IMPORTANT - Failure to follow these instructions may result in your assignment not being marked, so please read them carefully.
IMPORTANT - Failure to follow these instructions may result in your assignment not being marked, so please read them carefully.
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QUESTION 1: Balance Day Adjustments and Posting to General Ledgers (26 marks)
Below is the unadjusted Trial Balance for the year ending 30 June 2022 for Silver Masts Accommodation, a business specialising in providing short stay accommodation in newly renovated historical homes. It is owned and operated by Suzanna.
Suzanna is the sole proprietor and keeps records of the business in good order with the help of a bookkeeper. At year end the bookkeeper sends the required information to Copeland & Johnson Accounting Services who complete the necessary balance day adjustments and prepare the end of year financial statements.
Silver Masts Accommodation
Unadjusted Trial Balance
For the year ending 30 June 2022
Debit ($) Credit ($)
Cleaning Expense - Accommodation 65 400 Gas Expense Office 2 100 Water Expense - Accommodation 23 752 Gas Expense Accommodation 12 884 Motor Vehicle 45 000 Cash at Bank 41 896 Term Deposit matures 1 August 2025 200 000 Furniture & Fittings - Accommodation 167 630 Office Equipment 7 824 Rental Returns & Allowances 1 060 Interest expense 9 200 Electricity Expense - Accommodation 17 400 Capital, Suzanna 264 475
Accounts Receivable 650 Loan 78 550
Accumulated Depreciation Motor Vehicle 9 000
Rent Expense - Office 30 256 Bookkeepers Wages Expense 41 454 Laundry Expense 45 490 Mobile Phone and Internet Expense 3 600 Advertising Expense 24 700 Cleaning Expense - Office 20 000 Accounts Payable 10 233
Office Supplies Expense 2 350 Drawings, Suzanna 53 065 Repairs & Maintenance Expense - Accommodation 182 683 Repairs and Maintenance Payable 10 700
Rental Sales Revenue 636 701
Accumulated Depreciation Furniture & Fittings 32 625
Accrued Rent - Office 2 250
Discount Allowed - Accommodation 1 300 Insurance Expense - Office 18 840 Insurance Expense Accommodation 26 000 Totals 1 044 534 1 044 534
On the following page is additional information that Suzanna has provided to you in relation to the year ended 30 June 2022.
QUESTION 1: Balance Day Adjustments and Posting to General Ledgers (continued)
You are a Graduate Accountant at Copeland & Johnson Accounting Services. It is now the end of the financial year and based on the information provided below by Suzanna, you have been asked you to prepare any necessary balance day adjusting journals.
Bookkeepers wages which are payable but have not yet been recorded as at 30 June 2022 are $9,350.
Both the Furniture & Fittings and the Motor Vehicle are expected to be used evenly over their useful lives. The expected total useful lives and residual values of both assets is as follows:
Estimated Useful life Estimated Residual
Furniture & Fittings 10 years $5,000
Motor Vehicle 8 years $15,000
During the year, Suzanna also purchased a new computer and printer package for the office. The package cost $7,824 and was purchased on 1 February 2022. Suzanna has estimated that the computer and printer package depreciate by 25% per year with no residual value.
On 30 June 2022, Suzanna reviewed her outstanding Accounts Receivable balance. Based on her previous experience, she has estimated that 3% of this balance is unlikely to be collected.
A customer paid $3,720 on the 25 June 2022 for an accommodation booking commencing on the 25 August 2022. At the time the money was received, Suzanna recorded this amount as Rental Sales Revenue.
On 1 November 2021, Suzanna took out a 2-year insurance policy for the office for the first time which cost $18,840. This policy was recorded as Insurance Expense Office.
Suzannas last mobile phone and internet bill for the business was for the month ending 31 May 2022, and this account was paid in early June. She has not yet received the June account but has estimated that the cost of her telephone and internet usage up until 30 June 2022 was $300.
On the 30th June Suzanna shut the office for the afternoon and met with her friends Mei and Louise at Harbourside Caf to celebrate Meis birthday. Suzanna paid $120 from her personal bank account for the lunch.
Part 1 [20 marks]
REQUIRED:
Use the General Journal document provided on the next page to record the correctly formatted journal entries required and include a narration (explanation) for each entry. If an entry is not required, please state no entry required and explain why the entry is not required referring to the appropriate accounting assumption / concept presented in the ACCT1008 course materials.
QUESTION 1: Balance Day Adjustments and Posting to General Ledgers (continued)
General Journal
Date Details Debit ($) Credit ($)
QUESTION 1: Balance Day Adjustments and Posting to General Ledgers (continued)
General Journal
Date Details Debit ($) Credit ($)
QUESTION 1: Balance Day Adjustments and Posting to General Ledgers (continued)
Part 2 [6 marks]
REQUIRED:
Suzanna is unsure how to complete the General Ledger accounts and asked for some assistance.
