Student No: ____________________________ Teacher: Cortez/ Lucas/ Hogarth-Scott (circle one)
VCE Accounting – Unit 1
Written examination 2023
Reading time: 15 minutes
Writing time: 2 hours
QUESTION BOOK
Structure of book
Number of questions Number of questions to Number of marks
be answered
3 3 90
Total 90
• Students are permitted to bring into the examination room: pens, pencils, Non-CAS calculators, highlighters,
erasers, sharpeners and rulers.
• Students are NOT permitted to bring into the examination room: blank sheets of paper, dictionaries and/or white-
out liquid/tape.
• No CAS calculators are allowed in this examination.
Materials supplied
• Question and answer book.
• Additional space is available at the end of the book if you need extra paper to complete an answer. Clearly label
all answers with the appropriate section and question number.
Instructions
• Write your student number and your teacher’s name in the spaces provided above on this page.
• All written responses must be in English.
Students are NOT permitted to bring mobile phones and/or any other unauthorised electronic devices into
the examination room.
QUESTION 1: SOUTHERN STAR BUILDINGS (16 MARKS)
Jim Jackson owns and operates Southern Star Buildings, a small business that builds small structures
such as pergola’s, carports, and garages for households in south-east Melbourne. During 2023,
Southern Star Buildings has taken out a new loan to help with the purchase of machinery used and a
second-hand van.
As at 31 March 2023, South Star Buildings had the following account balances.
Accounts Receivable $6,300
Accounts Payable $550
Machinery $20,500
Bank $2,040
Van $13,400
GST Payable $930
Loan— Mutual bank $15,000
Inventory of Materials $13,200
Wages Owing $450
Additional information
• Loan repayments of $500 are made to Metro Mutual on a monthly basis.
• Debt Ratio as at March 2022 was 20%
• Working Capital ratio as at March 2022 was 1.5 times
• Net Profit for March 2022 was $2 890 while Drawings were $600
Required:
a. Prepare a classified Balance Sheet for Southern Star Buildings as at 31 March 2023. 7 marks
b. Referring to a Qualitative Characteristic, explain why the Balance Sheet does not identify each
individual Accounts Receivable of Southern Star Buildings. 3 marks
c. Calculate the Working Capital Ratio of Southern Star Buildings as at 31 March 2023. 1 mark
(Round to two decimal points)
d. Calculate the Debt Ratio of Southern Star Buildings as at 31 March 2023. 1 mark
(Round to two decimal points)
e. Discuss the liquidity and stability of the firm. 4 marks
2
QUESTION 2: TOP TEACHERS (39 MARKS)
Lawrence Landy owns a tutoring business called ‘Top Teachers’. He provides tutoring services on a
cash and credit basis. All purchases are made in cash. He has provided the following information for the
month of June 2022.
June
1 Purchased supplies from Officeworks for $550 including GST (Chq. 233)
2 Provided tutoring services for $2 400 plus GST (Rec. 21)
5 Paid rent of $6 600 including GST (EFT 789)
11 Lawrence contributed $3 000 to the business (EFT 901)
17 Paid wages of $2 100 (Chq. 234)
19 Received a GST refund from the ATO of $700 (EFT 872)
21 Purchased supplies from Bookworks for $800 plus GST (Rec. x78)
22 Purchased furniture for $4 400 including GST (Chq. 235))
28 Received a loan for $4 000 from ANZ Bank (EFT 204)
30 Provided tutoring services for $6 600 including GST (Rec. 22)
30 Paid wages of $950 (Chq. 236)
Additional information:
• Credit fees for June 2022 were $4 400 including GST
• Bank Balance as at 1st June 2022 was $1200
• Current liabilities were $2 200 as at 1st of June and 2 400 as at 30th June 2022
• Cash Flow Cover for June 2021 was 1.4 times
Required:
a. Record the transactions in the relevant cash journal. 12 marks
b. Explain the effect of the transaction on June 1st on the accounting equation. 2 marks
c. Explain how supplies meets the definition of an Accounting Element. 3 marks
d. Prepare a Cash Flow Statement for the month of June 2022. 7 marks
e. Calculate the Cash Flow Cover for the month of June 2022. 1 mark
