Could you please help answering the questions in the Accounting assignment?

Need answers for questions 1,2 and 4.

Thank you

ACG11 - Accounting for Business - SP2 2016 Assignment Part B 97 marks - Weighting 15% Due 8:00pm Adelaide time (ACST) on Tuesday 9th August 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. 2. You must complete your assignment using this assignment Word document. 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. 1 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 skills, and application skills. This is an example of the knowledge and skills which are 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 your knowledge and skills. Theoretical and technical knowledge, and the skill to integrate these interrelated areas of knowledge, is highly valued by the employers of graduates. Employers of graduates also value: o the skill to be able to exercise judgement under supervision to solve routine accounting problems, and o the ability to critically apply theoretical and technical knowledge and skills to solve routine accounting problems. Please keep these learning outcomes in mind as you work on the assignment and remember that this knowledge and skills are important to employers. Communication skills. The assignment (Part A and Part B) is also designed to develop your communication skills. The importance of communication skills in the professions and careers in business cannot be underestimated. 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. Indeed, communication skills consistently rank as the most or one of the most important skills that employers consider when they employ graduates. We focus on three aspects of your written communication skills development in Parts A and B of the assignment: Paraphrasing, Being relevant and the art of selection, and An introduction to writing for a professional business audience. Please refer to the resource 'Written Communication Skills in AFB' 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 and apply them 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: Hancock, P., Freeman, M. and Associates. (2010), Graduate Careers Australia (graduatecareers.com.au) and Achievement Matters (achievementmatters.com.au). 2 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: Unit code and title: Assignment number: Assignment Part B Due date: Assignment topic as stated in Unit 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 received Recorded: Date: Assessment/grade Assessed by: Dispatched (if applicable): 3 QUESTION 1: Balance Day Adjustments (40 marks) Below is the unadjusted Trial Balance for Blue Herrings Fishing Gear as at 30 th June 2016. IMPORTANT: You must use the trial balance provided below to complete this question. Do NOT use the trial balance you completed in Part A of the assignment. Blue Herrings Fishing Gear Trial Balance as at 30th June 2016 Debit 56,433 68,398 58,950 225 45,000 95,625 Cash at Bank Accounts Receivable Inventory (1 July 2015) Prepaid Insurance Motor Vehicle Shop Shelving Accumulated Depreciation - Shop Shelving Display Cabinets Accumulated Depreciation - Display Cabinets Accounts Payable Rent Payable Loan S. Sole, Capital (1 July 2015) S. Sole, Drawings Sales Sales Returns & Allowances Interest expense Discount Received Purchases Freight Inwards Expense Insurance Expense Advertising Expense Office Operating Expense Rent Expense Wages Expense Delivery Expense Discount Allowed Totals Credit 27,000 78,000 7,100 17,550 2,250 57,850 280,375 40,500 766,923 1,060 4,600 2,250 261,000 5,550 1,350 19,300 96,750 29,250 295,875 2,132 1,300 1,161,298 1,161,298 On the following page is information that Sam has provided to you related to the year ended 30 June 2016. 4 1. $300 of the Advertising expense relates to a radio campaign that will run in August 2016. 2. The Motor Vehicles, Shop Shelving and Display Cabinets are expected to be used evenly over their useful lives. The expected total useful lives and residual values of these assets are listed below: Motor Vehicles Shop Shelving Display Cabinets (see note below) Estimated Useful life 5 years 10 years 12 years Estimated Residual $5,000 $5,625 0 Sam has spoken with his accountant, Jen Ledger, about the required entries and the issue of materiality. As a result, it has been decided that due to its relatively small impact, Sam will start depreciating the new $42,000 Display Cabinets (purchased in June 2016) from the 1st July 2016. 