ACCT1008 - Accounting for Business - SP2 2016
Assignment Part B
70 marks - Weighting 15%
Due 8:00pm Adelaide time (ACST) on Tuesday 24th May 2016
Please aim to complete the assignment a few days before the due date to allow for any unforeseen circumstances such as illness, family issues, work commitments etc. You may submit the assignment early if you have other commitments around the due date.
The due date and time is stated in the course outline, on the course website and above. Please note it is your responsibility to ensure you factor in any time difference between Adelaide (South Australia) and your location when submitting your assignment.
Please note that following important instructions relating to the assignment format and submission:
1. You must complete your assignment using this assignment Word document.
2. Do not convert this document into any other format (.docx or .doc are the only permissible file formats than can be uploaded).
3. You can only submit this one file.
4. Do not ‘embed’ other files (Excel for example) as pictures within the assignment Word document.
5. You cannot scan hand written responses and submit. All assignments must be typed.
6. Remember to complete the assignment coversheet which is provided on the second page of this assignment Word document.
7. All assignments must be lodged via the unit Learnonline page (see link on course web site).
8. Assignments submitted via e-mail (or any other method) will NOT be accepted.
9. Make sure that you upload the correct file. If you discover (after the due date) that you have uploaded a draft version or the wrong file completely, you will not be allowed to submit a second file.
IMPORTANT - Failure to follow these instructions may result in your assignment not being marked, and you will receive a zero grade.
Please note that this is an individual piece of assessment. Pay particular attention to the student declaration which forms part of the cover sheet. You must type your name and the date in the appropriate field in this declaration.
Best of luck with your assignment.

UNIVERSITY OF SOUTH AUSTRALIA
Assignment Cover Sheet
________________________________________
An Assignment cover sheet needs to be included with each assignment. Please complete all details clearly.
When submitting the assignment online, please ensure this cover sheet is included at the start of your document. (Not as a separate attachment.)
Please check your Course Outline or contact your School Office for assignment submission locations.
Name:
Student ID
Email:
Course code and title: ACCT 1008 - Accounting For Business
School: Commerce Program Code:
Course Coordinator: Phil Johnson Tutor:
Day, Time, Location of Tutorial/Practical:
Assignment number: Assignment Part B Due date: 8pm (ACST) 24th May 2016
Assignment topic as stated in Course Outline:
Assignment Part B
Further Information: (e.g. state if extension was granted and attach evidence of approval, Revised Submission Date)

I declare that the work contained in this assignment is my own, except where acknowledgement of sources is made.
I authorise the University to test any work submitted by me, using text comparison software, for instances of plagiarism. I understand this will involve the University or its contractor copying my work and storing it on a database to be used in future to test work submitted by others.
I understand that I can obtain further information on this matter at http://www.unisanet.unisa.edu.au/learningconnection/student/studying/integrity.asp

Note: The attachment of this statement on any electronically submitted assignments will be deemed to have the same authority as a signed statement.
Signed: Date:
Signed: Date:
Date received from student
Assessment/grade Assessed by:
Recorded: Dispatched (if applicable):

QUESTION 2: Balance Day Adjustments (25 marks)
This is not a typo. Q1 was included in Part A of the assignment, which now continues in Q2.
Below is the unadjusted Trial Balance for Toms Tennis Courts & Supplies as at 30th June 2015.
NOTE: Please use this trial balance to complete the question, NOT the trial balance you completed in Part A of the assignment.
TOM’S TENNIS COURTS AND SUPPLIES
UNADJUSTED TRIAL BALANCE
AS AT 30 June 2015
Debit ($) Credit ($)
Cash at Bank 35 688
Accounts Receivable 42 528
Inventory 187 200
Prepaid Insurance 6 552
Office Supplies on hand 4 368
Furniture & Fittings 53 040
Accumulated Depreciation – Furniture & Fittings 15 912
Delivery Equipment 62 400
Accumulated Depreciation – Delivery Equipment 24 960
Accounts Payable 36 036
Loan Payable 156 000
Tom’s TC&S – Capital 88 296
Tom’s TC&S – Drawings 37 440
Sales Revenue 921 400
Sales Returns and Allowances 13 232
Cost of Sales 549 744
Discount received 17 276
Freight inwards 12 480
Sales Salary Expense 91 104
Delivery Expense 24 336
Advertising Expense 35 880
Rent Expense 38 064
Office Salaries Expense 45 000
Electricity Expense 11 776
Discount Allowed 9 048
Totals 1 259 880 1 259 880
On the following page is information that Tom has provided to you related to the year ended 30 June 2015.

