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TUTORIAL WEEK 3 Solutions to Preparation Questions
Preparation Questions:
DQ 2.1, 2.2, 2.11, P1.18, P2.3, Case 2A
DQ2.1If you had trouble with any of the terms, the glossary
(pages 734 744) will help you.
DQ2.2
Assets are usually separated into shorter-term ones (current
assets) and longer-term ones(noncurrent assets). Current assets are
those that are expected to be used, sold, or collected withinthe
next year, and noncurrent assets therefore are expected to have
benefits for more than a yearinto the future.
DQ2.11
Inventory and accounts receivable are current assets, because
the inventory is expected to be soldwithin a year of its purchase,
and accounts receivable are expected to be collected within a
year.These assets would not be current assets if inventory was not
expected to be sold within a year,and accounts receivable is not
expected to be collected within a year.
P1.181 Liabilities = Assets Owners equity
Pillows opening balance of liabilities = $80,000 $50,000 =
$30,000
Pillows closing balance of liabilities = $30,000 / 2 =
$15,000
2 Closing balance of Owners equity = Opening balance of Owners
equity +Net profit
= (O/b assets O/b liabilities) + Net profit
Buffalo Ltds closing bal. of Owners equity = ($60,000 $25,000) +
$43,000
= $78,000
3 Assets = Liabilities + Owners equity
Sparkle Industries closingbalance of assets = $57,000 + $15,000
= $72,000Sparkle Industries openingbalance of assets = $72,000 3 =
$24,000
Business School
ACCT1501 Accounting and Financial Management 1A
Session 1 2016
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P2.3
Incob Ltd
Balance Sheet as at 30 June 2016
Current assets $ $ Current liabilities $Cash and cash equivalent
43,000 Accounts payable 61,000
Accounts receivable 68,000 Notes payable 30,000Inventory 81,000
Income taxes payable 32,000Prepayments 10,000
202,000Current portion of long-termdebt
25,000148,000
Noncurrent assets Noncurrent liabilitiesLong-term investments
110,000 Long-term debt 200,000Property, plant andequipmentLess
accumulateddepreciation
550,000190,000 360,000
Provision for employeeentitlements
34,000234,000
Patents and trademarks 55,000 Total liabilities 382,000525,000
Shareholders equity
Share capital 161,000Retained profits 184,000
345,000727,000 727,000
Case 2A
1 Point of time at which the balance sheet is drawn up 29 June
2014.
2 Currency in which accounts in the balance sheet are measured
Australian dollars.
3 The 2014 balance sheet of Woolworths Limited balances as
follows:
Assets (24,205.2m) = Liabilities (13,679.8m) + Shareholders
Equity (10,525.4m)4 The assets of 24,205.2m were financed by
current liabilities 7,558.2m, noncurrent liabilities
6,121.6m and shareholders equity 10,525.4m (including issued
capital 4,850.1m andretained profits 5,423.1m).
5 The net assets figure of 10,525.4m is determined by deducting
liabilities, 13,679.8m fromassets 24,205.2m.
$ million
6 Balances at 29 June 2014 current assets 7,174.8
current liabilities 7,558.2
noncurrent assets 17,030.4
noncurrent liabilities 6,121.6
7 Balance of Working Capital at 29 June 2014= current assets
current liabilities= 7,174.8m 7,558.2m = 383.4m.
8 Dividends paid $1,491.1m as per statement of cash flows, plus
$32.0million to minorityinterests.
9 Amount of share capital issued 4,850.1m.
10 Companies included in the consolidated figures Woolworths
Supermarkets (Australian andNZ), Dan Murphys, BWS, Cellar Masters,
Big W, Ezibuy, Masters Home Improvement,Home Timber & Hardware
& ALH Group (hotels).
11 In 2014 the cost of goods sold amounted to $ 44,474.6
million. Referred to as cost of sales in
the income statement.
