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ACCT1110 Financial Reporting and Analysis
2024-1
Individual Assignment – V4
On 1 February 2024, Emily Eager started a coffee van business. The coffee van has historically been used to service various events, sporting clubs and schools mostly on weekends. She registered the business as Spry Coffee & Snacks and formed a private (Pty Ltd) company in the same name. Emily is to be the sole shareholder of the company. Emily has spoken with an accountant and agreed to use the following account names and numbers for recording the business transactions. Emily is aware she will require a Brisbane City Council licence to conduct the business from the coffee van. No new general ledger accounts are required to be established or added to the chart of accounts.
|
Nature |
Account no. |
Account Description |
|
Assets |
101 |
Cash at bank |
|
|
111 |
Accounts receivable |
|
|
151 |
Plant and equipment |
|
|
161 |
Motor vehicles |
|
Liabilities |
201 |
Accounts payable |
|
|
251 |
Bank loan |
|
Equity |
301 |
Share capital |
|
Income |
401 |
Revenue |
|
Expenses |
601 |
Advertising and licensing expenses |
|
|
611 |
Bank and credit card charges |
|
|
621 |
Insurance expenses |
|
|
641 |
Motor vehicle expenses |
|
|
651 |
Consumable expenses |
|
|
661 |
Wages expense |
Listed below are the events that have occurred during the first month of the Spry Coffee & Snacks Pty Ltd business (ignore GST).
Month Day Event
February 1 Emily opened a business bank account to begin the business, contributing $10,000 cash in exchange for shares in the company. The company obtained a bank loan for $25,000. The loan will be repaid in 5 years’ time (treat as a non-current liability). The bank has offered the loan interest-free for the first 6 months, so there is no interest on the bank loan for the first 6 months.
1 Emily was able to transfer the business phone number to an old mobile phone she owns.2 A business insurance package, including public liability insurance, was arranged by Emily with Small Business Insurance Pty Ltd. The annual cost is $1,500, which will be invoiced in twelve monthly instalments. The first monthly insurance expense of $125 was directly debited from the business bank account.
4 Purchased a used coffee van at a cost of $22,000. Various related coffee machines and fridges were also purchased for $2,600.
7 Consumable items including coffee beans, milk and snacks were purchased from a supplier for $1,020 on credit. These items will all be used in the month.
8 A local school requested a quote for attendance at their annual athletics carnival to be held later in the month. The quote provided to the school was for $1,200 with all takings on the day being processed through the school's EFTPOS machine. Terms included in the quote are payment due within 7 days of the carnival date. The school will respond to Emily within 5 working days.
9 Emily applied for a one-off mobile food business licence. She paid the fee of $865 by transfer from the business bank account.
12 The local school advised they have accepted the quote and returned the signed quote accepting all terms and conditions.
12 Cash of $1,145 was received from sales at a local sporting club over the prior weekend. It was deposited into the business bank account. Invoices for other work completed on the weekend were issued for $1,280 for which payment has not been received.
15 Planning for the local school job was undertaken by Emily who arranged for a casual employee to assist on the day. The casual employee, a trained barista, charges $38 per hour and is expected to be needed for 6 hours.
16 Paid $816 of the suppliers’ invoices received on 7 February by transfer from the business bank account.
18 Issued an invoice for $1,200 to the local school for the work completed on the prior weekend.
22 Received payment of the invoice issued on 18 February from the local school for the carnival of $1,200.
26 Recorded revenue from the prior weekend of $1,350 on credit. Cash sales of $1,175 were deposited to the business bank account. The invoices issued on 12 February for $1,280 remain outstanding.
28 Paid Emily's monthly wages expense together with the casual employee’s wages for the local school event totaling $2,895.
29 Motorpass fuel card statement in the amount of $210 was received. The statement, which represented fuel costs for the coffee van during the month, was paid by transfer from the business bank account.
Required
1) For those of the above that are transactions, prepare the general journals for the month ended 29 February 2024. Narrations are not required, however dates must be clearly specified, and no depreciation or other adjusting entries are necessary. (15 marks)
2) Post all the journals from (1) above to the general ledger and prepare a trial balance as at 29 February 2024. (18 marks)
3) Prepare the following for Spry Coffee & Snacks Pty Ltd:
a) Statement of Profit or Loss for the month ended 29 February 2024.
b) Calculation of retained earnings for the month of February 2024.
c) Classified Statement of Financial Position as at 29 February 2024. (12 marks)
(Total = 45 marks which equals 15% of the total course mark)
A template for you to use to answer this assignment is given in the following pages. You are welcome to adapt it (e.g. add more pages).
Question 1 Solution
For those of the above that are transactions, prepare the general journals for the month ended 29 February 2024. Narrations are not required, however dates must be clearly specified, and no depreciation or other adjusting entries are necessary. (15 marks)
General Journal
Date Account Post Ref. Debit Credit
Post all the journals from (1) above to the general ledger and prepare a trial balance as at 29 February 2024. (18 marks)
· An example is given below of the first general ledger account, Cash at bank.
· Please copy this format for the other general accounts that you need and then post your journals into the general ledger accounts.
· Balance any accounts that have more than one entry/posting.
· Any accounts with just one entry do not need to be balanced for this assignment.
· You don’t need to include general ledger accounts that have no postings or entries.
· You must also prepare a trial balance once you have posted all your entries.
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No. 101 |
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Date |
Details |
Debit |
Date |
Details |
Credit |
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3) Prepare the following for Spry Coffee & Snacks Pty Ltd:
a) Statement of Profit or Loss for the month ended 29 February 2024.
b) Calculation of retained earnings for the month of February 2024.
c) Classified Statement of Financial Position as at 29 February 2024.