(1) Office Salaries which are payable but not recorded as at 30th June are $1 570.
(2) Both the Furniture & Fittings and the Delivery Equipment 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 8 years 0
Delivery Equipment 6 years $4 200
(4) In order to allow for cash flow fluctuations, the bank has approved a $12,000 overdraft facility for Tom’s business bank account.
(5) A count of the stationery room revealed that Office Supplies on hand at 30th June 2015 were $3 724.
(6) The balance in the Prepaid Insurance account represents a 12 month insurance policy that commenced on 1st February 2015.
(7) $5 400 of the recorded Sales Revenue is for specially imported tennis nets which will not be delivered until 24th July 2015.
(8) As of 30th June 2015, Tom has estimated that 5% of his Accounts Receivable will not be collected.
REQUIRED:
As it is now the end of the financial year, you are required to undertake the following work for Tom:
a. Prepare any necessary Balance Day Adjustment Journals for Tom’s Tennis Courts and Supplies. Include a brief narration (explanation) for each journal entry. (11 marks)
b. Post the journals from (a) above to the General Ledgers provided. (7 marks)
c. Complete the Adjusted Trial Balance provided for the account balances calculated in the General Ledgers from (b) above. (7 marks)

a. Prepare any necessary Balance Day Adjustment Journals for Tom’s Tennis Courts and Supplies. Include a brief narration (explanation) for each journal entry.
Date Details Debit ($) Credit ($)


b. Complete and post the journals from (a) above to the General Ledgers provided below. All ledgers must be footed.
Allowance for Doubtful Debts
Prepaid Insurance
Office Supplies on Hand

Accumulated Depreciation – Furniture and Fittings

Accumulated Depreciation – Delivery Equipment

Unearned Sales

Office Salaries Payable

Sales


Office Salaries Expense

Depreciation – Furniture and Fittings

Depreciation – Delivery Equipment

Office Supplies Expense

Insurance Expense

Doubtful Debts Expense


c. Complete the Adjusted Trial Balance provided below. You may need to insert additional accounts that are not currently listed.
TOM’S TENNIS COURTS AND SUPPLIES
ADJUSTED TRIAL BALANCE
AS AT 30 JUNE 2015
Debit ($) Credit ($)
Cash at Bank 35 688
Accounts Receivable 42 528
Inventory 187 200
Prepaid Insurance
Office Supplies on hand
Furniture & Fittings 53 040
Accumulated Depreciation – Furniture & Fittings
Delivery Equipment 62 400
Accumulated Depreciation – Delivery Equipment
Accounts Payable 36 036
Loan Payable (long term) 156 000
Tom’s TC&S – Capital 88 296
Tom’s TC&S – Drawings 37 440
Sales Revenue
Sales Returns and Allowances 13 232
Cost of Sales 549 744
Discount received 17 276
Freight inwards 12 480
Sales Salary Expense 91 104
Delivery Expense 24 336
Advertising Expense 35 880
Rent Expense 38 064
Office Salaries Expense
Electricity Expense 11 776
Discount Allowed 9 048
Totals

QUESTION 3: Financial Statement (18 marks)
The following Trial Balance for Negan’s Bat Emporium has been prepared at year end by Negan, but he realises it is not in the correct order.
REQUIRED:
Using the Trial Balance provided below, prepare the following for the period in question:
1. Fully classified Balance Sheet
2. Statement of Changes in Equity
Negan’s Bat Emporium
TRIAL BALANCE AS AT 30 JUNE 2015
Debit ($) Credit ($)
Shop Furniture & Fittings 25 000
Accounts Receivable 46 089
Accumulated Depreciation – Shop Furniture & Fittings 9 020
Rent Expense – Admin 3 650
Cash at Bank 49 053
Advertising Payable 4526
Sales 547 310
Electricity Expense 1 568
COGS 386 210
Negan, Capital 44 810
Depreciation Expense – Shop Furniture & Fittings 3 550
Freight Inwards 2 820
Rent Expense – Store 25 650
Accounts Payable 16 018
Discount Allowed 3 725
Inventory 20 960
Salaries Expense - Store 33 400
Loan Payable 33 600
Allowance for Doubtful Debts 1 000
Prepaid Advertising 1 540
Interest Payable 620
Advertising Expense 560
Sales Equipment 14 400
Interest Expense 470
Doubtful Debts Expense 1 000
Negan, Drawings 18 500
Sales Returns & Allowances 8 630
Discount Received 3 171
Salaries Expense - Admin 13 300
Totals 660 075 660 075
• The loan is payable in equal amounts over 48 months
Answer on following pages


