Updated Accumulated Depreciation=400k+35k=435k, Carrying value=850-435=415k. Test for impairment, impair if recoverable amount < carrying value, recoverable amount=higher of NRV($390k) or Value in use ($395k) Impairment loss=415-395= 20k, Dr impairment loss(expense increase), Cr Accumulated impairment loss(contra asset increase) Direct method: write down debt (record bad debt expense) when actual account is deemed as irrecoverable, Dr bad debt expense 400, Cr Account receivable $400. Balance day adjustment for prepaid rate expense, recognize consumption of economic benefit over the rates that’s already consumed, if not adjusted, understate expense overstate asset (prepaid rates) and overstate profit. Balance day adjustment for accrued interest expense (liability), Dr interest expense 2.8k, Cr interest payable 2.8k. 关键词 xx expense not been recorded and paid (明显指 accrued expense) If not adjusted, understate expense, overstate profit and retained earnings, understate liability Opening allowance balance $12k, Actual bad debt written off Cr allowance $8k,代表有 overprovision of allowance by $4k (多记了 4k expense, allowance account 还有 4k Cr balance), 现在预计下个 period 会有 19k 坏账，总共要记 19k expense (allowance account 要有 19k balance),现已经多记了 4k,再记 19-4=15k 即可。 Adjusting entry 代表 balance day adjustment to recognize bad debt in advance, Dr bad debt expense $1,500, Cr Allowance for doubtful debt $1,500. Cost(excluding GST)=990k/1.1=900k, residual value 67.5k, useful life 10 years, Straight line depreciation=(900-67.5)/10=$83,250/year Purchase on 1 July 2016, on company’s balance sheet for the whole financial year, record full amount. Gross profit reflect level of mark up (Selling price > COGS 的比重) Gross profit will be impacted if selling price or cost of sales(inventory value) changes, increase in sales staff won’t change selling price or cost of sales, therefore no impact on GPM. Perpetual inventory system adjust for all inventory movement, including purchase, purchase return, sales return, trade discount on purchase, freight in etc, payment of freight cost for inventory shipped to customer is freight out, should be recorded as expense, doesn’t affevt value of inventory. 2/7,transaction 后七天内还款打 2%折扣 as discount for early settlement, purchase on 13 June, customer repaid on 17 June,在 discount period 内，entitled to discount. Customer 总共欠的钱，disregard GST 所以 Account receivable=value of credit sales=750, sales return 降低 account receivable by 50,实际 receivable before applying discount=700, customer need to pay 700*(100%-2%)=$686 Cost=900k, GST upon purchase is an asset (can be used to offset GST payable liability from sales), recorded as a receivable 90k, direct finance by bank (no cash impact, increase liability) Dr PPE-yacht 900k, Dr GST receivable 90k, Cr Loan payable 990k Cost 5k, Accumulated depreciation =500*3=1.5k, Carrying value=3.5k(1 July 2017-30 June 2020), insurance paid out (bank proceed)=2.2k, Actual loss on scrapping-3.52.2=1.3k, asset need to be removed from balance sheet, Dr Accumulated Depreciation, Cr PPE. Annual depreciation exp=(13k-3k)/10=1k, sold on 31 March 2020, only on balance sheet for 3 months (1 Jan to 31 March in FY20), depreciation expense=1k/12*3=$250, Dr Depreciation expense $250, Cr Accumulated Depreciation $250. Total accumulated depreciation=3,000+250=3,250, record Acc Dep upon asset disposal 需要从账上清除资产 carrying value, Acc Dep 本来有 Cr balance,所以需要 Dr Acc Dep 3,250, Cr 临时账号 Disposal-Espresso Machine 3,250. Carrying value(what the espresso machine worth to the business)=13,000-3,250=9,750, sold for $12,500 (higher than what the business think it’s worth), 12,500-9,750=$2,750 Gain on disposal. Investing activities 涉及 cashflow related to purchase or sales of NCA,并且得是公司自己 出钱买的才算，direct financing from bank 或者 seller 不影响公司 cash flow. 