Part (A) Please answer all questions.
Question 1
Maria Cake Shop is open. in 1. April 2020. Below are the transactions of the Shop in the month of April.
1) Maria invested $150,000 in cash in the Shop.
2) A kitchen equipment of $80,000 is purchased by paying cash of $40,000 and the remaining $40,000 will have a credit term of 15 days.
3) Sales revenue of 76,800 is received from retail customers in cash for food provided in April.
4) Sales revenue of $64,000 is received from an organization for party cakes provided to its staff in April. 50% of those fees will be received in cash and the remaining will be settled next month.
5) Rental expenses for 3 months (i.e. for April, May & June) totaling $60,000 is paid in cash.
6) Office supplies of $3,500 is purchased in cash.
7) The balance in (2) is settled in the middle of the month.
8) Advertising expenses incur. in April for $5,500 will be settled in May.
9) Staff salary of $91,500 is settled by the end of April.
10) Utility expenses of 1,500 are paid by the end of April.
(i) Prepare the journal entries for the transactions that occurred in April 2019.
(ii) Prepare the trial balance for Maria Cake Shop as at 30th April 2019. (6 marks)
(iii) Prepare the details of the ledger (T-account) of the item “Cash”.
(iv) Prepare the P&L (Income) Statement for the month of April 2019 and Balance Sheet as of 30. April 2019.
Question 2
(i) Yummy American Food Ltd. was opened on 1st April 2014 and the summary of account balances on 31st March 2015 was shown below:
Part B Answer any TWO (2) questions.
Question 3
(i) Leasing could be a method of financing for the food industry in the acquisition of equipment. There are two types of leasing in general, namely, finance lease and operating lea.. Explain the nature of the two different types of leas
(ii) Trade credit is a popular form of doing business in the food industry between a firm and its suppliers. Briefly describe the nature of trade credit related to the catering business.
(iii) Oishii Japanese Food Supplier Ltd..Id $150,000 of food items to Japanese Retail Ltd on credit settled the amount on 30th April 2018 in cash. Base on this simplified information prepares the accounting entries for Oishii Japanese Food Supplier Ltd. on the 1st and 30th April respectively.
Question 4
(i) Budgets play an important role for organizations of all sizes and forms. Suppose you are the owner of a coffee shop and is going to prepare the budget for the coming year, describe the procedures of preparing your budget. (5 marks)
(ii) Below is the Actual result compared with the Budget for Maria Sushi Bar for the year ended 31st December 2018. Please calculate the empty cells for the budget comparison and indicate whether it is favorable or adverse.
(iii) Variance or deviation is the term used in budget monitoring. Suppose in your budgeting monitoring, you found that the actual result for an “expense” item is greater than the budgeted figure. What does it mean and what needs to be investigated?
Question 5
(i) Delicious Restaurant Group operates cuisines of various kinds and sizes in Hong Kong. Below are the operating results of 2 of its restaurants from 1 January 2019 to 31 December 2019.
(ii) Benchmarking Con is other measurements of the company’s efficiency c y Based on the information that the two restaurants in (i) are in the same group if we are going to do an initial benchmarking exercise, which type of benchmarking is most cost-effective and easy to conduct.
