Accounting

| September 28, 2018

Objectives

This
assessment item relates to the course learning outcomes 1 – 3 as stated on Page
1.

Details

This
assignment can (and should be) worked on each week commencing in Week 1, and
submitted when all questions have been completed. Penalties will apply for late
submission of assignments.

Answer
all questions.

Copies
of the format for General Journal, General Ledger (T-Format and 3 column
format) and Financial Statements will be available on Moodle. These should be
used to record the answers for the assignment.

Do
not use a computerised accounting program for this assignment.

This
is an individual assignment.

Question 1
17 Marks

Secure Storage Services was formed on 1st May 2014. The
following transaction took place during first month.
Transactions on 1st May
1.
Paul Taylor
invested $ 60,000 cash in business , as its sole owner.
2.
Hired two
employees to work in the warehouse. They will each be paid a salary of $1000
per month.
3.
Signed a two
years rental agreement on the warehouse; paid $18,000 cash in advance for the
first year.
4.
Purchase
furniture and Equipment costing $35,000. A cash payment of $10,000 was made
immediately; the remainder will be paid in six months.
5.
Paid $1,500 cash
for a 1 year insurance policy on the furniture and equipment.
6.
Purchase basic
supplies for $500 cash
7.
Purchase more
office supplies for $1,500 on account.
8.
Total revenue
earned was 15,000 – $5000 cash and @10,000 on account.
9.
Paid $400 to
supplier for account payable due.
10.
Received $2,500
from customer in payment of accounts receivable.
11.
Received utility
bills in the account of $200 to be paid next month.
12.
Paid monthly
salaries of the two employees, totalling $2,000

Required:

a)
Prepare journal
entries to record each of the events listed. (3 Marks)
b)
Open T account and Post the journal entries in
T accounts. (11 Marks)
c)
Prepare trial
balance as at 31st May 2014. (3 Marks)

Question 2 10
Marks

You are employed to investigate whether any accrual entries are needed in
the business of Unique Security Services. On completion of your investigation
on 30 June, you have discovered that the following items need attention:

Employee
salaries owed but not recorded $19,200.00.
Prepaid
insurance expired, $1900.00.
Interest
revenue accrued but not recorded $10,000.00.
Unearned
security services revenue now earned $14,600.00.
Depreciation
not recorded $16,000.00.
Used
supplies of $1,800.00.
Nine
months of rent $1,350.00 were paid in advance 1 April.
Accrued
advertising expenses, $900.00.

Required:

a)
Prepare the adjusting entries for the items 1 to 8 at 30 June, the end
of the accounting period. (8 marks)
b) Suppose the
adjusting entries in requirement (a) were not made. Calculate
the total overstatement or understatement
of profit as a result of the omission
of these
adjustments. (2
marks)

QUESTION 3 23 Marks

On 30 June 2014, the ledger of Jackson
Brown, roofing supplies, contained the accounts and account balances shown
below:

ACCOUNT

DEBIT

CREDIT

Cask at bank

$ 5000

Accounts Receivable

3,600

Roofing supplies

2,280

Equipment

12,000

Accumulated Depreciation – Building

2,400

Accounts Payable

2,800

Unearned Revenue

600

Mr, Brown Capital

14,000

Mr, Brown Drawings

1,200

Service Revenue

6,000

Salaries Expense

1,400

Miscellaneous Expenses

400

TOTAL

$25,800

$25,800

The following information has not yet been
recorded:

A physical count reveals only
$280 of roofing supplies on hand .
Depreciation on the equipment
is $400.00.
Unearned Revenue amounted to
$260 after adjustment at the yearend balance
Accrued salaries are $700.

REQUIRED:
a)
Prepare a 10-colum worksheet for the year
ended 30 June 2014. (11
marks)
b)
Prepare an income statement, a statement of
changes in equity and a balance sheet. (5 marks)
c)
Journalise the closing entries.
(7marks)

Assessment criteria

The marking criteria sheet at
the end of the assignment indicates the allocation of marks for the assignment.
Please submit an electronic copy of this marking criteria sheet including
your name and your student ID when submitting your assignment.
Note: there is a 5% penalty
per day for late submission

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