The University of Waikato Scholarship Accounting Day 2013
10-column worksheet
From the assessment specifications:
 processing of accounting information including the use of a 10-column worksheet:
Line items list
…
…
…lots of lines
Total Comprehensive
Income or
Profit for the year
Equity at the end
Totals row
Trial Balance
Dr Cr
Adjustments
Dr Cr
Statement of financial performance
Dr Cr
Statement of movements in equity
Dr Cr
Statement of financial position
Dr Cr
What this means is you need to show the debits and credits of any adjustments in the adjustment column.
Basically the adjustment column is like a general journal entry for each adjustment so we know we need debits equal credits for each ‘general journal’ entry. Note for land or buildings revaluation up on balance day debit land or buildings and credit ‘increase in fair value’ new line item. Do not enter the credit against the revaluation surplus, as we need the opening balance of this in the statement of changes in equity.
Each line item from the trial balance, adjusted where necessary, and each additional line item you create from the adjustments goes in ONE debit or ONE credit column across the three financial statements.
If you remember this you should not have any major problems with the worksheet.
Extending the trial balance and adjustment columns:
The statement of financial performance (or comprehensive income) has
 debit entries for all the cost of goods sold and expense line items (unless a negative expense such as a reduction in doubtful debts occurs)
 credit entries for all income items and any negative expense items (eg change in inventory is a credit, doubtful debts credit)
 credit entries for increases in fair value of assets
 debit entries decreases in fair value of assets
The statement of changes in equity has
 credit entries for opening balances of equity accounts – contributed equity, retained earnings, revaluation surplus
 credit entries for issue of shares (create a line item)
 debit entries for dividends paid and share repurchase (create two line items – one for the change in CE and one for the change in RE)
The statement of financial position has
 debit entries for all assets
 credit entries for all liabilities
 credit entries for negative asset accounts – allowance for doubtful debts, accumulated depreciation, bank overdraft

NO entry for any equity line items in the trial balance – these are in the statement of changes in equity credit column (remember the rule ONE debit or ONE credit column only across the three statements for line items in the trial balance and adjustments).
Prepared by Elizabeth Pitu 1

The University of Waikato Scholarship Accounting Day 2013
Finishing the worksheet
When finishing the worksheet we enter a debit in one statement and a credit in the next statement.
Finishing the statement of financial performance
Assume there is a profit for the year (or profit for the year and other comprehensive income)
Create a line item: Profit for the year (or Total comprehensive income for the year)
For the line item ‘profit for the year’ or ‘total comprehensive income for the year’ one debit and one credit is created as follows:
Add up the credit column of the statement of financial performance. Remember we are assuming a profit for the year so the credit column will be larger – if there was a loss, like Xero insists on making, we would add up the debit column. Place the total in a totals row in both the credit and debit columns of the statement of financial performance. Now make the debit column of the statement of financial performance equal the credit column by entering in the debit column the difference between the total credits and the total debits on the ‘profit for the year’ line. (Note: if a loss there would be an entry in the credit column, called loss for the year).
Transfer the profit for the year into the credit column of the statement of changes in equity.
Quick summary: finishing the statement of financial performance
Profit for the year or total comprehensive income
 debit in the statement of financial performance
 credit in the statement of changes in equity
Loss for the year
 credit in the statement of financial performance
 debit in the statement of changes in equity
Finishing the statement of changes in equity
Create a line item: Equity at the end
This will be positive so the credit column of your statement of changes in equity will be (significantly) larger than your debit column.
Add up the credit column of the statement of changes in equity. Place the total in your totals row.
Subtract off the debit entries and put the result in the debit column of the statement of changes in equity for your line item ‘equity at the end’.
Place the credit total in the debit column of the totals row in the statement of changes in equity as now your DEBITS = CREDITS.
Transfer the equity at the end figure to the credit column of your statement of financial position.
Remember this is the ONLY equity figure to appear in the statement of financial position.
Total the statement of financial position and CRY when it doesn’t balance……… No, SMILE because it balances!!!
Summary for equity at the end
 debit in the statement of changes in equity
 credit in the statement of financial position
Prepared by Elizabeth Pitu 2

The University of Waikato Scholarship Accounting Day 2013
Accounts Receivable
Auditors Remuneration
50,600
18,000
Bad Debts
Bank
Directors Fees
Dividends Paid
300
4,300
35,000
57,000
Donations
General expenses
Interest on Debentures
Inventory 1 April 2012
Land
Plant and Equipment
Purchases
Financial assets
Provisional Taxation paid
Wages and salaries
30,000
120,500
8,100
40,000
180,000
540,000
463,000
75,000
34,000
84,000
Contributed Equity
(160,000 shares)
Accounts Payable
Accumulated Depreciation
- Plant and Equipment
Allowance for Doubtful Debts
Debentures (9% p.a, due 2016)
Dividends Received
Land revaluation surplus
420,000
40,000
70,000
1,200
120,000
1,600
10-column worksheet illustrative example
Sales
30,000
912,000
Retained Earnings 145,000
1,739,800 1,739,800
Additional information
1.
Owing for wages and salaries $4,700
2.
The debentures were issued on 1 April 2012. Interest is payable quarterly on the first of the month.
3.
Advertising included in general expenses $2,800 has been paid in advance.
4.
Financial assets are 10,000 shares in Fletcher Building. The market price of the shares in balance date is
$8.30. Fletcher Building declared a final dividend of 11c per share on 28 March 2013, to be paid on 16
April 2013.
5.
Freedom Ltd makes custom furniture to order. Sales includes advance payments of $5,200 for furniture which will be produced and sold during April.
6.
Write off an additional $600 bad debts.
7.
Adjust the allowance for doubtful debts to 2% of accounts receivable.
8.
Depreciation on plant and equipment is 10% p.a. diminishing value
9.
Inventory on hand at 31 March 2013 $47,200. Included in this inventory is a range of fashion cushions which cost $2,000 and have a net realisable value of $300.
10.
Taxation expense for the year is $40,000
11.
Land is to be revalued to its current independent valuation of $160,000
12.
During the year Freedom issued 50,000 shares at a fair value $3 to current shareholders fully paid in cash.
13.
Freedom also repurchased 10,000 shares at a fair value of $3.20 from retiring employees. These shares had initially been issued at $2.40.
Prepared by Elizabeth Pitu 3

