INTRODUCTION TO FINANCIAL ACCOUNTING (ACC2001) SUMMER SEMESTER AY 2020/21

GROUP ASSIGNMENT

INSTRUCTIONS:

Groups must consist of a minimum of four (4) and a maximum of five (5) students.

The assignment consists of two (2) components which total 15%. These components are

as follows:

o Part A: Five structured questions (8%)

o Part B: Audiovisual presentation (7%)

A project management report must be submitted with the project. This should clearly

indicate the specific tasks completed by each group member for all parts of the project.

The written portions of the project must be submitted in a single Word or PDF document, with all sections clearly labelled. Excel or other spreadsheet files will not be accepted. The document should include:

o Cover page (including names and ID numbers of all group members) o Project management report

o Submissions for Part A

Times New Roman font, size 12, with single line spacing should be used.

Marks will be deducted for poor formatting and presentation.

Part B will require the submission of a video file.

The assignment is due on Friday, July 16 by 11:59pm.

Both the written document and video must be submitted at the same time.

Late and/or incomplete submissions will attract a penalty of a 20% reduction in score for each calendar day or part thereof that the full project is outstanding.

Any evidence of plagiarism for either section of the project will result in marks being deducted.

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PART A: STRUCTURED QUESTIONS Question 1: Control Accounts and Incomplete Records

RazzleDazzle Traders has provided the following details for the year ended March 31, 2021:

Bank

Cash sales 297,500 Receipts from debtors 270,500 Fixtures 396,500 Bank interest 13,300 Commission 90,200

Balance b/d 93,000 Drawings 74,500 Payments to suppliers 126,800 Equipment 436,500

Rent

Rates

Wages

Cash purchases Utilities

Loan Balance c/d

20,000 11,700 85,000 66,300

9,000 101,000 44,200 1,068,000

List of balances:

Details

1,068,000

Apr 1

Mar 31

89,500 74,300 62,500

105,000 780,000 211,000 412,000

6,600 22,300 18,200

Creditors 66,400 Debtors 101,200 Stock 55,000 Loan 206,000 Land 780,000 Fixtures 620,000 Equipment 0

Rates owing Commission prepaid Wages prepaid

Additional notes:

7,200 19,500 17,400

Stock taken for personal use amounted to $11,300

Amounts written off as bad debts totaled $9,200

Discounts received from credit suppliers amounted to $10,400 The sale of fixtures was at net book value

REQUIRED:

Derive the trial balance, statement of profit or loss, and statement of financial position for RazzleDazzle Traders for the period. Your submission MUST include all workings, such as the statement of affairs and control accounts.

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Question 2: Manufacturing Accounts

Sugar Buns, a pastry manufacturer, has presented you with the following financial information for the year ending December 31, 2020:

$$ 446,500

14,400

5,200

27,600

1,399,000

16,600 920,000 316,000 360,000

8,600 286,000

250,000 18,400

55,800 36,500

37,500

8,600

84,000

44,000

31,000 28,600 21,300 49,000 29,500

27,700 8,700

10,300

16,100 177,000

34,000

72,500

2,577,200

Capital

Drawings

Provision for bad debts Utilities

Sales

Direct expenses

Building

Motor vehicle

Machinery and equipment Provision for depreciation:

Building

Motor vehicle

Machinery and equipment

Carriage inwards on indirect materials Wages

Loan

Discounts allowed

Bank

Insurance

Office expenses

Provision for unrealised profits Debtors

Creditors

Opening stock of raw materials Opening stock of indirect material Opening stock of work in progress Opening stock of finished goods Factory general expenses Commission received

Returns inwards

Discounts received on raw materials Returns outwards on raw materials Purchases of raw material Purchases of indirect material Telephone charges

140,000 98,000 76,000

2,577,200

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Additional information:

1. Stock on hand at the end of the year was as follows:

Raw material Indirect material Work in progress Finished goods

2. Adjustments are to be

Utilities Telephone Insurance Commission

$32,400 $12,800 $33,100 $27,200

made to the following items of expenses and revenue:

Prepaid by $8,100 Prepaid by $3,700 Owing by $5,600 Prepaid by $9,200

3. Fixed assets are to be depreciated as follows:

Building

Motor vehicle

Machinery and equipment

12% reducing balance 15% reducing balance 8% straight line

4. Of the total wages amount, 35% is attributable to direct labour, 25% is attributable to indirect labour, and 40% is attributable to administrative staff.

