ACCT6002 Accounting Fundamentals | My Assignment Tutor

Page 1 of 11 ASSESSMENT BRIEFSubject Code and NameACCT6002 Accounting FundamentalsAssessmentAssessment 2 – Case StudyIndividual/GroupIndividualLength(1,500 words +/- 10%)Learning Outcomesb) Explain the accounting cycle and apply doubleentry accounting principles to process transactions.c) Differentiate between periodic and perpetual inventorysystems and apply appropriate accounting procedures.e) Prepare an accounting worksheet, IncomeStatement, Statement of Changes in Equity andBalance Sheet for sole proprietors and partnerships.g) Interpret, understand and analyse financial statementsfor decision making, and communicate their significanceto accounting and non-accounting professionals.SubmissionBy 11:55pm AEST/AEDT Sunday of Module 5.1 (week 9)Weighting30% Context:The purpose of this assessment is to apply the conceptual and technical aspects ofaccounting and prepare relevant business financial statements. Students are expected tocontenxtualise and evaluate accounting information presented in statements for decisionmaking purposes. Each question uses realistic data and the professional practices similarto that found in workplaces.ACCT6002_Assessment Brief 2_Individual Case StudyACCT6002_Assessment Brief 2_Individual Case StudyPage 2 of 11Submission InstructionDue Date/Time: 11:55pm Sydney time (AEST/AEDT) on Sunday 18th April 2021Please aim to complete this assignment a few days prior to the due date to allow for any unforeseencircumstances such as illness, holidays, family issues, work commitments etc. You may submit theassignment early if you have other commitments around the due date.All times listed are local (Sydney) times. Please ensure you factor in any time difference betweenSydney and your location when submitting your assignment, to avoid incurring any late submissionpenalties.Please note the following important instructions relating to the assignment format and submission:• Note that this is an individual piece of assessment. You will need to work individually toprepare a response to ALL of the questions listed in the assessment.• You must submit your assessment in one Excel file. Any submissions in any other fileformats will not be accepted.• Each question (including all sub-questions) should be presented in a single worksheet. Asthere are 5 questions in this assessment, your Excel file should contain 5 worksheets intotal.• You cannot scan handwritten responses and submit. All answers must be typed in Excel.• Your assessment needs to be submitted though the submission link available on theBlackboard. Assignments submitted via e-mail (or any other method) will NOT be accepted.• Make sure that you upload the correct file. If you discover (after the due date) that you haveuploaded a draft version or the wrong file completely, you will not be allowed to submit asecond file.ACCT6002_Assessment Brief 2_Individual Case StudyPage 3 of 11Question 1: Preparation of Adjusted Trial BalanceCliff Clarendon operates a small retail store. The unadjusted trial balance of Cliff’s Retail Store isshown below. Cliff’s Retail StoreUnadjusted Trial BalanceAs at 30th June 2020AccountDebit ($)Credit ($)Cash at Bank35,000Accounts Receivable5,000Inventory14,600Office Supplies2,400Motor Vehicle15,000Accumulated Depreciation– Motor Vehicle4,000Accounts Payable3,000Cliff Clarendon, Capital44,000Cliff Clarendon, Drawings2,000Sales Revenue57,000Sales Returns andAllowances2,000Purchases15,000Purchases Returns andAllowances4,000Salaries Expenses11,000Rent expense10,000Total112,000112,000 ACCT6002_Assessment Brief 2_Individual Case StudyPage 4 of 11The following additional information was not considered while preparing unadjusted trial balance:a) The Sales Revenue account includes $5,000 for the services to beprovided in August 2020.b) The rent expense account includes an amount of $1,000 paid in advancefor July 2020.c) The unused office supplies on hand totalled $1,500.d) Estimated depreciation on the motor vehicle is $2,000.Note: In addition to those accounts listed in unadjusted trial balance, the chart ofaccounts of Chiff’s Retail Store contains the following accounts: Prepaid rent,Unearned Revenue, Office Supplies Expense and Depreciation Expense.RequiredPrepare adjusted trial balance using the template provided over the page. Cliff’s Retail StoreWorksheet as at 30 June 2020Unadjusted Trial BalanceAdjustmentsAdjusted Trial BalanceAccount NameDrCrDrCrDrCrCash at Bank35,000Accounts Receivable5,000Inventory14,600Office Supplies2,400Motor Vehicle15,000AccumulatedDepreciation – MotorVehicle4,000Accounts Payable3,000Cliff Clarendon,Capital44,000Cliff Clarendon,Drawings2,000Sales Revenue57,000Sales Returns andAllowances2,000Purchases15,000Purchases Returnsand Allowances4,000Salaries Expenses11,000Rent expense10,000Total112,000112,000 