BUSN9113: Accounting Fundamentals - Statement of Changes in Equity - Accounting Assessment Answer

BUSN9113: Accounting Fundamentals Assignment Answer

Task: Creative Paving and Landscaping (CPL) offers a complete, creative and fully tailored paving and landscaping design and build service to the local community in Adelaide for over 10 years. CPL has recently hired you as their casual accounts assistant. The owner’s wife, Julia Sweeney, also a part time accounting tutor at a local university, assist with overseeing the financial aspect of the business. However, she is going on maternity leave and has asked you to prepare the relevant financial statements for CPL for the financial year ending 30 June 2018. Due to concern about unsatisfactory quality of transaction recording and reporting by the previous accounts assistant, Julia reviewed and found the accounting records were incomplete and the recognition of revenues and expenses was not consistent with accrual accounting. Before the commencement of her maternity leave, Julia has rectified the errors up to the end of May 2018 and have provided you with the correct opening balances. You are given the following account balance as at May 31, 2018.

• Cash at Bank $16,800
• Accounts Receivable $6,720
• Supplies - Herbicides $2,800
• Supplies - Fuel and Oil $1,200
• Motor Vehicles $80,000
• Accumulated Depreciation – Motor Vehicle $16,000 *
• Paving Equipment - $30,800
• Accumulated Depreciation – Paving Equipment $12,320 **
• Accounts Payable $3,500
• Unearned Revenue $5,000
• Bank Loan $20,000
• Capital $20,000
• Paving Revenue $91,500
• Landscaping Revenue $61,100
• Wages Expense $62,200
• Utilities Expense $28,900

*depreciation expense for motor vehicle is $8,000 per annum

• depreciation expense for paving equipment is $6,160 per annum The following transactions occurred in the month of June. Ignore GST.

Taking Julia’s advice, you have paid attention to transaction analysis and records, in particular, the recognition of income and expenses. You want to make sure they are consistent with accrual accounting. In preparing for the analysis, you have collected additional information for the end of year adjustments (CPL uses straight line method for depreciation and it is CPL policy to account for depreciation at financial year end):

1. Wages owing to all casuals on 30 June amounted to $1,620.
2. A physical count showed that only $860 of herbicide supplies and $750 of fuel and oil supplies were still on hand.
3. Four weeks of advertisements had appeared in the local community newspaper up to 30 June.
4. Paving services of $13,500 had been rendered to one of CPL major client on the last week of June but invoice has not been issued.
5. The business had provided landscaping maintenance services to its local shopping centre client for 3 weeks of the first month (assumed to be 4 weeks long).
6. Utilities bills arrived late, totalling to $2,650, have not been paid or recorded.
7. Interest accrued on the bank loan came to $1,200.

REQUIRED:

1. Prepare journal entries to record the June 2018 transactions for Creative Paving and Landscaping. Make sure to include adjusting entries. Narrations are required.
2. Post the entries to the T accounts.
3. Prepare an adjusted trial balance.
4. Prepare the income statement, the statement of changes in equity and the balance sheet as at 30 June 2018.
5. Prepare closing entries in General Journal. Narrations are required.
6. Prepare any suitable reversing entries on 1 July 2018. Narrations are required.

It is NOT acceptable to share files, or templates with other students – this is an individual assignment and must be all your own work. Please be reminded that collusion, which is collaborating with another person on the preparation of answers for an individual assignment, is a breach of academic integrity.

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