5. Expenses are to be apportioned as follows:

Factory

Office

Utilities 60% 40% Insurance 80% 20% Telephone 35% 65%

Depreciation - building

Depreciation - machinery & equipment Depreciation - motor vehicle

90% 10% 75% 25% 20% 80%

3. The good produced are to be marked up by 25% before transfer.

4. Provision for bad debts is to be revised to 20% of debtors.

REQUIRED:

Using the information provided, prepare Sugar Buns manufacturing account, statement of profit or loss, and statement of financial position for the period. The manufacturing account and the statement of profit or loss should be shown separately.

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Question 3: Partnership Accounts

Betty and Veronica are partners in a comic book store, sharing their profits and losses in the ratio of the capital contributed. They have provided the following information for the year to March 31, 2021:

Carriage outwards Discount allowed Mortgage interest Sales

Provision for depreciation on premises Purchases

Stock at April 1, 2020

Bad debts

5% mortgage Capital

Betty

Veronica Current account

Betty

Veronica Drawings

Betty

Veronica

Returns

Motor vehicle

Carriage inwards

Equipment

Provision for depreciation on equipment Premises

Discount received Bank

Creditors

Wages and salaries Office expenses Provision for bad debts Debtors

Commission received

$$ 6,100

4,100 10,200

297,100 89,200 6,800

8,200

9,500

533,800 92,000

318,000

100,000 120,000

32,300 15,400 12,700

210,000 7,500 88,000

10,200

27,200 320,000

11,100 56,900

29,600 38,900

15,100

3,600

51,000

14,500

1,269,500

1,269,500

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Additional information:

Stock at the end of the year amounted to $47,900.

The partnership agreement allows for interest on capital at 6%, while interest is charged

on drawings at a rate of 9%.

Betty receives a salary of $978 per month.

Wages and salaries is owing by $7,000, while office expenses and commission is prepaid by $3,800 and $5,600 respectively.

Depreciation on the motor vehicle and equipment is to be charged at 12% and 8% respectively on cost, while the premises is to be depreciated at 15% reducing balance.

Provision for bad debt is to be revised to 15% of debtors. REQUIRED:

Using the information provided, prepare Betty and Veronicas statement of profit or loss, appropriation account, current account, and statement of financial position for the period. The statement of profit or loss and the appropriation account should be shown separately.

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Question 4: Company Accounts

Juniper Ltd has presented the following balances for the

Discount

Retained earnings at April 1, 2020 Goodwill

8% Preference shares @ $0.60 Other operating expenses Creditors

Revenue

Rent expense

Commission received

7% Mortgage

Land

Building

Ordinary shares @ $0.80 Provision for depreciation:

Building

Furniture and fittings Insurance

Furniture and fittings Purchases

Debenture interest Mortgage interest Wages and salaries Bank

Carriage inwards

Returns

Cash

Inventory at April 1, 2020 Rent received

Debtors

12% Debenture

General reserves

Interim ordinary dividends

year ended March 31, 2021: $$

13,800 105,600 287,000

21,200

570,000 21,800

41,600 1,389,700

21,200

31,800

245,000 850,000

730,000

600,000

170,000 35,000

26,100 5,700

11,600 216,000 896,000

8,200

7,100 84,000

12,200 38,700 59,400

17,100

45,600 51,000

215,000 23,800

3,431,900

12,600

3,431,900

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The following additional information is available:

1. At March 31, 2021, closing inventory was $74,500.

2. At the end of the period, it was discovered that one employee was owed $12,300 in salaries while another was overpaid by $8,500. Additionally, insurance owing was $7,000.