Question 2: Journal EntriesACCT6002_Assessment Brief 2_Individual Case StudyPage 6 of 11Haro Bicycles is a retail business that purchases racing bicycles from suppliers and sells them tocustomers at a higher price. The business is registered for GST and uses perpetual inventorysystem. The following transactions occurred during March 2021. DateDetailsMar-03Purchased 500 bicycles on credit for $385 each (plus GST) from RedlineCentral, terms 5/15, n/30.Mar-05Sold 275 bicycles on credit to Sun Bicycles for $572 (including GST); terms3/10, n/30.Mar-09Received credit for the 8 damaged bicycles returned to Redline Central.Mar-11Paid Redline Central for the purchase of bicycles on 3rd March.Mar-13Sun Bicycles returned 6 bicycles as they were defective. Credit was grantedfor returned products.Mar-14Received payment from Sun Bicycles for the sales on 5th March. Note: Haro Bicycles’s chart of accounts contained the following accounts: Cash at Bank,Inventory, Accounts Receivable, GST Receivable, Accounts Payable, GST Payable, Sales, SalesReturn and Allowances, Discount Received, Discount Allowed, Cost of Sales.RequiredPrepare journal entries for the above transactions for the month of March 2021 for Haro Bicycles.ACCT6002_Assessment Brief 2_Individual Case StudyPage 7 of 11Question 3: Preparation of Financial StatementsFinancial statements for Katherine’s Retail Shop are prepared annually. The adjusted trial balanceamounts at June 30 are shown below. Katherine’s Retail ShopWorksheet as at 30 June 2020Adjusted Trial BalanceAccount NameDrCrCash at Bank39,000Accounts Receivable10,000Inventory (1st July 2019)19,600Office Supplies1,280Motor Vehicle20,000Accumulated Depreciation –Motor Vehicle8,000Accounts Payable1,050Mortgage payable45,000Katherine, Capital29,500Katherine, Drawings6,000Sales Revenue59,650Sales Returns2,900Purchases24,500Purchase Returns2,500Salaries Expense12,000Rent Expense6,000Interest Expense2,700Unearned Revenue1,300Interest Payable900Office Supplies Expense1,920Depreciation Expense2,000Total147,900147,900 The end-of-period stocktake shows an inventory balance of $11,320 on 30 June.RequiredPrepare the following:a) the closing entries on 30th June 2020.b) Income Statementc) Statement of Changes in Equityd) Balance Sheet in narrative formatACCT6002_Assessment Brief 2_Individual Case StudyPage 8 of 11Question 4: Special JournalsJustin opened a corner store on 1 July 2020. He balances his books at the end of each monthand uses special journals and the periodic inventory system. Transactions for July 2020 wereas follows: DateDetails5-JulPurchased inventory from Orion Ltd. on account for $6,500 plus GST. The creditterm is 2/15, n/30.14-JulSold $2000 inventory plus GST to Metro Ltd, the credit term is 3/10, n/30.18-JulPaid Orion Ltd. for 5th July purchase. Cheque No.103.27-JulReceived cash payment from Metro Ltd.31-JulRecorded depreciation expense for furniture, $300. The chart of account for Justin’s Corner Store is shown below: Cash at Bank100Accounts Receivable Control110Office Supplies120GST Receivable140Furniture150Accumulated depreciation – Furniture 151Purchase501Purchase Return and Allowances502Discount Allowed510Salary Expense520Depreciation Expense530Required Accounts PayableControl 200GST Payable 210Justin, Capital 300Sales 400Discount Received 401Prepare the journal entries for the transactions above in the relevant journal books. Use CashReceipts Journal, Cash Payments Journal, Purchases Journal, Sales Journal and GeneralJournals where applicable. For each transaction, you need to do only one journal entry.You may use the templates provided over the page.ACCT6002_Assessment Brief 2_Individual Case StudyPage 9 of 11Cash Receipts Journalp. 1. DateAccountPostRef.DebitsCreditsCashatBankDisc.AllowedGSTPayableSalesPayable GSTRecei. Acc.Other Cash Payments Journalp. 1. DateAccountCh.No.PostRef.DebitsCreditsOtherAcc.PayablePurchaseRec. GSTCash Bank atReceived Disc.Rec. GST Purchases Journalp. 1. DateAccountTermsPostRef.PurchasesReceivable GSTAccounts Payable Sales Journalp. 1. DateAccountTermsPostRef.SalesPayable GSTReceivable Accounts ACCT6002_Assessment Brief 2_Individual Case StudyPage 10 of 11General Journalp. 