Summative Assessment Task Sheet

1ACO10A – Stage 1 Accounting

Summative Assessment Task 1: Preparation of

Financial Reports Test
Student Name
Teacher Name Nathaniel Smith
Due Date Week 5 Term 2
Weighting 25% - (Task 3 of 3 worth 75% overall)

Time Allowed
Writing Time: 60 minutes
Total Marks: 50 marks

Items Needed for this Task

Pens, Pencil, Paper etc
Calculators can be used
Student Instructions
Answer all parts of each question in the space provided.
You must show all working out where required.

When completed ask your supervisor to sign and date the supervisor’s declaration.

Supervisor Instructions – Returning Materials

Student to complete under test conditions of 60 minutes. Test paper to be printed and provided to student.
Once completed,
• Supervisor to sign the declaration below.
• Student to scan and upload this task to Moodle.

Declaration
I declare that this task has been completed under the specified conditions.

Supervisor’s Name: ................................................................................................. Date: .............................

Supervisor’s Position: .............................................................. Supervisor’s Signature: ...........................

Page 1 of 11
Assessment Design Criteria
Evidence of your learning will be assessed using the performance standards.
Performance Standards for Stage 1 Accounting
Understanding and Exploration Application

A In-depth understanding of the role of accounting in decision- Comprehensive application of accounting

making concepts and conventions to create highly
appropriate accounting information
Insightful understanding and exploration of accounting concepts
and conventions Thorough application and analysis of
accounting information in business,
Comprehensive exploration of the use of accounting information in personal and/or cultural contexts
business, personal and/or cultural contexts
Highly effective application of
Perceptive understanding of the accounting information needs of a communication skills in an
range of stakeholders accounting context
B Detailed understanding of the role of accounting in decision- Well-considered application of accounting
making concepts and conventions to create
appropriate accounting information
Well-informed understanding and capable exploration of
accounting concepts and conventions Mostly thorough application and analysis of
accounting information in business,
Well-considered exploration of the use of accounting information personal and/or cultural contexts
in business, personal and/or cultural contexts
Effective application of
Mostly perceptive understanding of the accounting information needs communication skills in an
of a range of stakeholders accounting context
C Considered application of accounting
Competent understanding of the role of accounting in decision- concepts and conventions to create
making accounting information

Informed understanding and exploration of accounting concepts and Competent application and analysis of
conventions accounting information in business, personal
and/or cultural contexts
Considered exploration of the use of accounting information in
business, personal and/or cultural contexts Application of communication skills in an
accounting context
Informed understanding of the accounting information needs of a
range of stakeholders
Some understanding of the role of accounting in decision-making Inconsistent application of accounting concepts
D
and conventions to create basic accounting
Basic understanding and exploration of accounting concepts and information
conventions
Basic application of accounting information in
Some exploration of the use of accounting information in business, business, personal and/or cultural contexts
personal and/or cultural contexts
Inconsistent application of communication
Basic understanding the accounting information needs of a range of skills in an accounting context
stakeholders
Limited recognition of the role of accounting in decision-making Attempted application of accounting concepts
E
and conventions to create basic accounting
Emerging awareness of accounting concepts and conventions information

Attempted exploration of the use of accounting information in Attempted application of accounting

business, personal and/or cultural contexts information in business, personal and/or
cultural contexts
Emerging understanding of the accounting information needs of a
range of stakeholders Limited application of communication skills in
an accounting context

Page 2 of 11
Question 1
Prepare a monthly cash budget forecast for January and February 2023 for Susan Rondro
from the following information;

The business sells for cash and on credit. Of credit sales, 80% are usually collected within the
first month after sale. The remaining 20% are paid the month after.

Credit Sales for November and December in 2022 were $80 000 and $50 000 respectively.
Estimated sales for January and February are:

January Cash $200 000 Credit $40 000

February Cash $150 000 Credit $70 000

Estimated purchases for December is $119 000 and January is $126 000 respectively and
paid in the following month.

Estimated general expenses for January is $42 000 and February is $44 600. Wages will be
$10 000 each month, rent will be $5 000 each month.

Advertising will be 2% of total sales.

It is anticipated a new machine costing $150 000 will be paid for in February.

