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Chapter 6 Tutorial Questions

This document provides a statement of profit or loss for Sunshine Plantations for the year ended December 31, 2021. It includes items such as sales, cost of sales, expenses, income, and profit before tax. Additional information provides details on other income, administrative expenses, finance expenses, and write-

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59 views

Chapter 6 Tutorial Questions

This document provides a statement of profit or loss for Sunshine Plantations for the year ended December 31, 2021. It includes items such as sales, cost of sales, expenses, income, and profit before tax. Additional information provides details on other income, administrative expenses, finance expenses, and write-

Uploaded by

Alefosio Fonoti
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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HAC111: Lecture 6

Chapter 6: Profit and loss and the statement of changes in equity

Tutorial Questions

Exercise 6.17
Consider each of the following transactions and examine whether they satisfy the expense
definition criteria under the accrual method of accounting.
a. Paid salaries owing from the previous reporting period.
b. Owner withdrew money to purchase a motor vehicle for private use.
c. Money owed to Optus for internet charges this reporting period.
d. Office equipment is depreciated.
e. Paid a supplier for goods that had been purchased on credit.
f. Purchased a perpetual inventory system to computerise the inventory records.

Exercise 6.21
Using the information relating to Coconut Plantation Pty Ltd in 6.20, recalculate the depreciation
expense to be recorded in the statement of profit or loss for the year in which the machine was
purchased and the subsequent year using the diminishing balance method and the units of
production method. In recalculating the depreciation expense, use the following assumptions:

Diminishing balance — the machinery is depreciated using a 331/3 per cent


depreciation rate.
Units of production — The machinery is expected to produce 300 000 units
over its useful life. In the period of March to December in year 1, 30 000 units
are produced. In year 2, 70 000 units are produced.

Exercise 6.29
A list of account balances for Mr Tanner’s business Robotics at the end of the 30 June 2020
reporting period is shown below. Produce the statement of profit or loss for the
reporting period, and the equity balance at the end of the year.
Exercise 6.31
You are the assistant accountant at Sunshine Plantations Pty Ltd, and you have prepared
the following statement of profit or loss for the year ended 31 December 2021.

SUNSHINE PLANTATIONS PTY LTD


Statement of profit or loss
for the year ended 31 December 2021
Sales $1 675 000
Cost of sales 1 025 000
Other income 1 500
Warehouse expenses 57 000
Distribution expenses 20 000
Sales and marketing 105 000
Administrative expenses 115 000
Finance expenses 18 000
Profit before income tax $336 500

Additional information
 The ‘Other income’ comprises $800 of interest income.
 Administrative expenses include $6000 for the depreciation of office
equipment.
 Finance expenses of $18 000 represent interest expense on a bank loan.
 Administration expenses include the write-off of the amount owed by a major
customer ($22 000 ) who has gone bankrupt.
 Warehouse expenses include $27 000 for the depreciation of manufacturing
equipment.
Required
The accountant has asked you to produce the following financial information.
a. Gross profit
b. Profit before interest
c. Profit before material items
d. Earnings before interest, tax and depreciation

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