ACC4001 Accounting Principles and Practices Assessment

Instructions to students

1. Part 2 of Mid-semester test (i.e. Question 3, Question 4, and Question 5) is a continuation of Question 2 of the Mid-semester Test Part 1. It aims to assess the following subject intended learning outcomes (SILOs):
2. Identify business transactions, analyse and record transactions, and prepare financial statement using double-entry accounting principles.
3. Exercise professionaljudgement to solve accounting problems from ethical, social, and regulatory perspectives.

1. Examinable Topics

• Topic 3 Adjustment process
• Topic 4 Completing the cycle

1. Submission requirements

• Individualwork, submission (use Excel file) through Turnitin is due on 02 April 2023.
• You are required to abide by La Trobe University’s principle of Academic Integrity. Academic integrity means being honest in academic work and taking responsibility for learning the conventions of scholarship. We expect the assessment to be the product solely of your own efforts. Do not:
  • Exchange any information about or answers for the assessment with any other person.
  • Undertake the test in close enough physical proximity with any other person to allow that other person to see the answers drafted by you.
  • Copy and paste lecture/tutorial notes or textbooks

1. Assessment task (see p. 2)
2. The total mark of this assessment is 50 which weighs 10% of the subject’s total assessment.

Assessment task

Question 3 Recording business transactions 

(15 Marks)

Question 3 is a continuation of Question 2 (reproduced below)

Danny Wolf recently opened her own financial service office, which she operates as a sole proprietorship. The name of the new entity is Wolverine. Danny experienced the following events during the organising phase of the new business and its first month of operation, April 2023. Some of the events were personal. Others were business transactions.

April 1 Received $100,000 capital contribution from the owner Danny.

Borrowed $30,000 cash from the bank for 12 month-loan, 2% interest rate per year, payable at end of each month.

4 Paid $3,600 cash for a six-month insurance policy. The policy begins 1 April.

8 Paid electricity and gas expense of $800.

15 Purchased a printer for $30,000 ($15,000 on account, and the remainder $15,000 on cash).

18 Performed service for client on account, $4,000.

20 Paid $15,000 for the printer purchased on 15 April.

22 Collected $4,000 in advance for services to be performed later.

25 Performed service for client on credit $4,000.

26 Danny withdrew $1000 cash from the business for personal expenditure.

27 Purchased office supplies for $1000 on account.

28 Paid $2,000 employee salaries.

30 Paid interest expense for the bank loan for April.

Required

3.1 Use Excel to record each transaction in the journal using the following chart of accounts and post the transactions into the T-accounts. Narrations aren’t required. (12 Marks)

Cash, Danny–Drawings, Accounts receivable, Equipment, Office supplies, Service revenue, Prepaid insurance, Salaries expense, Insurance expense, Accounts payable, Interest expense, Interest payable, Loan payable, Unearned revenue, Supplies expense, Wolverine - Capital, Electricity and gas expense

3.2 Use Excel to prepare an unadjusted trial balance as at 30 April 2022 2023 (3 Marks)

Question 4 The adjusting process (15 Marks)

Question 4 is a continuation of Question 3

Required

4.1 Use Excel to prepare an adjusted trial balance, including the adding two columns for the following adjustment data. (12 Marks)

Adjustment data:

1. Accrued salaries expense, $2 000.
2. Depreciation expense $200 was recorded on the printer.
3. Prepaid insurance for April has expired.
4. Office supplies on hand, $200.
5. Unearned revenue earned during the month, $400.
6. Accrued service revenue, $1300.

4.2 Discuss why accrual-based accounting more accurately reflects the financial performance of a business than cash-based accounting. (3 Marks)

Question 5 Completing the accounting cycle (20 Marks)

Question 5 is a continuation of Question 4

Required

5.1Use Excel to prepare SG’s income statement for the month ended 30 April 20223

      (8 Marks)

5.2 Use Excel to prepare SG’s changes in equity statement for the month ended 30 April 20223 (4 Marks)

5.3 Use Excel to prepare SG’s Statement of Financial Position (i.e., balance sheet) for the month ended 30 April 20223. (8 Marks)