Assignment 1:

To complete a writing task, you needed a pencil and an eraser. You had a pencil only (Event 1); and you borrowed an eraser from your friend (Event 2). The following picture shows bookkeeping for the first 2 events.

The subsequent events are:

Event 3: However, your pencil did not work.

Event 4: Then you returned the eraser to your friend.

Event 5: Then you borrowed a new pencil and a new eraser from another friend.

Event 6: You completed the writing task, but you used half pencil for this task.

Event 7: You were granted a new pencil as a reward for completing the task.

Required:

(1)Perform bookkeeping practices for Events 1 to 7. You need to use the simplified T-account method to perform this. You need to indicate the amount in "normal balance" for each account. (7 marks)

(2)Discuss. At the stage of Event 4, there was no physical resource in the "entity" for writing task [i.e., no pencil, no eraser that time]. Does the "entity" still exist? Why? (5 marks).

Assignment 2

To establish a noodle shop, Mark invested $500 (event 1) and borrowed $500 from his friend (event 2). Mark needed to pay an interest of $10 to his friend each week (event 3).

Mark spent $200 on the cookery equipment (event 4), which would be used for 20 weeks (event 5) - after that, the equipment would have no value.

In the first week, Mark's sale in cash was $200 (event 6). But one transaction was not recorded in the cash sale. A customer this week forgot to bring cash and would definitely pay $20 in cash next week (event 7). The expenses that occurred during this week included $50 spent on raw materials (event 8) and $50 for the shop rent (event 9).

Required

(1)Use the simplified T-accounts to present these business activities or events on Week 1. (8 marks)

(tips: accounts may include asset-cash, asset-equipment, asset-"account receivables" liability-borrowings, equity-"introduced capital", equity-profit)

(2)Prepare the balance sheet on this week. (5 marks)