3. The following appropriation of the expenses must be made:

Admin Rent 60% Wages & salaries 75% Insurance 30% Depreciation 80%

Selling & Dist. 40%

25%

70%

20%

4. On November 1, 2020 the company rented some of its office space to Genna Ltd. At that date Genna Ltd paid rent covering the next ten months.

5. Depreciation should be provided as follows:

Buildings 6% on cost

Furniture & fittings 12% on reducing balance

6. Goodwill impairment was estimated to be 15%.

7. Corporation tax is estimated to be $33,600.

8. The preference dividends are to be honoured in full.

9. Towards the end of the year, the company made a new issue of 180,000 ordinary shares with the same par value as the existing shares. Each share was issued for $1.20.

10. A transfer of $66,000 is to be made to the general reserve.

REQUIRED:

Using the information provided, prepare Juniper Ltds statement of profit or loss, statement of changes in equity, and statement of financial position for the period.

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Question 5: Cash Flow Statements

Silverstone Enterprise produced the following financial statements up to June 30, 2020:

Statements of financial position for 2019 and 2020:

Non-current assets

Goodwill

Building

Equipment

Long term investments

Current assets

2019

480,000 (28,500) 346,000 (22,500)

196,000 451,500 323,500 142,000

1,113,000

111,100

1,224,100

813,600 286,600

123,900

1,224,100

2020

510,000 (37,000) 410,000 (52,500)

42,600 25,000 16,700 19,200 21,000

409,000 54,000 84,000

250,100

35,800 - 12,600 51,200

164,000 473,000 357,500

93,000 1,087,500

124,500

1,212,000

797,100 315,300

99,600

1,212,000

Stock 27,900 Short term investment 44,300 Debtors 31,300 Bank - Cash 7,600

Equity

Share capital 585,000 Share premium 80,000 General reserves 36,000 Retained earnings 112,600

Non-current liability

10% Loan

Current liabilities

Creditors 47,100 Bank overdraft 13,300 Tax payable 29,500 Dividends 34,000

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Condensed income statement for 2020:

Sales

Gross profit

Profit before tax

Tax

Profit after tax Dividends

Transfer to reserves Profit for the year Retained earnings b/d Retained earnings c/d

Additional notes:

1,356,000 945,000 454,000

(217,500) 236,500 (51,000) (48,000) 137,500 112,600 250,100

During the year, equipment costing $77,600 with a book value of $51,000 was sold at a gain of $11,200.

REQUIRED:

Using the information provided, prepare Silverstone Enterprises cash flow statement for the period.

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PART B: AUDIOVISUAL PRESENTATION

Each group will record a song, poem, skit, rap, deejay, or other appropriate creative form of audiovisual presentation agreeing or disagreeing with the following topic:

When establishing a business, it is more advantageous to set up a company than a partnership

At a minimum, your response should include the following:

Definition of a company

Definition of a partnership

Types/forms of companies

Types/forms of partnerships

Key differences between a company and a partnership

Advantages and disadvantages of setting up either form of business

A definitive response to the topic (agreeing or disagreeing) and your justification for the

stance taken

Please be guided by the following:

The recording must incorporate both audio and video.

Each recording must begin with a group introduction which shows the face of each group

member along with their name.

The recording should be a minimum of four (4) minutes and a maximum of six (6)

minutes in duration (not including the introduction).

Patois may be used.

Beyond the introduction, not all group members are required to participate in the actual

presentation, but all are expected to contribute to the process.

Marks will be awarded for the creativity of the presentation (30%) and the extent to

which the question has been fully and accurately addressed (50%). Marks are also

awarded for organisation and delivery (20%).

Recordings done via video-conferencing technologies (e.g. Zoom) or other means of

remote collaboration are acceptable.

If groups decide to meet in person for recording purposes, do ensure proper health

protocols are observed.

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