Post the relevant Balance Day Adjustment Journals from Part 1 to the General Ledgers provided. Both ledgers must be footed.
***use the tab function to navigate through the ledgers. It is acceptable to abbreviate account names if required for formatting.
***only complete the ledgers provided do not create any more ledger accounts.
Rental Sales Revenue
Date Details $ Date Details $
Insurance Expense Office
Date Details $ Date Details $
QUESTION 2: Financial Statement (34 marks)
Suzannas business Silver Masts Accommodation is located in a very popular harbourside tourist area. Around the corner from Silver Masts Accommodation is a small convenience store called Just What You Need which is owned and operated by Mei Chan. Just What You Need has a very small range as it is aimed at tourists who are staying for a short time. Inventory includes bread, the local paper, milk, chocolate, toilet paper, toothbrushes etc. Mei Chan works very long hours and as a result has very little time to do the bookkeeping for her business. Despite how busy she is Mei does all she can to prepare the business records for the accountants. Mei has prepared the following Trial Balance for Just What You Need but she realises it is not in the correct order.
Just What You Need
Adjusted Trial Balance
For the year ending 30 JUNE 2022
Debit ($)Credit ($)
Shop Furniture & Fittings 39 400 Accounts Receivable 46 089 Office Electricity Expense 1 000 Accumulated Depreciation Shop Furniture & Fittings 9 020
Office Rent Expense 3 650 Cash at Bank 48 487 Advertising Payable 9 947
Sales 545 000
Shop Electricity Expense 568 Purchases 386 210 Mei, Capital 44 810
Depreciation Expense Shop Furniture & Fittings 3 550 Interest received 2 310
Freight Inwards 2 820 Shop Rent Expense 25 650 Accounts Payable 10 597
Discount Allowed 3 725 Inventory (1 July 2021) 20 960 Shop Salaries Expense 28 300 Loan Payable 33 600
Allowance for Doubtful Debts 1 000
Fuel Expense Delivery Van 3 200 Prepaid Advertising 1 540 Interest Payable 620
Advertising Expense 6 547 Purchase returns and allowances 5 421
Interest Expense 470 Doubtful Debts Expense 1 000 Mei, Drawings 18 500 Insurance Expense 1 900 Sales Returns & Allowances 8 630 Discount Received 3 171
Office Salaries Expense 13 300 TOTALS 665 496 665 496
**The loan was taken out on 30 June 2022 and is payable in equal amounts over 48 months**
**A physical stocktake of inventory at 30th June 2022 revealed $46 750 on hand.
**Insurance was paid to cover the office equipment.
QUESTION 2: Financial Statement (continued)
In your role as a Graduate Accountant at Copeland & Johnson Accounting Services you have been supplied with the following adjusted Trial Balance for Just What You Need, prepared at the end of the financial year by Mei Chan.
REQUIRED:
Using the Trial Balance provided above, prepare the following for the period in question:
Fully classified Income Statement[16 marks]
Statement of Changes in Equity [4 marks]
Fully classified Balance Sheet (Narrative format)[14 marks]
Answer on following page (insert additional pages as required)
QUESTION 2: Financial Statement (continued)
Using the Trial Balance provided above, prepare the following for the period in question:
Fully classified Income Statement[16 marks]
QUESTION 2: Financial Statement (continued)
Using the Trial Balance provided above, prepare the following for the period in question:
Statement of Changes in Equity [4 marks]
QUESTION 2: Financial Statement (continued)
Using the Trial Balance provided above, prepare the following for the period in question:
Fully classified Balance Sheet (Narrative format)[14 marks]
QUESTION 3: Accounting Concepts (17 marks)
As part of your continuing professional development as a graduate accountant at Copeland & Johnson Accounting Services, the Managing Partner (Scott Johnson) has asked you to assist Suzanna the proprietor of Silver Masts Accommodation.
Scott Johnson has met with Suzanna, and he advises you that she is quite concerned at the accuracy of Rental Sales Revenue account as a result of the Balance Day Adjustment journal you prepared (see Question 1 transaction 5).
Required:
Identify and explain to Suzanna what element* each account is that you used in the Balance Day Adjustment journal at Question 1 transaction 5 and why you consider them to be these elements. You must use the element definitions presented in Topic 1 to support your answer.
Explain to Suzanna using the accrual accounting concept why you prepared the Balance Day Adjustment at Question 1 transaction 5.
Explain to Suzanna the impact on profit (direction and dollar amount) that would have occurred if you had not prepared the Balance Day Adjustment (see Question 1 transaction 5).
