ACCOUNTING AND INFORMATION SYSTEMS – ACC1AIS (Semester 1,
2015) Total marks = 30
NOTE: Part A is due on the 7 May and Part B is due on the 28 May
PART A Individual assignment (Due Date: Thursday, 7 May) (15/30)
Question 1
Find the 2010 JB Hi-Fi annual report from the library and answer the following
questions:
a. At JB Hi-Fi’s year-end, what was the inventory on the balance sheet? What
was the cost of sales for the year?
b. Refer to note 1 in the annual report. How is inventory valued?
c. What proportion of total assets was made up of inventory?
d. Calculate inventory turnover and days in inventory for 2010. How does this
compare with Fantastic Holdings and Nick Scali on page 284 from Carlon, S.,
Mladenovic R., Palm, C., Kimmel, P., Kieso , and D. E., Weyandt, J.,
Accounting: Building Business Skills, 4th Edition, John Wiley & Sons Australia
Ltd.
Question 2
Johanna and Jake Berkvom own Campus Fashions. From its inception Campus
Fashions has sold goods on either a cash or credit basis, but no credit cards have
been accepted. During the past several months, the Berkvoms have begun to
question their credit sales policies. First, they have lost some sales because of their
refusal to accept credit cards. Second, representatives of two banks have
convinced them to accept their credit cards. One bank, City Bank, has stated that
(1) its credit card fee is 4% and (2) it pays the retailer 96 cents on each $1 of sales
within 3 days of receiving the credit card billings.
The Berkvoms decide that they should determine the cost of carrying their own
credit sales. From the accounting records of the past 3 years they accumulate
these data:
2015 2014 2013
Net credit sales $600 000 $720 000 $480 000
Collection agency fees for slowpaying
customers
2 940 3 000 1 920
Wages of part-time accounts
receivable clerk
4 560 4 560 4 560
Credit and collection expenses as a percentage of net credit sales are as follows:
uncollectable accounts 1.6%, invoicing and mailing costs 0.5%, and credit
investigation fee on new customers 0.15%.
Johanna and Jake also determine that the average accounts receivable balance
outstanding during the year is 5% of net credit sales. The Berkvoms estimate that
they could earn an average of 10% annually on cash invested in other business
opportunities.
Required
Answer the following:
(a) Present calculations for each year showing total credit and collection
expenses in dollars and as a percentage of net credit sales.
(b) Determine the net credit and collection expenses in dollars and as a
percentage of sales after considering the revenue not earned from other
investment opportunities. (Note: The interest revenue lost on the cash held
by the bank for 3 days is considered to be immaterial.)
(c) Discuss both the financial and non-financial factors that are relevant to the
decision.
Question 3
On 1 July 2012, Engineering Ltd purchased land $1 200 000 and buildings $500 000.
The estimated useful life of the buildings was 40 years, with a residual value of nil.
On 1 October 2012 machinery was purchased at a total cost of $120 000. The
estimated useful life of the machinery was 4 years with an estimated residual value
of $9000. Engineering Ltd uses straight-line depreciation for buildings and the
diminishing-balance method for machinery. The entity's reporting period ends on 30
June.
Required
(a) Prepare journal entries to record the purchase of the land, buildings and
machinery during the year.
(b) Prepare journal entries to record the depreciation expense for the year ended
30 June 2013.
(c) Assume that on 1 July 2013 the entity revalued the land upwards by $200 000
and the buildings downwards by $25 000. Prepare the journal entries for the
revaluations.
(d) On 31 December 2013, owing to a change in product mix, the machinery was
sold for $50 000. Prepare the journal entry(ies) to dispose of the machinery.
Question 4
The intangible assets information of Elmo Ltd as at 31 December 2013 is
presented here:
Patent ($80 000 cost less $8000 amortisation) $ 72 000
Copyright ($64 000 cost less $25 600 amortisation) 38 400
Total $110 400
The patent was acquired in January 2013 and has a useful life of 10 years. The
copyright was acquired in January 2010 and also has a useful life of 10 years.
The following cash transactions may have affected intangible assets during 2014:
Jan. 2 Paid $13 500 legal costs to successfully defend
the patent against infringement by another
company.
Jan. – June Developed a new product, incurring $180 000 in
development costs.
A patent was granted for the product on 1 July,
and its useful life is equal to its legal life.
Sept. 1 Paid $45 000 to a footballer to appear in
commercials advertising the entity's products. The
commercials will air in September and October.
Oct. 1 Acquired a copyright for $200 000. The copyright
has a useful life of 50 years.
Required
(a) Prepare journal entries to record the transactions.
(b) Prepare journal entries to record the 2014 amortisation expense for
intangible assets.
