ACCT1008 - Accounting for Business - SP2 2017
Assignment Part B
70 marks - Weighting 15%
Due 5:00pm Adelaide time (ACST) on Friday 25th August 2017
Please try 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.
INSTRUCTIONS
1. You must complete your assignment using this assignment Word document.
2. Do not change 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. Complete the assignment coversheet 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 assessment. Pay 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: Tutor:
Day, Time, Location of Tutorial/Practical:
Assignment number: Due date:
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 Auldana Custom Concrete Foundations as at 30th June 2016.
NOTE: Please use this trial balance to complete the question ( NOT the trial balance you completed in Part A of the assignment).
AULDANA CUSTOM CONCRETE FOUNDATIONS
UNADJUSTED TRIAL BALANCE
AS AT 30 June 2016
Debit ($) Credit ($)
Cash at Bank 14 037
Accounts Receivable 47 046
Inventory 140 400
Prepaid Insurance 4 914
Office Supplies on hand 3 276
Furniture & Fittings 21 030
Accumulated Depreciation – Furniture & Fittings 11 934
Equipment 69 200
Accumulated Depreciation – Equipment 18 720
Accounts Payable 27 027
Loan Payable 120 275
Paul’s ACCF – Capital 54 972
Paul’s ACCF – Drawings 29 280
Sales Revenue 706 800
Sales Returns and Allowances 9 924
Cost of Sales 412 308
Discount received 12 957
Freight inwards 9 360
Sales Salary Expense 68 328
Delivery Expense 18 252
Advertising Expense 28 590
Rent Expense 28 548
Office Salaries Expense 33 750
Electricity Expense 7 656
Discount Allowed 6 786
Totals 952 685 952 685
On the next page is Paul’s information related to the year that ended 30 June 2016.

(1) A count of the stationery room showed that Office Supplies on hand at 30th June 2016 were $2 793.
(2) Both the Furniture & Fittings and the Equipment will 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 $1030
Equipment 10 years $0
(3) In order to allow for cash flow fluctuations, the bank has approved a $15,000 overdraft facility for Paul’s business bank account.
(4) Office Salaries which are payable but not recorded as at 30th June are $1 125.
(5) The balance in the Prepaid Insurance account represents a 12 month insurance policy that commenced on 1st March 2016.
(6) $6 500 of the recorded Sales Revenue is for deposits made for foundations which will not be installed until July/August 2016.
(7) As of 30th June 2016, Paul has estimated that 3% of his Accounts Receivable will not be collected.
REQUIRED:
As it is now the end of the financial year, you have to undertake the following work for Paul:
a. Prepare any necessary Balance Day Adjustment Journals for ACCF. 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 ACCF. 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.
AULDANA CUSTOM CONCRETE FOUNDATIONS
ADJUSTED TRIAL BALANCE
AS AT 30 JUNE 2016
Debit ($) Credit ($)
Cash at Bank 14 037
Accounts Receivable 47 046
Inventory 140 400
Prepaid Insurance
Office Supplies on hand
Furniture & Fittings 21 030
Accumulated Depreciation – Furniture & Fittings
Delivery Equipment 69 200
Accumulated Depreciation – Delivery Equipment
Accounts Payable 27 027
Loan Payable (long term) 120 275
Paul’s ACCF – Capital 54 972
Paul’s ACCF – Drawings 29 280
Sales Revenue
Sales Returns and Allowances 9 924
Cost of Sales 412 308
Discount received 12 957
Freight inwards 9 360
Sales Salary Expense 68 328
Delivery Expense 18 252
Advertising Expense 28 590
Rent Expense 28 548
Office Salaries Expense
Electricity Expense 7 656
Discount Allowed 6 786
Totals

QUESTION 3: Financial Statement (18 marks)
The following Trial Balance for Paul’s Recycled Books has been prepared at year end by Paul, 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
Paul’s Recycled Books
TRIAL BALANCE AS AT 30 JUNE 2016
Debit ($) Credit ($)
Shop Furniture & Fittings 24 375
Accounts Receivable 45 066
Accumulated Depreciation – Shop Furniture & Fittings 8 395
Rent Expense – Admin 3 650
Cash at Bank 47 753
Advertising Payable 3 901
Sales 545 385
Electricity Expense 1 443
COGS 386 210
Negan, Capital 43 810
Depreciation Expense – Shop Furniture & Fittings 3 550
Freight Inwards 2 945
Rent Expense – Store 25 225
Accounts Payable 14 995
Discount Allowed 3 580
Inventory 20 335
Salaries Expense - Store 33 400
Loan Payable 32 400
Allowance for Doubtful Debts 1 000
Prepaid Advertising 1 470
Interest Payable 550
Advertising Expense 635
Sales Equipment 14 500
Interest Expense 395
Doubtful Debts Expense 1 000
Paul, Drawings 17 600
Sales Returns & Allowances 6 705
Discount Received 3 026
Salaries Expense - Admin 13 725
Totals 653 562 653 562
• The loan is payable in equal amounts over 36 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 owner of a farming property argued that the value of a public road running past his land should be included among the farm’s assets. He felt this was right because the road made it quicker and easier for him to transport his products. “This means that the road is an asset to the farm,” he said.
[5 marks]
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ii. Jayne, an owner of a children’s party business took party supplies home for her own personal use. She recorded this as a debit to Supplies Expense and credit to Supplies 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 businesses. 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:
Cheap as Smith’s Sniggles
Cash flow from Operating Activities (12 500) 11 800
Cash flow from Investing Activities 18 500 (6 200)
Cash flow from Financing Activities (3 500) (6 800)
Net increase / (decrease) in cash held 2 500 (1 200)
Cash at the beginning of the year 3 900 7 300
Cash at the end of the year 6 400 6 100
[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 website. 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).