QUESTION 4: Accounting Concepts (10 marks)
You are employed as a graduate accountant in a mid-tier accounting firm. One of the partners has asked you to review the following cases where a client has violated at least one of the assumptions, concepts or definitions you studied at university. The partner has asked for a written report in your own words (using references where appropriate), to please explain:
a) which concept or assumption has been violated, and;
b) what the correct treatment should be.
i. The proprietor of the Big Deal Theatre Company insists that the most valuable assets of her business are the cast of talented actors who are contracted to perform in the companies productions. “Without such superb acting talent our productions would be seriously devalued” she says. She has produced a draft Balance Sheet which details the various contracted actors as assets of the company. [5 marks]
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ii. Jayne, an owner of a children’s party business bought a laptop for her own personal use using the business’s cheque account. She recorded this as a debit to Computers and credit to Cash at Bank in the business’s books. [5 marks]
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QUESTION 5: Cash Flow Statement (17 marks)
Below are the summarised cash flow statements for two shoe shops. Comment in your own words using referencing where appropriate on which one has a healthier cash flow situation and justify your answer by explaining the significance of each of the three types of cash flows for each business:
Koles Woolies
Cash flow from Operating Activities (10 000) 12 000
Cash flow from Investing Activities 16 000 (6 000)
Cash flow from Financing Activities (4 000) (7 000)
Net increase / (decrease) in cash held 2 000 (1 000)
Cash at the beginning of the year 4 000 7 000
Cash at the end of the year 6 000 6 000
[Approximately 400 words expected in your answer]
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Developing knowledge and skills in the assignment
During the study period, you have been developing:
• technical and theoretical knowledge and the ability to integrate that knowledge,
• judgement, and
• application skills.
Your studies of accrual accounting is a good example of the knowledge and skills you are developing. You are developing technical knowledge of accrual accounting, theoretical knowledge of related accounting concepts and you integrate both areas of knowledge. You also exercise judgement, and critically apply your knowledge and skills when determining if adjusting entries are necessary.
This is an example of the learning outcomes of Bachelor accounting and business programs. Learning outcomes are what graduates are expected to know, understand and be able to do as a result of learning. Importantly, business and the professions were consulted during the design of the learning outcomes. Thus, they give us vital insights into the knowledge and skills that business and the professions want graduates to possess.
This assignment is designed to further develop these learning outcomes:
• Knowledge, and the ability to integrate theoretical and technical accounting knowledge, which is highly valued by the employers of graduates.
• Employers also highly value graduates’ ability to:
o exercise judgement under supervision to solve routine accounting problems, and
o critically apply theoretical and technical knowledge and skills to solve routine accounting problems.
Keep these learning outcomes in mind as you work on the assignment.
Communication skills. The assignment is also designed to develop your communication skills. While the ability to justify and communicate accounting advice and ideas is a learning outcome of graduates of Bachelor accounting programs, communication skills are equally valuable in all Bachelor business programs. Communication skills consistently rank as the most important skill that employers consider when they employ graduates.
The following three aspects of your written communication skills development will be assessed in this assignment to a maximum of 15 marks:
• Paraphrasing,
• Being relevant and the art of selection, and
• An introduction to writing for a professional business audience.
Please refer to the resource Developing written communication skills in Accounting for Business on the course learnonline page. It has information about the three aspects of your written communication skills development and links to accompanying resources that will assist you develop your skills. As you use the resources in your assignment, remember that the finest communicators are constantly developing their skills, based on experience and observing other communicators. Nonetheless, your studies is the perfect time to start working on these skills and appreciating their importance in business careers and the professions.
Sources: Graduate Careers Australia, Hancock, P., Freeman, M. and Associates. (2010).