(c) Calculate the carrying amount of the intangible assets reported in the
statement of financial position at 31 December 2014.
(d) Prepare the note to the financial statements on Elmo Ltd's intangible
assets as of 31 December 2014.
PART B Group Assignment (4 students/group) (Due Date: Thursday, 28 May)
(PART I, II and III = 10/30; PART IV = 5/30)
Create a fixed assets register for a Fictitious Manufacturing Firm (financial year
end = end of June)
PART I. Set up a fixed assets register for this manufacturing firm using Microsoft
Excel with the following details:
? The company set up its asset register in year 2010.
? It must include at least four categories of assets.
? In each category of assets, it must have at least 200 items.
? Assets are located in 3 different branches, Melbourne, Sydney and Adelaide.
? It must include the individual asset cost price, asset ID, asset item, date of
purchase, depreciation method (straight line or diminishing value),
depreciation rate, accumulated depreciation value, and carrying amount (book
Value).
? If assets are disposed in the current year, disposal date and disposal value
are also needed.
PART II. Set up the solutions for the following queries based on the fixed assets
register created in part a (Microsoft Excel functions i.e. filtering, vlookup (hlookup)
and pivot tables must be used at least once in the solution).
i. What are the total depreciation expense (from 1 July 2014 to 30 June
2015 only), accumulative depreciation and net asset value at the end of
the financial year, 30 June 2015 for the respective assets in each
location and category?
ii. Show all the assets in Melbourne branch which were purchased after
30 June 2012 and their respective cumulative carrying amount (book
value).
iii. Predict the depreciation expense and total carrying amount (book
value) at the end of June 2016 and at the end of June 2017, assuming
no additional purchase or disposal after 30 June 2015 for each branch
(show the subtotal amount for each categories in each branch).
iv. Show all the assets disposed from the Sydney branch in 2014 with
their respective accumulative depreciation and carrying amount (book
value).
PART III. Write a short report (maximum 600 words) stating the followings:
? Describe the movement of assets in the company from 2010 to 2015 based
on your findings in PART II and justify the choice of depreciation method
used.
? Explain how filtering, vlookup (hlookup) and pivot tables in Microsoft Excel
help you in your analysis.
PART IV.
Each student must evaluate each team members individually within the team
according to the peer evaluation matrix (see below).
Peer Evaluation Matrix
Evaluator’s Name: _________________
Team Member being evaluated: ___________________
Category 4 3 2 1 Total
Works towards
team goal
Student
consistently
works toward
team goals
Student works
toward team
goals most of
the time
Student works
toward team
goals all the
time
Student does
not work
towards team
goals
Role
Performance
Student
effectively
performs
assigned role
within the group
Student
adequately
performs
assigned role
on a consistent
basis
Student
adequately
performs
assigned role
some of the
time
Student does
not perform
assigned role
within the
group
Working with
others
Listens to,
shares with, and
supports the
efforts of others.
Tries to keep
people working
well together.
Usually listens
to, shares with,
and supports
the efforts of
others. Does
not cause
“waves” in the
group.
Often listens
to, shares with,
and supports
the efforts of
others, but
sometimes is
not a good
team member
Rarely listens
to, shares
with, and
supports the
efforts of
others. Often
is not a good
team player
Attitude Never is publicly
critical of the
project or the
work of others.
Always has a
positive attitude
about others
and the task(s)
Rarely is
publicly critical
of the project
or the work of
others. Often
has a positive
attitude about
others and the
task(s)
Occasionally is
publicly critical
of the project
or the work of
others in the
group. Usually
has a positive
attitude about
others and the
task(s)
Often is
publicly
critical of the
project or the
work of
others in the
group. Often
has a
negative
attitude about
others and
the task(s)
Preparedness Brings needed
materials to the
group
discussion and
is always ready
to work
Almost always
brings needed
materials to
the group
discussion and
is ready to
work
Almost always
brings needed
materials to
the group
discussion but
sometimes
needs to settle
down and get
to work
Often forget
needed
materials or
is rarely
ready to get
to work
Time
Management
Routinely uses
time well
throughout the
project to
ensure things
get done on
time. Group
does not have
to adjust
deadlines or
work
responsibilities
because of this
person’s
procrastination
Usually uses
time well
throughout the
project, but
may have
procrastinated
on one thing.
Group does
not have to
adjust
deadlines or
work
responsibilities
because of this
person’s
procrastination
Tends to
procrastinate,
but always
gets things
done by the
deadlines.
Group does
not have to
adjust
deadlines or
work
responsibilities
because of this
person’s
procrastination
Rarely gets
things done
by the
deadlines
AND group
has to adjust
deadlines or
work
responsibilitie
s because of
this person’s
inadequate
time
management