The University of Waikato Scholarship Accounting Day 2013
Full comprehensive income statement and balance sheet.
Important notes regarding this question.

This question is fairly comprehensive and covers a number of different issues.

In scholarship you would not have one question that is so comprehensive.

Ability to cope with each of the different adjustments and notes can be required.

You may find you don’t have all the information to complete every note fully. Use the information you have been given to complete the notes as fully as possible.
You are required to use the trial balance and additional information to:
1.
Complete a 10-column worksheet to show the effect of the adjustments (see Scholarship Assessment
Specifications 2013)
2.
Complete a comprehensive income statement by nature, a statement of changes in equity and a statement of financial position
3.
Complete relevant notes to the financial statements.
Quarry Stone Ltd
Trial balance of as at 31 March 2009
Auditors remuneration
Accounts receivable
32,000 Accounts payable
54,000 Allowance for doubtful debts
34,000
400
Bad debts 640,000
Bank
Bank fees
3,000 Contributed equity
27,600 Debentures
4,300 Dividends received
100,000
5,100
Buildings 42,000
Directors fees
Dividends paid
Interest on debentures
Interest on mortgage
190,000 Rent Received
21,000 Mortgage
140,000 Retained Earnings
9,000 Sales
17,100 Land revaluation surplus
180,000
250,400
1,440,000
42,000
Inventory - April 2008 28,000
Land
Loss on sale machinery
Other expenses
Machinery
Raw materials and consumables used
Employee benefits expense
Financial assets
Provisional tax paid
Vehicles
48,000 Buildings revaluation surplus
280,000
5,400
Accumulated depreciation
102,500 Vehicles
720,000
Accumulated depreciation
600,000
Machinery
240,000
84,000
80,000
392,000
128,000
160,000
$3,049,900 $3,049,900
Prepared by Elizabeth Pitu 4

The University of Waikato Scholarship Accounting Day 2013
Additional information

The taxation expense for the year is $93,000

Advertising, included in other expenses, $5,000 has been paid in advance

Additional bad debts of $4,000 are to be written off.

The allowance for doubtful debts is to be adjusted to 2.5% of accounts receivable.

Depreciation on buildings is $2,000 p.a. straight line.

Depreciation on machinery is 10% p.a. straight line.

Depreciation on vehicles is 20% p.a. diminishing value.

Rent received in advance $6,000

Financial assets are Shares in Rock Garden Ltd. They have a current market value considered to be fair value of $77,000. They are to be revalued.

$1,000 is owing for dividends from Rock Garden Ltd

Inventory on hand at 31 March 2009 is determined to be $52,000. Included in this inventory are some large quarry stones that cost $7,400 to produce but have been damaged and now have a net realisable value of $2,200. Inventory comprises raw materials $20,000 and finished goods.

There is $4,500 owing for staff wages

Included in other expenses is a donation to St Johns $7,000.

Auditors remuneration is advice and planning $13,000 with the remainder being audit fee

Buildings were revalued on 31 March 2008. Had buildings not been revalued, their carrying amount under the cost model at 31 March 2008 would have been $162,000.

Land is to be revalued to its current independent valuation of $300,000 as determined by JFG Valuers based on fair value of surrounding properties.

The mortgage is secured over the land and buildings. It was refinanced on 1 October 2007 at an interest rate of 9% p.a., with the principal being paid off in 10 equal annual instalments of $20,000 each due on 30 September beginning on 30 September 2008. The first instalment was paid when it was due.

Debentures are secured with a floating charge over the remaining assets. The debentures were issued on 1 April 2006 with a maturity date of 31 March 2011. They have a fixed interest rate of 12% per annum.

On 1 April 2008 contributed equity comprised 200,000 shares with an average issue price of $2.40.

On 1 May 2008 a share issue of 50,000 shares at a fair value of $3.20 was made to current shareholders fully paid on application.

On 31 March 2009 20,000 shares were repurchased from retiring employees at a fair value of $3.50.
This transaction has not yet been recorded.

On 30 April 2009 the directors declared a final dividend for the year ended 31 March 2009 of 25c per share.

The directors of Stone Quarry Ltd have been negotiating with a nearby quarry to purchase the land and buildings in July 2009. The negotiations are indicating the cost of the purchase will be between
$240,000 and $300,000.
Prepared by Elizabeth Pitu 5