3. A count of the stationery room revealed that Office Supplies on hand at 30 th June 2016 were $2,623. This had been originally debited to Office Operating Expenses. 4. The balance in the Prepaid Insurance account represents coverage for June 2016. 5. $16,000 of the recorded Sales is for specially imported Marlin fishing rods which will not be delivered until 24th July 2016. 6. As of 30th June 2016, Tom has estimated that 5% of his Accounts Receivable will not be collected (round any required adjustment to the nearest whole dollar). 7. Wages earned by employees, but unpaid as at 30 th June 2016 total $5,120. REQUIRED: As it is now the end of the financial year, you are required to undertake the following work for Sam: (a) Prepare any necessary Balance Day Adjustment Journals for Blue Herrings Fishing Gear. Ensure that each journal entry is correctly formatted and include a brief narration (explanation) for each journal entry. (14 marks) (b) Update the General Ledgers provided and post the journals from (a) above. All ledgers must be correctly formatted and footed (balanced). (17 marks) (c) Complete the Adjusted Trial Balance provided. You will need to insert additional accounts that are not currently listed. (9 marks) 5 (a) Date Prepare any necessary Balance Day Adjustment Journals for Blue Herrings Fishing Gear. Ensure that each journal entry is correctly format and include a brief narration (explanation) for each journal entry. Details Debit ($) 6 Credit ($) (b) Update the General Ledgers provided and post the journals from (a) above. All ledgers must be correctly formatted and footed (balanced). Allowance for Doubtful Debts Prepaid Advertising Prepaid Insurance Office Supplies on Hand Accumulated Depreciation - Motor Vehicles Accumulated Depreciation - Shop Shelving Accumulated Depreciation - Display Cabinets 7 Unearned Sales Wages Payable Sales Wages Expense Depreciation Expense - Motor Vehicles Depreciation Expense - Shop Shelving Depreciation Expense - Display Cabinets 8 Office Operating Expense Insurance Expense Advertising Expense Doubtful Debts Expense 9 (c) Complete the Adjusted Trial Balance provided below. You will need to insert any additional accounts as required. BLUE HERRINGS FISHING GEAR UNADJUSTED TRIAL BALANCE AS AT 30 June 2016 Debit ($) 56,433 68,398 58,950 Cash at Bank Accounts Receivable Inventory (1 July 2015) Prepaid Insurance Motor Vehicle Shop Shelving Accumulated Depreciation - Shop Shelving Display Cabinets Accumulated Depreciation - Display Cabinets Accounts Payable Rent Payable Loan S. Sole, Capital (1 July 2015) S. Sole, Drawings Sales Sales Returns & Allowances Interest expense Discount Received Purchases Freight Inwards Expense Insurance Expense Advertising Expense Office Operating Expense Rent Expense Wages Expense Delivery Expense Discount Allowed Credit ($) 45,000 95,625 78,000 17,550 2,250 57,850 280,375 40,500 1,060 4,600 2,250 261,000 5,550 29,250 2,132 1,300 Totals 10 QUESTION 2: Financial Statement (22 marks) The following Trial Balance for Pikachu's Safety Apparel has been prepared at year end by Pikachu, but he realises it is not in the correct order. REQUIRED: Using the Trial Balance provided below, prepare the following for the period in question: 1. Fully classified Income Statement [18.5 marks] 2. Statement of Changes in Equity [3.5 marks] Pikachu's Safety Apparel TRIAL BALANCE AS AT 30 JUNE 2015 Debit ($) Shop Furniture & Fittings 25 000 Accounts Receivable 46 089 Accumulated Depreciation - Shop Furniture & Fittings Cash at Bank 49 053 Advertising Payable Sales Electricity Expense 1 600 COS 386 210 Pikachu, Capital Depreciation Expense - Shop Furniture & Fittings 3 550 Freight Inwards 2 820 Rent Expense 29 300 Accounts Payable Discount Allowed 3 725 Inventory 20 960 Salaries Expense - Store 33 400 Loan Payable Allowance for Doubtful Debts Prepaid Advertising 1 540 Interest Payable Advertising Expense 560 Sales Equipment 14 400 Interest Expense 470 Doubtful Debts Expense 1 000 Pikachu, Drawings 18 500 Sales Returns & Allowances 8 630 Discount Received Salaries Expense - Admin 13 300 Totals 660 107 Credit ($) 9 020 4526 547 310 44 810 16 018 33 600 1 000 620 3 203 660 107 Additional information Pikachu has determined that 30% of the electricity expense and $8,650 of the rent expense specifically relate to the administration office. The remainder of both these expenses relate to running the store. Answer on following pages 11 12 QUESTION 3: 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. Carmel's business has $35,000 of outstanding debtors on its books, and she is quite certain that $4,000 of this debt will prove impossible to collect. Carmel has instructed the accountant at your firm to make no adjustments to the ledger and the reports since \"they're still our debts and therefore still assets of this business.