ACCT 1008-Accounting for Business - Accounting & Finance Assignment Help

Assignment Task

Task 

QUESTION 1: Balance Day Adjustments 
Below is the unadjusted Trial Balance as at 30 June 2021 for “The Great Outdoors”, a retail business specialising in camping and outdoor equipment. It is owned and operated by Anna Conder. Anna is the sole proprietor and does a lot of the business bookkeeping during the year, however she sends information through to Crase & Stone Accounting Services at the end of the financial year for the necessary balance day adjustments to be completed.

REQUIRED:

You are a Graduate Accountant at Crase & Stone Accounting Services.  It is now the end of the financial year and based on the information she has provided below by Anna, you have been asked you to prepare any necessary balance day adjusting journals.  

Use the General Journal document provided to record the correctly formatted journal entries required and include a narration (explanation) for each entry.                                                                            

1. Office Salaries which are payable but have not yet been recorded as at 30 June 2021 are $7,850.

2. Anna conducted a count of her stationery room on 30 June 2021.  This count revealed that office supplies still on hand at that time were $7,500.

3. Both the Furniture & Fittings and the Delivery Vans 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
Delivery Vans              8 years      $80,000

4.During the year, Anna also purchased a new computer and printer package for the office.  The package cost $7,824 and was purchased on 1 February 2021.  Anna has estimated that the package will have a useful life of 4 years, after which she expects to be able to sell it for $1,200

5.On 30 June 2021, Anna reviewed her outstanding Accounts Receivable balance.  Based on her previous experience, she has estimated that 3% of this balance is unlikely to be collected.

6.A custom made, specially imported “Glamping” tent costing $13,720 was ordered and paid for by a customer on 25 June 2021. At the time of the sale, Anna recorded this amount as Sales Revenue.  Anna has confirmed with the manufacturer that the tent will not be delivered and available for the customer until at least 25 August 2021.

7.On 1 November 2020, Anna took out a 2-year insurance policy for her inventory, contents and vehicles and cost $32,760.  This policy was paid for from the business bank account on the same day and was recorded as Prepaid Insurance.

8.Anna’s last telephone bill for the business was for the month ending 31 May 2021, 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 2021 was $1,500.

QUESTION 2: Financial Statement 
In your role as a Graduate Accountant at Crase & Stone Accounting Services you have been supplied with the following adjusted Trial Balance for Lounge Around Furniture Market, prepared at the end of the financial year by the business owner, Chaz Lounge.

REQUIRED:
Using the Trial Balance provided below, prepare the following for the period in question:
a) Fully classified Income Statement                
b) Statement of Changes in Equity                     
c) Fully classified Balance Sheet (Narrative format)        
  

QUESTION 3: Accounting Concepts 

As part of your continuing professional development as a graduate accountant at Crase & Stone Accounting Services, the Managing Partner (Lin Stone) has asked you to assist a new client, Emily Watson, who works as a registered financial planner.  
Lin Stone has met with Emily, and he advises you that she is quite skeptical about coming to see an accountant.  Emily was referred to Crase & Stone Accounting Services by her friend Chaz Lounge, however she doesn’t understand the concept of accrual accounting, and believes that adjusting her accounts will just delay their preparation and are so small that they make no difference and are a waste of time.  She also doesn’t understand why money she withdraws from her own business is not treated as an expense.

Emily has provided the following Income Statement (prepared using cash accounting) and additional information related to the transactions she has recorded.

Watson Financial Planning Services Income Statement For the year ended 30 June 2021
Income:Fees revenue    $285,000
Less:  Expenses            $228,000
Profit                              $57,000

• Fees for financial planning advice provided in the year ended 30 June 2020 for $6,000 were collected in the current year and have been included in   the revenue above.
• Fees for financial planning advice provided in the year ended 30 June 2021 of $9,000 are expected to be collected in the following year. These have   not been included in the revenue above.
• Accrued salaries at 30 June 2020 were $3,000. These were paid in July 2020 and have been included in the expenses above.
• Accrued salaries at 30 June 2021 were $3,500. These were paid in July 2021 and have not been included in the expenses above.
• Depreciation expense of $13,500 has not been included in the expenses above.
• Emily Watson withdrew $2,400 per month to cover her personal living expenses, and these have been included in the expenses above.

The Managing Partner (Lin Stone) has requested that you do the following:
a) Using the above information, prepare an Income Statement using accrual accounting, and show all relevant calculations.       
b) Explain why the revised statement is considered to be a better measure of profit.    
c) Explain why it is correct accounting procedure to exclude drawings from expenses.   

Lin 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 Emily. 

QUESTION 4:Closing Entries 

Annie Bacterial is the sole proprietor of Shiny Bright Cleaners.  Annie is good friends with Anna Conder, Chaz Lounge and Emily Watson.  Shiny Bright Cleaners is contracted by The Great Outdoors, Lounge Around Furniture Market and Watson Financial Planning Services to clean the premises of each business. 
One evening when they all were all out to dinner, Annie was explaining that she had no idea how to close off the accounts.  Her friends suggested she contact Crase & Stone Accounting Services again and ask for you as they have all been very happy with the work you have done for them.  

REQUIRED

The Managing Partner has requested that you assist Annie by preparing the following:

a) Closing entries based on the Trial Balance provided above, and 
b) A post-closing Trial Balance for the year ended 30 June 2021.
c) General Journal – closing entries

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