables budget for Buckley for the next six months (January to June).
Show all calculations.
2. Prepare an inventory and purchases budget for Buckley for the next six months (January
to June). Show all calculations.
3. Prepare a cash payable budget for Buckley for the next six months (January to June).
4. Prepare a cash budget for Buckley for the next six months (January to June). Show all
calculations.
5. You have recently overheard a colleague mention behavioural aspects of budgeting.
Explain in detail what some of the behavioural aspects are. In your answer you should
include a discussion of budgetary participation as well as slack and biases in budgeting.
 Additional tutorial Problem 6
Gargorium Ltd. is a company that owns and operates nurseries. Gargorium is considering
the expansion of two of its current nurseries. The estimated initial cost of expanding the
nurseries and the subsequent increase in cash flows from the expansion is tabulated below:

YEAR NURSERY A NURSERY B

0 $300,000 $250,000

1 $50,000 $45,000

2 $52,000 $47,000

3 $54,000 $49,000

4 $56,000 $51,000

5 $58,000 $53,000

6 $60,000 $55,000

7 $62,000 $57,000

The company considers the expansion of either Nursery A or B to be mutually exclusive.

REQUIRED:
1. What is a mutually exclusive project?
2. Define the term Net Present Value (NPV).
3. What is the NPV decision rule?
4. Draw a timeline that depicts the cash flows for expanding Nursery A.
5. Assuming a discount rate (interest rate) of 8% p.a., what are the NPVs of expanding
nurseries A and B? Show your workings.
6. Which nursery should the company expand and why?
The discount rate of 8% is the companys best guess based on the assumed risk of
the projects. The companys optimistic estimate of the discount rate is 6%.
Recalculate the NPV for both projects using the optimistic discount rate. Which
project should the company now choose and why? Show your workings.
Additional Tute Problem 7
Based on your knowledge of the example given in lectures and the subsequent
discussion ,apply the relevant definition and recognition criteria found in the AASB
Framework for the Preparation and Presentation of Financial Statements to explain
why Qantas could recognise revenue from the sale of frequent flyer points only once
the seat had been used by a passenger.

Additional tute problem 8

ABC Manufacturing Ltd is considering two potential new, mutually exclusive projects.
Company engineers and marketing staff have come up with the following cash flows
as shown in the table below. Both projects have identical lives of 4 years and a
discount rate of 8% p.a. effective is used. Answer the following

a Perform a payback analysis for both projects. Which project would you select
and why?

b What are the strengths and weaknesses of the payback analysis?

c Perform a discounted payback analysis for both projects. Which project would
you select and why?

d Perform a net present value analysis for both projects. Which project would
you select and why?

e If Project A and B were not mutually exclusive, but instead independent, how
might your project selection decision in d) change?

T= 0 T=1 T=2 T= 3 T= 4
Project A
cash flows -$350 $120 $90 $100 $200
($000)
Project B
cash flows -$300 $80 $120 $120 $50
($000)