1. DateAccountPostRef.DebitCredit ACCT6002_Assessment Brief 2_Individual Case StudyPage 11 of 11Question 5: Financial Statement AnalysisSarah works at a public company called JPG Manufacturing Ltd. She has observed that thecompany is trying to expand its operation in the market over the past one year. The managementhas heavily invested in plant and equipment over this period. Considering the high growth potentialof the business, Sarah is planning to invest in this company by purchasing shares. She consultedwith her friend Linda regarding this plan. After reviewing JPG Manufacturing’s balance sheet forpast two years, Linda commented, “While I understand that this company is focusing on growth,they have taken a risky approach to achieve the growth”. Do you agree with Linda’s comment? Whyor why not? Justify your answer.Note: You will not be penalized if you do not use financial statement analyses ratios to answerthis question. You need to provide explanation of why you agree or not-agree with Linda’scomment. JPG Manufacturing LtdComparative Balance SheetAs at 30th June 2019 and 20202019 2020ASSETSCurrent AssetsCash at Bank 35400 9,300Accounts Receivable 62700 76,650Inventory 48000 60,600Other current Assets 9600 8,850Total Current Assets 155700 155400Non-current AssetsLand and Building 81000 81,000Plant and Equipment 93000 285,000Furniture 8700 7,950Long-term investment 13800 13,500Total Non-current Assets 196500 387450Total Assets 352200 542850LIABILITIESCurrent liabilitiesAccounts Payable 78600 78,150Total current liabilities 78600 78150Non-current liabilitiesLong-term debt 123600 313,200Total non-current liabilities 123600 313200Total Liabilities 202200 391350EQUITYShare Capital 150000 151,500Total Equity 150000 151,500Total Liability and Equity 352200 542,850 Learning Rubric: Assessment 2 AssessmentCriteriaFail(Unacceptable) 0-49%Pass(Functional)50-64%Credit(Proficient)65-74%Distinction(Advanced)75 -84%High Distinction(Exceptional) 85-100%Understandingand ability toanalyse and/orcritiqueaccountingtechniques andmethods used inpractice andfinancialinformation thatare prepared.10%Shows very little to nounderstanding of how toapply the accountingsystem technique to thecase study questions.Key components of theassignment are notaddressed.Demonstrates little to nocapacity to explain andapply relevant concepts.Has answered most partsincorrectly.Shows limitedunderstanding of how toapply the accountingsystem technique to thecase study questions.Has answered some partsincorrectly.Thorough knowledge orunderstanding of theaccounting systemtechniques relevant tothe case study.Highly developedunderstanding of theaccounting systemtechniques relevant to thecase study.A sophisticatedunderstanding of theaccounting systemtechniques relevant to thecase study. Knowledge andunderstanding ofaccounting concepts,techniques andprocesses40%Limited awareness ofrelevant accountinginformation required forbusiness decisionsDifficulty and/orconfusion in identifyingcorrect accountingconcepts, tools andprocesses required forcase study questionsUnderstanding and beingable to identify relevantaccounting informationfor business decisionsUnderstanding a range ofaccounting techniques andprocesses available forgenerating and analysinginformationAbility to use appropriateaccounting techniques andprocessesUnderstanding rationalefor selecting specificaccountingtools and processesUnderstanding and beingable to explainquantitative andqualitativecharacteristics ofaccounting informationuseful for businessdecisionsThoroughly understanding theaccounting concepts,techniquesand processesBeing able to justify selection ofspecific accounting tools andprocessesThoroughly understandingaccounting concepts,techniques and processes,and accounting informationrequired for solving practicalproblemsBeing able tocritically justifyselection ofapplicableaccounting tools andprocessesDiscuss and applyaccounting tools,concepts andtechniques to prepareaccounting informationthat is useful fordecision making,40%No or little use ofaccounting informationfor decision makingDifficulty and/orconfusion in preparingaccounting reportsDifficulty and/orconfusion in identifyingand applying correctaccounting proceduresApplying correct steps inpreparingaccounting reportsApplying appropriateaccounting proceduresIdentify and explainquantitative andqualitativecharacteristics ofaccounting information,which are useful forbusiness decisionsAnalysing quantitative andqualitative characteristics ofaccounting information, andapplying analysis tosolve practical problemsCorrectly preparing andinterpreting differentaccounting statements.Correctly preparing andinterpreting differentaccounting statements.Critically justifying businessdecisions using relevantaccountinginformation Effectivecommunication10%Difficulty in explainingrationale for selectedaccounting tools andprocessesMostly clear informationpresentation, with someminor errorsEvidence of attempts tomake clear to audience, therationale and application ofselected accounting toolsand processesMostly clear andunderstandablepresentation ofinformationClearly presented andadequately justifiedresponsesGood references toquantitative and qualitativeinformation where applicableClearly presented andadequately substantiatedresponses, which indicate fullunderstanding and thoroughapplication of relevantaccounting tools andprocessesSufficiently substantiateddiscussion of quantitativeand qualitative information

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