Accounting for Decision Makers Mock Final Exam

Topic 1: Financial Transaction Analysis

Vista Design Studio – June 2023 Transactions
Opening Balances (June 1, 2023):
Cash 8,200; Art Supplies 350; Design Equipment 52,000; Capital 60,550.

Date	Transaction
Jun 2	Received $1,100 cash for design services
Jun 5	Paid $750 for 3-month office rent in advance
Jun 9	Purchased $300 art supplies on credit
Jun 12	Billed client $3,500 for completed projects
Jun 15	Paid assistant wages $450
Jun 18	Settled art supplies credit purchase
Jun 21	Collected $3,500 from billed client
Jun 24	Used $120 worth of art supplies
Jun 26	Completed $4,200 project on account
Jun 27	Borrowed $12,000 from bank
Jun 29	Purchased new drafting tables for $9,000 cash
Jun 30	Accrued $310 unpaid electricity (July payment)
Jun 30	Accrued $480 unpaid wages (July payment)

Required:

1. Analyze transactions using the accounting equation worksheet.
2. Prepare June 2023 Income Statement and Balance Sheet.

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1. Topic 2: Cash Budgeting

   Global Retail Co. – 2024 Quarterly Forecast

   Item	Q1	Q2	Q3	Q4
   Sale Revenue	$410,000	$460,000	$510,000	$580,000
   Cost of Sales	$180,000	$210,000	$230,000	$260,000
   Purchases	$190,000	$230,000	$260,000	$240,000
   Marketing & Admin Expenses	$35,000	$35,000	$35,000	$35,000
   Occupancy Expenses	$30,000	$30,000	$30,000	$30,000
   Depreciation Expense	$17,000	$17,000	$17,000	$17,000

   Additional Data:

• December 2023 credit sales: $340,000 (Q1 2024 opening accounts receivable)

• Collection policy: 50% collected in quarter of sale, 50% in following quarter

• 100% of purchases paid in same quarter

• Q4 equipment upgrade: $18,000 cash outlay

• Unpaid Q4 utility expense: $850 (due January 2025)

• Opening cash balance (January 1, 2024): $12,500

  Required:

  1. Prepare schedule of cash receipts from accounts receivable.
  2. Prepare quarterly cash budget for 2024.
  3. Evaluate annual cash flow adequacy.

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Topic 3: CVP Analysis

Cafe Delight – Product Line Data

Product	Selling Price	Variable Cost/Unit	Sales Mix
Premium Coffee	$5.50	$1.80	35%
Artisan Pastry	$4.00	$1.20	65%

Annual fixed costs: $88,000

Required:

1. Calculate per unit contribution margin for each product.
2. Determine weighted average contribution margin.
3. Compute break-even point in total units and per product.
4. Calculate units required for $42,000 target profit.
5. Sensitivity Analysis: If coffee variable cost rises by 0.30 and fixed costs increased to 95,000, recalculate total break-even units.

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Topic 4: Capital Investment Appraisal

EcoPower Solar Project

• Initial investment: $280,000
• Project life: 4 years
• Annual net cash flows:
  Year 1: 65,000 Yerar2: 95,000
  Year 3: 105,000 Year4:140,000 (includes $35,000 salvage value)
• Cost of capital: 11%

Required:

1. Calculate accounting rate of return (ARR).
2. Determine payback period.
3. Compute net present value (NPV).
4. Advanced: Find IRR (trial rates 12%-17%).
5. Recommend project acceptance/rejection with justification.

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Answer Sheet:

Question1:

Date	Cash	Account Receivable	Art Supplies	Design Equipment	Prepaid rent	Account payable	Accrued Expense	Capital	Revenue	Expense

All financial statement

Income Statement：

Financial statement:

Question2:

Quarter	Q1 (55% Current + 45% Previous)	Q2	Q3	Q4
Q1 Sales
Q2 Sales
Q3 Sales
Q4 Sales
Total

Quarter	Q1	Q2	Q3	Q4
Opening
Receipts
Payments:
- Purchases
- Marketing & Admin Expenses
- Occupancy
- Depreciation Expense
Closing

Question3:

Question4:

Remind:

The mock final exam question url in http://121.40.144.4:880/AccountingForDecisionMakerMockFinalExamAnswerSheet/revision.md

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