*(Element Asset, Liability, Equity, Income, Expense)
Scott Johnson has asked that you prepare your responses in a formal business letter addressed to him (not the client). He will then review your work, and if appropriate your letter will be used as the basis of a response to Suzanna.
The remaining 2 marks will be awarded for following the formatting requirements below:
Date your letter 11 November 2022
Address your letter to Scott Johnson (Managing Partner), Copeland & Johnson Accounting Services, 232 Rush Rd, Glebe, SA, 5333.
Any formal business letter format is acceptable. Please note that a template has not been provided. Students are expected to research business letter formats themselves. Information regarding the structure of business letters is provided in the UniSA Library Assignment Help guide located in the Assessment menu option on the ACCT1008 learnonline site.
Set out your letter with subheadings to separate each part of your letter
Use of an appropriate professional way to begin and end your letter. You must consider the context of the letter who are you writing it to, and how would you communicate with them?
The use of appropriate language, accounting terminology and reference in your letter to the specific information presented in the question.
No specific word count is prescribed. However, given the nature of the questions, it would be expected that the entire letter (including address and signoff) should require no more than one A4 page.
(Letter to commence overpage)
QUESTION 4: Closing Entries (25 marks)
Louise is the sole proprietor of Louises Laundry Service. Louise is good friends with Suzanna and Mei. Louises Laundry Service is contracted by Silver Masts Accommodation to pick up the sheets, towels and tea towels from each house after a guest party has left, replace them with clean linen and take away the used linen and wash it. She also offers a dry-cleaning service and Meis convenience store is an agent for Louises Laundry Service
One evening when Suzanna, Mei and Louise were out to dinner, Louise was explaining that she had no idea how to close off the accounts at the end of the financial year. Suzanna and Mei suggested she contact Copeland & Johnson Accounting Services again and ask for you, as they have both been very happy with the work you have done for them.
During her appointment with you, Louise hands over the following Trial Balance she prepared in alphabetical order:
Louises Laundry Service
Trial Balance
For the year ended 30 June 2022
Debit ($) Credit ($)
Accounts Payable 1 250
Accounts Receivable 11 856 Accumulated Depreciation Delivery Van 14 489
Accumulated Depreciation Washing Machines 15 042
Advertising Expense 1 250 Capital Louises Laundry Service 153 708
Cash at Bank 49 333 Computer 1 500 Delivery Van 31 150 Discount Allowed 919 Drawings Louises Laundry Service 40 415 Electricity Expense 9 165 Interest Expense 4 429 Laundry Supplies Expense 1 713 Loan 23 200
Mobile Phone & Internet Expense 1 555 Office Gas Expense 2 275 Rent Expense 52 354 Repairs and Maintenance 3 637 Repairs and Maintenance Payable 4 913
Sales 170 731
Sales Returns & Allowances 473 Washing Machines 168 648 Water Expense 2 661 Total 383 333 383 333
REQUIRED
The Managing Partner has requested that you assist Louise by preparing the following:
Closing entries based on the Trial Balance provided above, and
A post-closing Trial Balance for the year ended 30 June 2022.
General Journal closing entries[18 marks]
Date Details Debit ($) Credit ($)
Post-closing Trial Balance[7 marks]
Shiny Bright Cleaners
Post-closing Trial Balance
For the year ended 30 June 2022
Debit ($) Credit ($)
Total
WRITTEN COMMUNICATION SKILLS
The following aspects of students written communication skills development are also awarded a total of 15 marks.
PARAPHRASING
Presenting ideas and information that student read in their own words,
Not simply taking what someone else has written and changing a few words. It is about translating another persons ideas into the students own words.
Mark (maximum 5):
BEING RELEVANT
Does what is written contribute to answering the question(s)
Setting out to specifically answer the question(s) by using relevant information,
Staying on track with answers,
Avoiding straying from the question and going off on irrelevant tangents.
Mark (maximum 5):
WRITING FOR A PROFESSIONAL BUSINESS AUDIENCE (including good presentation)
The written work is clear and understandable,
Where applicable, the written work is based on the facts and available evidence,
Exaggeration and bold statements which are not supported by the facts and evidence are avoided.
Good presentation
The written work contains no spelling and grammatical errors. Obvious evidence of editing displayed. (Where the work contains any spelling and grammatical errors, it cannot be awarded 5 marks),
Any headings and subheadings display properly, and are used consistently throughout the document,
Page numbering is used. It is usual for page numbering to commence on page 2 of a business document as 2,
Font size and font style are used consistently throughout the document,
If applicable, requested templates are used.
Mark (maximum 5):
TOTAL WRITTEN COMMUNICATION SKILLS MARK (maximum 15)
