ACCT$1130-$ Financial Accounting I $-$ Week $4$ Assignment

Total Grade Weight: $5\%$

Objective:

To assess your understanding of accounting in business and the process of analyzing and recording transactions as covered in Chapters $1$ and $2$ of our Financial Accounting course.

Task $1$: Business Scenario Analysis $(30$ points$)$

Scenario:

Imagine you are the accountant for 'Fresh Start', a new caf$$ that has just opened. In its first month of operation, Fresh Start made the following transactions:

$1.$ Invested $$50,000$ in cash to start the business.

$2.$ Purchased coffee$-$making equipment for $$15,000$; paid $$5,000$ in cash and the rest on account.

$3.$ Bought supplies worth $$2,000$ on account.

$4.$ Paid rent for the month amounting to $$1,200.$

$5.$ Earned revenues of $$10,000,$ of which $$7,000$ was in cash and the rest on account.

For each transaction, identify the accounts affected, determine the type of each account $($asset$,$ liability, equity, revenue, or expense$),$ and explain how the transaction impacts the accounting equation $($Assets $=$ Liabilities $+$ Equity$).$

Task $2$: Journal Entries $(40$ points$)$

Prepare journal entries for the transactions listed in Task $1.$ Identify the accounts involved, and properly debit and credit the appropriate amounts. Include a brief description for each transaction.

Task $3$: Transaction Analysis $(30$ points$)$

Scenario:

In the second month of operation, Fresh Start made the following transactions:

$1.$ Received $$2,000$ from customers who were billed in the previous month.

$2.$ Paid $$10,000$ of the amount owed on the coffee$-$making equipment.

$3.$ Purchased additional supplies for $$800$ in cash.

$4.$ Earned revenues of $$12,000,$ all in cash.

$5.$ Paid employees' salaries amounting to $$3,000.$

Analyze each transaction, determine which accounts are debited and credited, and calculate the new account balances. This task requires you to apply your knowledge of the double$-$entry accounting system.

Submission Guidelines:

$$ Provide your answers in a clear, organized format.

$$ Use a separate sheet for each task.

$$ Show all calculations where necessary.

$$ Submit your assignment via Canvas before the deadline.

Important Note: This assignment is to be completed individually. Collaboration or copying from others is a violation of academic integrity and will be dealt with accordingly.