This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit. 

Question 1                                                                                                    ( 7 marks)

Assume at 30 June 2020, Assets, Liability, Equity, Income and Expense amounts for ABC Building Renovation are presented below:

Required:

Prepare a Balance Sheet in narrative (vertical) format as at 30 June 2020.

Question 2                                                                                                    (7 marks)

PM Consultants operates a number of Consultancy firms (Perth and Adelaide). The following information is relating to a number of accounts presented in the Trial Balance of PM Consultants (post adjustments) for the year ending 30th June 2020.

Required:

1. From the information provided, prepare the Income Statement for PM Consultants (5 marks)
2. In your own words discuss the difference between profit or loss and comprehensive income. (2 marks)

         (Number of words limit 100 – 150)

Question 3                                                                                                    (11 marks)

The following information about Melbourne Corp. applies to the entity for the year ended 30 June.

Required:

1. a)What was Melbourne Corp.’s cash flow from the following activities? (8 marks)

• Operating activities

• Investing activities
• Financing activities

1. b)In your own words, outline and briefly discuss some cash-flow warning signals. (3 marks 

Question 4                                                                                                    (11 marks)

XYZ Co Ltd had the following comparative current assets and current liabilities:

                                                                                                30 June 2020          30 June 2019

         Current assets

               Cash                                                                               $ 30,000                  $ 30,000

               Marketable securities                                                          40,000                    10,000

               Accounts receivable                                                           55,000                    95,000

               Inventory                                                                          110,000                    90,000

               Prepaid expenses                                                               35,000                    20,000

                     Total current assets                                                   $270,000                 $245,000

         Current liabilities

               Accounts payable                                                           $120,000                 $110,000

               Salaries payable                                                                 40,000                    30,000

               Income tax payable                                                            20,000                    15,000

                        Total current liabilities                                        $180,000                      $155,000

During 2020, credit sales and cost of goods sold were $450,000 and $250,000,

respectively. Net cash provided by operating activities for 2020 was $134,000

Required:

1. a)Calculate the following financial ratios for XYZ Ltd for the year of 30 June 2020 (7marks)

• Current ratio
• Quick ratio
• Receivables turnover

1. b)In your own words and with reference to cash sufficiency ratios, discuss the role(s) that an entity’s cash flow data can play in analysing the entity’s financial performance (4 marks)

Question 5                                                                                                    (7 marks)

Journalise the following business transactions in general journal form. Identify each transaction by number.

1. Received $35,000 from shareholders.
2. Purchased equipment for $45,000, paying $15,000 in cash and giving a promissory note payable for the remainder.
3. Paid $3,000 rent for the month.
4. Recorded $12,500 of services provided on account.
5. Paid wages of $7,500.
6. Received $7,000 in cash for services provided.
7. Collected $2,000 from customers on account

Question 6                                                                                                    (7 marks)

Because master budgets for service organisations are more straightforward than those for manufacturing entities, it is not as important to budget for service organisations.

Required

 In your own words, discuss the above statement.

          (Number of words limit 100-150)

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