FNSACC414: Prepare Financial Statements for Non-reporting Entities Case Study

Assessment Overview

• Carefully read the instructions on the assessment task
• This assessment consists of two (2) case studies that will need to be submitted in Blackboard by the due date specified
• Answer all questions (to be completed in and out of class)
• Answers to be prepared within the assessment paper or Excel
• Seek review and authorisation from delegated person (lecturer) prior to submitting your solutions in Blackboard
• Note – email submissions will not be accepted

Authenticity Statement:

To ensure the authenticity of assessments, students may be contacted by lecturers to determine their knowledge development.
This may take place at any stage of the enrolment in the unit/s.
• This may be done in person, by phone, Collaborate session or Teams call.

Case Study 1

The accounting records of Lakeside Country Club reveal:

Required

For the year ending 30 June 2024, prepare:
a) Bar trading account
b) Member’s subscription account
c) Income and expenditure account
d) Balance sheet as at 30 June 2024

Case Study 2

Pilot Enterprises disclosed the following summary of transactions for the year ended 30 June 2024:

Required:

a) Prepare a cash flow statement for the year ended 30 June 2024
b) Prepare a reconciliation of cash and cash equivalents

Answer

A

Summary of Assessment Requirements

The assessment consists of two case studies, each requiring the student to apply accounting knowledge to prepare specific financial reports.

General Requirements

• Read all assessment instructions carefully.

• Complete all questions both in and out of class.

• Use the assessment paper or Excel for preparing answers.

• Submit both case studies through Blackboard by the due date.

• Seek lecturer review and authorisation before final submission.

• Email submissions are not accepted.

• Students may be contacted to verify authenticity via meeting, phone, or online session.

Case Study Requirements

Case Study 1 – Lakeside Country Club

For the year ending 30 June 2024, prepare:

1. Bar Trading Account

2. Member’s Subscription Account

3. Income and Expenditure Account

4. Balance Sheet as at 30 June 2024

Case Study 2 – Pilot Enterprises

Prepare:

1. Cash Flow Statement for the year ended 30 June 2024

2. Reconciliation of Cash and Cash Equivalents

Academic Mentor’s Step-by-Step Guidance Approach

To support the student effectively, the Academic Mentor uses a structured, progressive method that ensures understanding, accuracy, and alignment with accounting standards. The mentor focuses on both computation and the rationale behind each financial statement.

Step 1: Understanding the Assessment Context

The mentor begins by explaining:

• The nature of financial statements required

• Why non-profit clubs use trading accounts, subscription accounts, and income/expenditure accounts

• How cash flow statements differ from profit-based statements

• Importance of accurate classification and reconciliation

This ensures the student knows what each report represents and why it is prepared.

Step 2: Breaking Down Case Study 1

A. Bar Trading Account

Mentor guidance:

• Identify opening stock, purchases, direct expenses, and closing stock

• Calculate gross profit or loss

• Explain that this account isolates bar operations to assess performance

The mentor helps the student set up T-accounts and classify all bar-related transactions.

B. Member’s Subscription Account

Mentor guidance focuses on:

• Understanding income recognition for subscriptions

• Accounting for subscriptions in arrears, in advance, and received during the period

• Using a ledger format to reconcile subscription income

The student is guided to determine the correct annual subscription income to transfer to the Income and Expenditure Account.

C. Income and Expenditure Account

Mentor guidance:

• Treat this like a profit or loss account for non-profit clubs

• Include only revenue and expenses relevant to the period

• Adjust for accruals, prepayments, depreciation where applicable

The student learns to convert cash-based information into accrual-based reporting.

D. Balance Sheet

Mentor assists in:

• Classifying assets and liabilities correctly

• Deriving equity (accumulated fund)

• Ensuring the balance sheet balances

This step shows how closing balances link back to ledger accounts.

Step 3: Breaking Down Case Study 2

A. Cash Flow Statement

Mentor guidance:

• Categorise all cash movements into:

  • Operating activities

  • Investing activities

  • Financing activities

• Adjust profit for non-cash items such as depreciation

• Highlight the importance of linking cash flow to real liquidity

The mentor helps the student build the statement line by line using standard structure.

B. Reconciliation of Cash and Cash Equivalents

Mentor guidance:

• Show the differences between the bank balance and the book cash

• Account for deposits in transit, outstanding cheques, and petty cash

• Ensure the closing cash figure matches the cash flow statement

The reconciliation confirms the accuracy of the cash movement analysis.

Step 4: Review and Compliance Check

Before submission, the mentor guides the student to:

• Recheck all ledger balances

• Verify classifications and totals

• Ensure the financial statements follow consistent formats

• Confirm the documents meet assessment requirements

• Prepare the file for lecturer authorisation

This promotes accuracy and academic integrity.

Final Outcome and Learning Achievements

By following the mentor-supported process, the student produces:

• A fully prepared Bar Trading Account

• A complete Subscription Account

• A correct Income and Expenditure Account

• A balanced Balance Sheet

• A structured Cash Flow Statement

• A clear Cash and Cash Equivalents Reconciliation

Learning Objectives Achieved

The student successfully demonstrates:

1. Competence in Financial Reporting

Ability to prepare multiple financial statements for different organisational structures.

2. Understanding of Accrual Accounting

Income/expense adjustments, stock movements, and subscription recognition.

3. Ledger and Statement Preparation Skills

Preparation of T-accounts, adjustment entries, and final accounts.

4. Analytical and Classification Skills

Correct categorisation of transactions into operating, investing, and financing activities.

5. Reconciliation and Review Techniques

Ensuring accuracy and reliability of financial data.

6. Application of Theoretical Knowledge

Transforming raw data into formalised financial reports aligned with unit requirements.

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