f. Based on your responses to question ‘d’ and ‘e’, analyse the cash position of ‘Top Teachers’ for
the month of June 2022. 5 marks
g. Calculate the GST balance as at 30 June 2022. 2 marks
h. Based on your calculation of GST in ‘g’ and with reference to an accounting element, explain
how GST would be reported in the Balance Sheet. 3 marks
i. Outline two strategies the business could implement to safeguard their cash from theft. 4 marks
3
QUESTION 3: SURVIVOR GYM (35 MARKS)
Cal Kestis owns and operates ‘Survivor Gym’, a business providing coaching services in self-defence
and various martial arts. He runs a small dojo in South Melbourne but also provides self-defence classes
for corporate entities and government services. He has provided you with the following information:
Survivor Gym
Statement of Receipts and Payments (extract) for January 2023
Cash Receipts
Coaching fees 11,980
Loan – SW Bank 10,000
Capital Contribution 2,000
GST received 1,198
Cash Payments
Wages 12,000
GST Paid 250
Loan principal 400
Interest on Loan 200
Insurance 280
Rent 2,100
Advertising 120
Drawings 4,500
Additional Information
• As at 1st January 2023, Survivor Gym had a Capital balance of $37,500
• Survivor Gym had the following Accounts Receivable balances as at 31st December 2022:
o Cere International $2,100
o Mr D. Gara $ 880
• The following Accounts Payable balances were also present at 31 st December 2022:
o Greez Group $1,320
o Rayvis sporting goods $ 900
• All credit purchases were for materials for January 2023
• Opening materials balance was $500 and closing materials balance was $600
4
Cal has also provided you with a list of transactions that were NOT recorded for the month of January
and DO NOT appear in the statement of receipts and payments extract:
Date Description
3 Jan Credit Sales to Cere International for $5,000 plus $500 GST (Inv CK9)
6 Purchased materials worth $660 inclusive of GST from Rayvis Sporting Goods (Inv
223)
8 Settled the December account with Greez Group (Chq 66)
14 Credit Sales to D. Gara for $1,320 inclusive of GST (Inv CK10)
17 Paid Rayvis sporting goods $550 (Chq 67)
21 Received $4,400 from Cere International (Rec 971)
24 Credit Sales of $1000 plus GST to Tina Merrin (Inv CK11)
26 Purchased materials from the Greez Group for $2,420 including GST (Inv GG7)
28 Purchased materials from Rayvis Sporting Goods for $3000 plus $300 GST (Inv 261)
30 Credit Sales to Cere International for $2,000 plus $200 GST (CK12)
The following source documents were found in Cal’s office and HAVE NOT been recorded:
Survivor Gym
SW Bank
Tax Invoice
Date 31 Jan 2023
Date 27 January 2023
To Greez Group
Rec No: 980
For Accounts Payable
From Tina Merrin
Amount $500
For Account owed
A/C name Survivor Gym
Amount $500
Chq No. 68
Survivor Gym
50 Jedi Lane Tax Invoice
Kew Vic 3012
Invoice CK13
Date 31 January 2023
To B. Akuna
For Self-defence course
Amount $1,650 (including $150 GST)
Signed Brandon Matera
Chq No. 11
Required:
a. Record the above credit transactions in the sales and purchases journal for Survivor Gym for the
month ended 31 January 2023 9 marks
b. Calculate materials used for the month ended 31 January 2023 3 marks
c. Prepare an Income Statement for the period ended 31 January 2023 9 marks
d. Explain two reasons why the Net Profit/Loss for ‘Survivor Gym’ could be lower than the
movement in the bank account for the month of January 2023. 4 marks
e. Calculate the closing balances for both Accounts Receivable and Accounts Payable 6 marks
f. Explain how the business could use the Net Profit Margin to analyse their profitability 2 marks
Cal has decided to contribute his sports car to the business during the month of February. Despite the
fact that his car is old and run down, Cal insists that his car is a ‘collectors item’ and wants to contribute it
to the business at a value that is above the usual market price for this make and model. Cal also insists
that he has upgraded the engine, exhaust and tyres.
g. With reference to a Qualitative Characteristic, discuss the ethical considerations of Cal
contributing his car to the business 2 marks
End of Exam
