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Student Name

Teacher LAL PWI

UNIT 2 ACCOUNTING
Area of Study 2: Accounting for and managing accounts receivable and
accounts payable

Friday 11th September 2020

Writing time: 50 minutes

QUESTION BOOK
Structure of SAC
Number of Number of questions Number of
questions to be answered marks
4 4 33 marks

 Students are permitted to bring into the assessment room: pens, pencils, blank sheet of paper, highlighters,
erasers, sharpeners, rulers, and laptop.
 Scientific calculator only is allowed in this assessment room.

Materials supplied
 SAC Question Book of 7 pages
 Excel Answer Book

Students attending this SAC agree to abide by the Balwyn High School VCE assessment policy and the VCAA
assessment guidelines, in particular:
- Students submit work that is their own and they have not sought assistance from any unauthorised means.
- Students do not discuss the assessment material with another person until the assessment is completed. This
will be when the teacher returns results to the student.
- Students do not share the assessment material with any other person until the assessment is completed. This
will be when the teacher returns the results to the student.

Students who are found to have breached one or more of the above rules will be penalised in accordance with
the Balwyn High School VCE assessment policy and the VCAA assessment guidelines.
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Question 1 – Patterson’s Pianos (7 marks)

Jack Patterson owns and operates Patterson’s Pianos.

The following source documents for July 2020 are yet to be recorded.

a. Explain one ethical issue Patterson’s Pianos should consider before choosing to purchase
inventory from Schubert’s.
2 marks
b. Record each of the source documents in the Journals provided.

You are not required to total the Journals.

5 marks
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Question 2 – Daisy’s Desks (7 marks)

Daisy Richardson owns Daisy’s Desks.

As at 1 August 2020 Daisy’s Desks had the following Accounts Payable balances.

Herlaar $9 900 Iadanza $7 920

Daisy has provided the following information for August.

Purchases Journal

Inv. Inventory GST Accounts

Date Accounts Payable No. Payable

09/08 Phillip Knight 86 3 400 340 3 740

11/08 Herlaar 234 11 600 1 160 12 760

24/08 Phillip Knight 91 4 700 470 5 170

31/08 Totals 19 700 1 970 21 670

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Cash Payments Journal

Date Details Chq. Bank Accounts Wages Sundries GST

Payable

03/08 Rent 772 2 750 2 500 250

05/08 Herlaar 773 9 702 9 702

14/08 Wages 774 1 900 1 900

19/08 Shelving 775 5 830 5 300 530

28/08 Wages 776 2 340 2 340

29/08 Herlaar 777 4 000 4 000

31/08 Totals 26 522 13 702 4 240 7 800 780

Additional information

 On 5 August 2020, Daisy’s Desks was granted a discount of $198 from Herlaar.

 On 6 August 2020 Daisy’s Desks returned 4 ‘Nicholson’ desks to Iadanza and was
given a credit of $440 including GST per desk (Credit Note 34).

a. Complete the Accounts Payable record of Herlaar for August 2020.

4 marks

b. Prepare the Accounts Payable Schedule as at 31 August 2020.

3 marks
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Question 3 – Brooke’s Bookcases (13 marks)

Brooke Jowett owns Brooke’s Bookcases.

Brooke has provided the following information.

Purchases Journal (summary)

Inv. Inventory GST Accounts

Date Accounts Payable No. Payable

30/09 Totals - 4 800 480 5 280

Sales Journal (summary)

Inv. Sales GST Accounts

Date Accounts Receivable No. Receivable

30/09 Totals - 8 900 890 9 790

Cash Receipts Journal (summary)

Date Details Rec. Bank Accounts Sales Sundries GST

Receivable

30/09 Totals - 32 286 7 546 13 400 10 000 1 340

The items in the Sundries column include:

Capital $4 000

Loan – MNC Bank $6 000

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Cash Payments Journal (summary)

Date Details Chq. Bank Accounts Inventory Wages Sundries GST

Payable

30/09 Totals - 17 540 5 225 2 800 1 600 7 171 744

The items in the Sundries column include:

Advertising $1 200

Drawings $979

Freight Inwards $430

Freight Outwards $760

GST Settlement $927

Interest $125

Loan – MNC Bank $500

Rent $2 250

Additional information

• Discount Expense was $154 for the month ended 30 September 2020.

• Discount Revenue was $275 for the month ended 30 September 2020.

• Sales returns were $1 100 including GST for the month ended 30 September 2020.

• Cost of sales was $8,520 for the month ended 30 September 2020.

• Inventory loss of $920 was determined via a physical inventory count as at 30

September 2020.

a. Prepare the Income Statement for the month ending 30 September 2020.
8 marks

b. Prepare the Net Cash Flows from Operations extract from the Cash Flow Statement for
the month ending 30 September 2020.
5 marks
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Question 4 – Lydia’s Ladders (6 marks)

Lydia Lassila owns Lydia’s Ladders, a small business that offers customers credit terms of
2/7, n/30.

Lydia has negotiated credit terms of 5/10, n/30 with her supplier.

Lydia has been presented with the following.

Turnovers (in days)

40
35
30
25
20
15
10
5
0
2019 2020

Accounts Receivable Turnover Accounts Payable Turnover

Explain the impact of the above trends on the liquidity of Lydia’s Ladders and suggest one
strategy for each indicator that could be implemented to improve the trends.

First summarise performance of accounts receivable (3 marks) then summarise for accounts
payable (3 marks).

END OF QUESTION BOOKLET