Assignment Instructions
For this assignment, you are required to apply principles of double-entry and accrual accounting to prepare journal entries, T-accounts, balance-day adjustments/adjusting entries and financial statements using the following steps:
1. Analyse the transaction provided.
2. Follow the rules/tips stipulated in the question.
3. Enter your answers into the Word document ‘ACW1120A’ at the designated space provided.
4. State your question number when you answer the assignment question. There are 6 questions.
5. Start a new page to answer each question.
6. Use the template provided to prepare journal entries and T-accounts.
7. Insert the Marking Rubric on the final page of your document. Fill up your group number.
8. Present your answers to each question appropriately, including presentable financial statements. You must ensure proper alignment of the numbers in the journal, T accounts and financial statements and write proper narrations. Your grade achieved will depend on the accuracy and presentation of your answers.
9. Demonstrate teamwork among your group members. It is at the discretion of the Chief Examiner to penalise any non-compliance with this requirement.
10. You are encouraged to revise the materials posted at Moodle, including workshop questions and practice questions/past year questions posted for the following topics, before you can complete the assignment:
a) Learning/Week 2- Recording transactions (Drs and Crs) and postings from the journal to the ledgerb) Learning/Week 3 – Balance-day adjustments/ adjusting entriesc) Learning/Week 4 - Refer to Moodle for relevant past-year questions.d) Learning/Week 5- Preparing Trial Balance, Income Statement and Statement of Financial Position.e) Learning/During the break/Assessment/2. Assessment 2 Group Assignment for past year questions and Frequently Asked Questions (FAQ).
Tip: Refer to PYQ 'Rose' to prepare your financial statement.
11. See your tutor during the consult session if you have questions about the assignment.
12. You can refer to the file ‘Guide for Moodle Submission’ for the step-by-step of submitting your PDF at the submission link.
Assignment Question
Information about the business
|
Proprietor |
: Ms. Cheerful |
|
Name of business |
: Amaze Gym and Yoga Centre |
|
Principal activities of business: Provide gymnasium facilities, yoga and dance courses |
|
|
The business was purchased on May 31, 2023, by acquiring the following assets and liabilities: |
|
|
Stationery supplies |
$962 |
|
Gym Equipment |
$33,582 |
|
Bank Loan (due June 2024) |
$55,994 |
|
Accounts Payable |
$17,510 |
|
Motor Vehicle |
$77,236 |
|
Accounts Receivable |
$47,598 |
|
Cash at Bank |
$31,382 |
|
Capital |
? |
Transactions took place in the month of June 2023:
|
Date |
Description |
Amount ($) |
|
June 1 |
Paid general insurance premium |
5,216 |
|
June 3 |
Yoga fees |
6,424 |
|
June 6 |
Purchase stationery supplies |
1,634 |
|
June 7 |
Paid rental of business premises |
8,298 |
|
June 9 |
Payment to suppliers - on account |
3,324 |
|
June 10 |
Gym fees – on account |
4,712 |
|
June 13 |
Dance fees |
10,930 |
|
June 14 |
Cash withdrawals by Ms Cheerful for her own use |
2,168 |
|
June 15 |
Monthly maintenance charge of Gym equipment |
906 |
|
June 17 |
Receive from customers on account. |
5,622 |
|
June 20 |
Advertising on Facebook to promote the centre – on account |
2,8965 |
|
June 21 |
Services from a third-party cleaner to clean the gym and yoga centre – on account |
936 |
|
June 22 |
Yoga Fees – on account |
4,416 |
|
June 23 |
Paid advertising charges to promote the services to new customers via leaflets and banners |
1,480 |
|
June 24 |
Food catering for a dinner party with staff and teachers/instructors to celebrate the startup of the business |
1,700 |
|
June 27 |
Gym Fees |
7,412 |
|
June 29 |
Additional cash contributed by Ms Cheerful |
7,160 |
|
June 30 |
Paid Staff Salaries |
8,832 |
|
June 30 |
Paid an accounts staff for her Grab taxi claim for banking matters |
86 |
Additional Information
1. Illustrate different types of revenue. All revenues received are for the month of June 2023. (Tip: Use an appropriate name for each T-account of revenue).