题目中涉及三笔 asset related transaction,第一个 vehicle 自己花了 30k (investing outflow), 第二个 equipment $20 k, direct financing from La Trobe Financiers 属于 investing activities 但是没有 cashflow 从公司流出，干扰项（这个应该记账记 balance sheet equipment 这个 asset 上升，note payable 这个 liability 上升，no cash flow impact), 卖 old vehicle 所得现 金 10k 属于 investing inflow, loss on disposal 不是 cashflow 不需要考虑，是干扰项，排除。 故而 Net investing cashflow=proceed 10k-payment30k=-20k Payment for operating expense (operating cash outflow), reconstruction for accrued expense. Account reconstruction for accrued liability account: Dr side: closing balance 8k (实际代表 8k 的 Cr balance), missing amount=40+5-8=37k. Cr side: opening balance 5K,本 period 新增 expense 会增加 liability by 40k. 从理解的角度出发：一开始欠费 5k,今年新发生了 40k 的费用，如果一分钱不付，最后会欠 45k,但最后实际只欠了 8k,差值 45k-8k=37k 的部分为实际付掉的 operating expense. Depreciation using units of production = (1,427k-427k)/150,000 miles=$6.66/nautical miles. Land 价值的变动:100k 到 220k (revaluation gain of 12k), land value incremental gain of 12k,当时会上个 period 记 Dr Land 120k, Cr Revaluation surplus $120k,现在从 220k 降到 190k, land value decremental 下降 3k,Cr Land 3k,但是不能直接 Dr loss on revaluation,因 为实际并没有 loss (100k 买的，现在价值 190k,总的来说还赚 90k),所以应该先把之前的 revaluation surplus offset 一下 gain 就足够了，Dr revaluation surplus 30k, Cr land 30k.记 录完后 asset value 从 220k-30k 降低到 190k，同时 revaluation surplus 账号也从 120k30k=90k，和实际 asset 价值上升部分相吻合，可以快速检查答案（对比 original cost 和现 在的 valuation 看看自己记账是否符合题意）。 Revaluation surplus before revaluation 是 30k,代表 asset 之前初始购入价值应该为 400k30k=370k,现在价格为 320k,总体下降 50k. 记账时，本年价值浮动为下降 8 万（400k 降到 320k), Cr land 80k,但是这部分并不全是 loss, 要先 offset gain,所以 Dr revaluation surplus 30k, 然后剩下的 50k 才是 Dr revaluation loss 50k.最后确认答案实际总体自查下降为 50k，没有任何 revaluation gain，所以符合答案 （revaluation surplus 从 30k Cr balance-30Dr balance=0, revaluation loss 有 50k Dr balance). 和 semester 1 那道题一样，先计算 disposal 前新增 depreciation 加入 accumulated depreciation,再把资产从账上移除(Dr Acc Dep, Cr PPE-Motor Vehicle),随后对比 carrying value(你认为 asset 的价值， 会受到 depreciation 计算的影响，overprovision for depreciation, 多记 depreciation expense, carrying value 就会低，所以容易有 gain on disposal；反之 underprovision for depreciation 就会导致 carrying value 过高,会有 loss on disposal)和 bank proceed(实际 disposal 所得)，故而该 statement 正确。 Insurance policy 一定是 prepaid expense,之前说过是常见的 prepaid expense 例子，因为 保费一定是预付的，然后时间到了 policy expire,需要转成 expense,上一次记录 expense 的 时候是 2019 年六月底，所以已经把 2019 年上半年的 insurance expense 记过了，还剩下 下半年的部分在账上作为 prepaid insurance expense (asset),截止 June 30, 2020, 2019 年 下半年和 2020 年上半年的保费应该都 expire 了， 所以记账的时候应该 0.5*(6k+9k)=$7,500. Dr insurance exp 7.5k, Cr prepaid insurance 7.5k，expense 上升，asset 下降，如果没有 做这个 adjustment,则 expense will be understated, profit and retained earnings will be overstated, prepaid insurance (asset) will also be overstated. 题目问截至 30 June 2020, balance sheet 会怎么记账，那就是 balance sheet 中还会有 9k*0.5=4.5k 的部分是 prepaid insurance expense 这个 asset 的 balance (因为下半年的保 费还没 expire,还是一个 economic benefit 留存在账上) Accrual accounting: recognise revenue and exp based on whether transaction occur (所以accrued revenue是revenue, accrued expense是expense, prepaid revenue是unearned revenue属于liability不能记作revenue，履行了的部分可以 记partial rev, prepaid expense是个资产，预付的不用记expense, consumed掉的 部分可以转成expense.). 