The balances of the following accounts on 1 January 2023 are:

Cash $1 000 dr

Collection from Debtors

Month Amount January February
November

December

January

February

(2 marks)

Page 3 of 11
a) Complete the cash budget for January and February.

Cash Budget for S Rondro

January and February 2023
Estimated Cash Receipts Jan Feb

Total Receipts

Estimated Cash Payments

Total Payments

Opening Balance

Add surplus (or -deficit)

Closing Cash Balance

(10 marks)

Page 4 of 11
b) Susan is quite concerned because the budgeting process has identified a shortage of
cash in the coming months. This could be due to the cost of new machine. Outline two
finance options for Jean with two advantages and one disadvantages.

(5 marks)

c) Susan is advised that she could lease the machine for $5 000 per month for 5 years.
What are the two pros and two cons of this idea?

(4 marks)

Page 5 of 11
Question 2
Based on the following financial information, the owner of Jimmy’s Travel Consultants
would like some advice from you.

Income Statement for the year ended 30 June 2022

Revenue $ $
Cash Sales 132,000
Credit Sales 154,000
Sales Returns (5,500)
Discount Allowed (2,244) 278,256
Cost of Goods Sold
Opening Inventory 55,000
Purchases 161,260
Purchase returns (3,740)
Discount Received (2,398)
Delivery Inwards 3,300
Import duty 1,188
Buying expenses 2,200
Closing Inventory (70,400) 146,410
GROSS PROFIT 131,846
Other Revenues
Commission Received 2,200
134,046
EXPENSES
Selling and distribution expenses
Advertising 5,500
Delivery outwards 4,840
Repair Delivery Vehicle 1,760
Salaries - salesperson 26,400 38,500
Administration expenses
Insurance 4,400
Power and water 5,500
Rent 27,500
Salaries – office staff 14,300
Repairs and Maintenance cost 4,400 56,100

Financial expenses
Bad debts 5,060 5,060
Total Expenses 99,660
NET PROFIT 34,386
Statement of Changes in Equity
as at 30 June 2022 and 30 June 2021

2022 2021
Opening Capital 121,110 115,610
Add Profit 34,386 23,100
Less drawings 4,080 17,600
Closing Capital 151,416 121,110

Page 6 of 11
 Balance Sheet for 2021 and 2022
Current Assets 2022 2021
Cash at Bank 0 17600
Debtors 55000 46310
Inventory 70400 125400 49500 113410

Non Current Assets

Motor Vehicle 75944 75944
Equipment 12496 88440 16500 92444
213840 205854
Current Liabilities
Cash at Bank 11880 0
Creditors 25300 19800
Loan 13244 50424 13244 33044

Non Current Liabilities

Long Term
Loan 12000 12000 51700 51700
62424 84744
Net Assets 151416 121110

Additional information for consideration in your analysis:

- Ratio results for the year ended 30 June 2021 were:
GPM NPM ROE ROA WCR QR

40% 25% 20% 9% 3.4:1 1.9:1

1) Calculate two Profitability ratios and one Short Term Liquidity ratios?

(6 marks)

Page 7 of 11
2) Perform a financial analysis of the business for the year ended 30 June 2022 using
two Profitability ratios and one Short Term Liquidity ratios. In your analysis, make
sure you:
• identify the purpose of the ratios (3 marks)
• interpret ratio results (6 marks)
• make comments on business performance (use previous year’s data as a benchmark).
(5 marks)

Page 8 of 11
Page 9 of 11
3) Identify and explain in detail to the owner three strategies that could be considered to
improve business performance, including both financial and non-financial
information.

(9 marks)

Page 10 of 11
Refer to the following information, where appropriate, when answering Questions 2.

Profitability Ratios Express as

Gross Profit
Gross Profit Margin
x 100 %
Net Sales Revenue

Profit
Profit Margin
x 100 %
Net Sales Revenue

Profit
Return on Equity
x 100 %
Average Owner’s Equity

Return on Total Assets Profit + Interest Exp

x 100 %
Average Total Assets

Financial Stability (Short Term – Liquidity)

Quick Ratio Cash Assets + Receivables

(Acid Test)
ratio
Current Liabilities

Current Assets
Working Capital Ratio
ratio
Current Liabilities

Page 11 of 11