\" [5 marks] __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ ii. Matthew, the proprietor of a retail bookshop has taken four books from the business to give to friends as birthday presents. He recorded this as an expense in the bookshops accounting records. [5 marks] __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ 13 QUESTION 4: Cash Flow Statement 16 marks) You are provided with the following financial information for Goldstar Holdings Ltd: GOLDSTAR HOLDINGS LTD COMPARATIVE BALANCE SHEETS AS AT JUNE 30th 2016 2015 Current Assets Cash on Hand $5 000 $4 000 Cash at Bank 1 400 - Accounts Receivable (net) * 4 800 4 950 18 500 20 100 Inventory Prepaid Expenses 1 480 $31 180 890 $29 940 Non Current Assets Plant & Equipment less Acc. Depreciation 72 000 (25 700) Total Assets 72 000 46 300 (19 700) 77 480 52 300 82 240 Current Liabilities Bank Overdraft - 2 400 Accounts Payable 3 800 4 250 Accrued Expenses 920 850 Tax Payable 980 5 700 1 340 8 840 Non Current Liabilities Mortgage 18 000 20 000 Total Liabilities 23 700 28 840 $53 780 $53 400 Share Capital 35 000 29 000 Retained Earnings 18 780 24 400 $53 780 $53 400 Net Assets Equity * The (net) notation next to Accounts Receivable means this figure is net of the Allowance for Doubtful Debts 14 GOLDSTAR HOLDINGS LTD INCOME STATEMENT FOR THE YEAR ENDED 30TH June 2016 Net Sales $104 000 Cost of Sales 61 800 less Discount Received 450 Gross Profit 61 350 42 650 Expenses: Selling & Admin Expense $20 160 Doubtful Debts Expense 430 Depreciation Expense 6 000 Interest Expense 2 680 Profit before Tax 29 270 13 380 Income Tax Expense 4 000 Profit $ 9 380 REQUIRED: a. Using the template provided, prepare a statement of cash flows. Show all calculations on the pro forma. [14 marks] b. The owner of Goldstar Holdings Ltd can't understand why his increase in cash is so different to the profit figure. Explain to the owner at least two factors that may be causing this difference. [2 marks] 15 Question 4(a) GOLDSTAR HOLDINGS LTD Cash Flow Statement FOR THE YEAR ENDED 30th JUNE 2016 $'000 Cash Flows from Operating Activities Receipts from customers Payments to suppliers & employees Cash generated by operations Interest paid Income tax paid $'000 Cash Flows from Investing Activities Cash Flows from Financing Activities Payment of Mortgage Proceeds from Share Issue Dividends Paid Net increase / decrease in cash held Cash at the beginning of the year Cash at the end of the year ALL WORKINGS MUST BE PRESENTED BELOW OR THE CASHFLOW STATEMENT WILL RECEIVE NO MARKS __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ 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__________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ [2 marks] 18 The following aspects of students' written communication skills development are also awarded a total of 9 marks. PARAPHRASING Presenting ideas and information that student read in their own words, Not simply taking what someone else has written and changing a few words. It is about translating another person's ideas into the student's own words. Mark (maximum 3 marks) BEING RELEVANT Does what is written contribute to answering the question(s) Setting out to specifically answer the question(s) by using relevant information, Staying 'on track' with answers, Avoiding straying from the question and going off on irrelevant tangents. Mark (maximum 3 marks) WRITING FOR A PROFESSIONAL BUSINESS AUDIENCE (including good presentation) The written work is clear and understandable, Where applicable, the written work is based on the facts and available evidence, Exaggeration and bold statements which are not supported by the facts and evidence are avoided. Good presentation The written work contains no spelling and grammatical errors. Obvious evidence of editing displayed. (Where the work contains any spelling and grammatical errors, it cannot be awarded 3 marks), Any headings and sub-headings display properly, and are used consistently throughout the document, Page numbering is used. It is usual for page numbering to commence on page 2 of a business document as \"2\