所以revenue= Cash sales 450k+ credit sales 300k+ commission revenue 4k(提前收到22k但在accrual accounting底下这是unearned revenue,真正liability下降，转成revenue的只有Cr commission revenue那4k) =754 k Under the cash basis of accounting, the net profit of the business is determined as the difference between cash inflows from revenues and cash outflows from expenses during the reporting period. 这道题答案应该有点问题，根据 cash accounting: Cash revenue 应该是 cash sales 450k+commission revenue received in advance 22k 总共 472k, Cash exp 应该是 cost of sales 300k (assuming 这个 period 一般买的货也会还供货商 钱,但这个 assumption 很不严谨，一般应该会给 cash paid to acquire inventory 这个 cashflow 会被当做 inventory related expense 来记录)，其他支出 cash expense: salaries paid 40k, prepaid insurance 8k, operating expense 87k, 共记 435k,最终总 profit=37k. Accrual accounting底下的expense是： -cost of sales 300k -salaries 43k (40k原本记的salaries exp证明这个账上balance day前记了是已经发 生了，付了的+3k accrued salary exp，已经发生但是还没记的exp也是exp) -operating expense 87k -insurance expense 2k （实际付了 8k,但是真正用掉转为 expense 的部分是 2k) 总共 total expense 为 432k。 最后 accrual accounting 底下的 profit 为 754k-432k=322k Provision for leave 和 warranty provision 类似，是 provision (liability account) with uncertain timing and amount of claim being made by employees. 1.记账方式，还没有发生 claim on leave 的时候要提前 recognise 这部分的 expense, Dr annual leave expense 1,200, Dr sick leave 400, Cr provision for leave 1,600 2&3.Adjustment 过后， Impact on income statement : 还没发生之前提前 recognise 预计 下个 period 会发生的 1,600 的 expense,所以 profit 会降低。Impact on balance sheet: liability 上升 1,600 (provision account),同时 equity 下降 1,600(expense 上升,retained earnings 下降，equity 下降)，no impact on asset, accounting equation 仍然 balance.如果 没有做 adjustment,则 liability will be understated, profit and equity will be overstated. Inventory purchase on credit, 证明是欠着供货商钱，total account payable owing=5，000*1.1=5，500 1. Dr Inventory 5，000, Dr GST receivable 500(你会付给供货商GST,未来你收货 时欠税局的就少了一些，你付出去的可以和你卖货收上来的互抵，GST receivable 是asset), Cr Account payable 5，500. 2&3.Impact on balance sheet: asset increase (inventory & GST receivable), liability increase (account payable), no impact on income statement as it’s purchase for inventory, not an expense. If the error is not adjusted, 如果漏记了这笔 purchase, then the omission will result in asset being understated by 5，500,liability will be understated by 5，500, no impact on equity. Inventory turnover significantly improve over the period (reduce from 50 days to 40 days), accelerate the speed to turn inventory into sales, can be affected by: lower level of inventory storage, superior selling capabilities (e.g. better training), or promotion event (discounted pricing to accelerate sales). Owner说的话是错的，gross profit margin measure的就是mark-up, selling pricecost price这部分reflect mark-up的能力.如果mark up remain constant, 一般就不是 sales promotional activities,很难会让sales volume有所上升，如果GPM remain constant,得卖出更多货物，gross profit才会总体上升，唯一可行解释能 支撑owner 论据的：superior selling capabilities,比如增加员工的training之 类导致的销售能力的提升，但这种情况比较少，大部分情况下sales volume增加会 和promotional activities有关，promotional activities会降低Gross profit margin但是会增加sales volume,对gross profit总数影响不一定（取决于折扣力 度更大还是销售量增加更多）。 所以这个时候，很可能 inventory improvement 仅仅是因为 less inventory holding on hand 导致的，这时候虽然对 gross profit 没有影响，但是更快的 inventory turnover 对企业 liquidity 资金回笼速度有利，a big plus for liquidity management,有时可能 也会正面影响 NPM (比如 inventory 囤积过少，虽然 gross profit margin 没变，但是 operating expense to sales ratio 可能可以有 improvement,比如 stock obsolescence 的问题减少了). 也就是 owner 说的太过绝对，只包括了一种解释 inventory turnover 增加的原因 （superior selling capabilities）并且不是最常见的理由(promotional activities),所以 这个说法是错的。