Unit: ACC101 – Fundamentals of Accounting IWeighting: The assignment is worth 40% of the total unit weight.
1. Students are required to cover all stated requirements.2. Your answer must be uploaded to Moodle in word file with your full name and student ID number.3. You need to support your answers with appropriate Harvardstyle references where necessary.4. Only include information in your appendixes that has been directly referred to in the body of your document.5. Include a title/cover page containing the subject title and codeand the name, student id number and name.6. Please save the document as ACC101_B1T32018_first name_Surename_Student NumberEg:ACC101_B1T32018_John_Smith_20160000
1Question 1 Practical Questions (15 marks in total)
The following transactions for ABC Constructions occurred during April and May 2014:April 1 Owner contributes capital of $40 000, by an additional injection of cash.April 3 Cash is received from a customer, F. Turnip, $14 000.April 5 Supplies are requisitioned for use in the office, $500.April 9 Installation services are provided on credit for $13 500 to Banana Ltd.April 12 A $7 000 loan is taken out with AMP Loans Ltd. Interest is payable at 10% p.a.April 18 A bill for electricity consumed is received, $400.April 24 Office fixtures are purchased from Dots Ltd for $6 000. $2 000 is paid immediately by cheque, the remainder is due in July.April 27 A cheque is issued in payment of the electricity account received on 18 April.April 29 Prepaid insurance costs have been used to the extent of $800.
May 1 Payment on account is made by cheque to Apple Suppliers, $40 000.May 2 Supplies are purchased on account from Deluxe Supplies Ltd, $2 900.May 13 Rent for the month is paid by cheque, $7 000.May 17 Insurance expired, $780.May 23 Installation equipment is purchased on account from Apple Suppliers, $26 000.May 29 A salary of $5 000 is paid by cheque.
RequiredAssuming that the accounting period is a calendar year, prepare general journal entries for ABC Constructions Ltd during April and May 2014. Ignore GST.
Question 2: (18 marks)ADJUSTING ENTRIES AND IMPACT ON FINANCIAL STATEMENTSNewcastle Retail Services ends its financial year on 30 June.RequiredA. Using the following information, make the necessary adjusting entries. (12 mark)
1. Rent of office premises of $1,216 for the 4-month period ending 30 August is due to be paid in July.
2. The Supplies account had a $600 debit balance on 1 July of the preceding year. Supplies costing $1,400 were purchased during the year, and $400 of supplies are on hand as at 30 June. 3. The telephone expense of $400 is unpaid and unrecorded at 30 June. 4. Annual depreciation on equipment is estimated to be $14,000. The balance in Accumulated Depreciation at the beginning of the financial year was $18,000. 5. Newcastle Retail Services borrowed $60 000 from ABC Bank on 15 April. The principal, plus 8% interest, is payable on 15 August. Accrued interest on 30 June has not been recorded. 6. The office assistant earns $280 a day. He will be paid in July for the 5-day period ending 2 July. 7. Newcastle Retail Services purchased a 6-month insurance policy for $1,134 on 1 December. A 24-month policy was purchased on 30 May for $2,544. Both purchases were recorded by debiting Prepaid Insurance. 8. On 1 June, Newcastle Retail Services received 4 months’ rent in advance, totalling $1,792. This was recorded by a credit to Unearned Rental Revenue. B. As you know, all adjusting entries affect one balance sheet account and one income statement account. Based on your adjusting entries prepared in requirement A (6 mark):1. Calculate the increase or decrease in profit. (2 mark)
2. Calculate the increase or decrease in total assets, total liabilities and total equity. (4 mark)
Question 3 Explain the difference between accounting standards, interpretations and the accounting framework. (7 marks)