2. Use one ‘Accounts Receivable’ account for all customers and one ‘Accounts Payable’ account for all suppliers.
3. Unless otherwise indicated, all transactions are on a cash basis. Use only the ‘Cash at Bank’ account.
4. All expenses start on June 1.
5. Rental expense is initially recognized as an asset (Asset Approach), while insurance expense is initially recognized as an expense (Expense Approach).
6. Refer to the following information for the adjusting entries/balance-day adjustments:
a) Closing stock of stationery supplies on 30/6 ($) $ 1,396.00
b) Gym Equipment scrap value ($) $ 8,692.00
c) Gym Equipment useful life (years) 3
d) Rent paid for (months) 5
e) Insurance paid for (months) 2
f) Motor vehicle scrap value ($) $ 7,958.00
g) Motor vehicle useful life (years) 8
h) Bank loan interest rates (% per year) 9
i) Use 360 days in a year for interest calculation.6
7. Show all your workings of the balance day adjustments as part of your narrations. For example: Being advertising expenses for June 2023 (12,000x 2/12=$2,000)
8. Whenever relevant, specify in the narration which month(s) the expense is related to when recording the transactions and the balance-day adjustments. You can write using your preferred style.
For example:
Payment of rental expenses from Jan-April 2023 (4 months), or Payment of rental expenses for 4 months (Jan- April 2023).
9. Use two decimal points.
10. Use a comma as a separator for figures more than 1,000, such as 2,565 or 1,296.
Required
Q1. Prepare journal entries for all the transactions in June 2023. Narrations are required.
Tip: Journal entries for the business acquisition on May 31 are not required. (38 marks)
Q2. Prepare journal entries for all balance-day adjustments/ adjusting entries for June 2023.
You need to refer to the additional information given. Narrations and workings are required.
Tip: Show the workings in the narrations.
Tip: Closing entries of all revenue and expenses to the income statement are not required. (12 marks)
Q3. Prepare the general ledger T-accounts showing the opening balance, transactions, balance day adjustments, and closing balance for June 2023. Also, show the opening balance for the following month.
Tip: Give a number for all the T-accounts created, commencing from no. 1. For example, if you have created 25 T-accounts, you will have T-account no 1 to 25. (18 marks)
Q4. Prepare the adjusted trial balance as at June 30, 2023, after including all transactions and balance-day adjustments. (2 marks)
Q5. Prepare the income statement for the month ended June 30, 2023, using the classification of Revenue and Expenses (ignore Goods and Service Tax and income tax). (15 marks)
Q6. Prepare the statement of financial position as at June 30, 2023, using the classification of current and non-current portions of assets and liabilities. Show the movement of retained earnings in the statement of financial position. (15 marks)
(Total= 100 marks)
ACW1120 GROUP ASSIGNMENT
THE MARKING RUBRIC for Group Number:
|
Criteria for Evaluation |
Weight |
HD (80-100%) |
D (70-79%) |
CR (60-69%) |
P (50-59%) |
N (0-49%) |
|
The group:
Applies the principles of double entry and accrual accounting
|
50% |
Consistently and accurately applies relevant principles of double-entry and accrual accounting to the given situation. |
Accurately applies relevant principles of double-entry and accrual accounting to the given situation. |
Applies relevant principles of double entry and accrual accounting to the given situation. |
Applies principles of double-entry and accrual accounting to the given situation but with major errors. |
Unable to apply the principles of double-entry and accrual accounting to the given situation. |
|
The group:
Prepares financial statements for business entities
|
50% |
Prepares clear, detailed and accurate financial statements for business entities, which includes service organisations |
Prepares clear and accurate financial statements for business entities, which includes service organisations |
Prepares clear financial statements for business entities, which includes service organisations |
Prepares financial statements for business entities, which includes service organisations but contains major errors |
Unable to prepare financial statements for business entities, which includes service organisation |