2108AFE Financial Accounting
Practice Set Assessment – Trimester 2, 2018
|Practice Set Assignment and Quiz||Students are required to complete the practice set assessment item in their own time and submit the completed files by the due date and time. Students will then complete a 10-question quiz based on information in the practice set.|
|Due Date||Practice Set File – 27 August 2018 by 9am.
Online Quiz – Available from 27 August at 9am until 31 August 5pm.
|Where to submit your assessable work||The Practice Set File is to be uploaded via the submission point under the Assessment tab in L@G.
The Online Quiz will be available under the Assessment tab in L@G.
|Weighting||20% of your final grade|
Students are required to complete a practice set, which concentrates on the way financial information is recorded using a manual accounting system. This process begins with the collection and analysis of data and finishes by summarising that data into financial report. Topics 1 to 5 are covered (i.e. up to and including internal control, cash, and receivables).
The practice set assignment assesses students’ understanding of the process involved in using a manual accounting system (10% in total). After completing the practice set assignment, students are required to complete a 10-question online quiz based on the practice set document. This online quiz assesses your ability to understand the accounting process and identify and extract relevant accounting information (10%).
Further details about the online quiz are as follows:
- The quiz contains ten (10) questions worth one (1) mark each (10% in total)
- There is a pool of questions used for this quiz, which are randomly allocated as each student begins the quiz. This system means that everyone will not get the same questions.
- Two (2) attempts of the quiz are permitted.
- The time allowed for the quiz is 60 minutes for each attempt.
- The highest score of the two attempts will count towards your final grade in the course.
- The practice set document must be uploaded to Learning@Griffith by 27 August 2018 at 9am.
- After submission of the practice set document, the quiz will be available online from 27 August at 9am until 31 August 5pm.
Hannah’s Fun & Fitness Centre
Background and Facts
Hannah Park is the owner of Hannah’s Fun & Fitness Centre, a gym and fitness business she started several years ago. Hannah provides gym memberships. She also sells protein blend products and T-Shirts, that she purchases from manufacturers. Hannah operates the business herself and employs one person full-time to assist her. Hannah’s Fun & Fitness Centre uses a perpetual inventory system and uses FIFO (First In First Out).
The business is operated from a rented premise and rent is paid in advance for 4 months.
The business has a variety of clients with whom Hannah has built up a strong relationship. She offers them terms of 2/10, net/30.
The business is registered for GST. Business Activity Statements (BAS) are submitted quarterly to the Australia Taxation Office on an accrual basis.
Currently, the business uses a manual accounting system but plans to test a MYOB accounting system later in the year.
Hannah’s Fun & Fitness Centre uses the following specialised and general journals to record business transactions.
- Sales Journal – to record all invoices issued for sales of inventory
- Purchases Journal – to record all credit purchases
- Cash Receipts Journal – to record all cash received
- Cash Payments Journal – to record all cash payments
- General Journal – to record all other transactions
Hannah’s Fun & Fitness Centre uses a general ledger in the form of a 4-column running balance (as described on page 22 (page 72) Exhibit 2-13 of Custom Text Chapter 1 (Chapter 2 of original). An Accounts Receivable and Accounts Payable subsidiary ledger is also used in this format.
Financial Statements are prepared at the end of each month, and the accounts are closed off at the end of each month.
All necessary pro-formas are included and are to be used to complete the manual practice set for September. The assignment can be completed either manually using the Excel templates provided or by computer in Excel.
Chart of Accounts and Opening Balances 1st September
|Account Number||Account Name||Debit||Credit|
|110||Cash at Bank||4,689|
|121||Allowance for Doubtful Debts||236|
|130||Prepaid Gym Rent||8,000|
|173||Accumulated Depreciation – Office Furniture||1,195|
|181||Accumulated Depreciation – Computer|
|500||Cost of Sales|
|512||Bad and doubtful debts expense|
|521||Depreciation Expense – Office Furniture|
|525||Depreciation Expense – Computer|
|540||Gym Rent Expense|
|560||Office Supplies Expense|
|580||Telephone and Internet Expense|
All account balances at 1st September are normal in nature.
Accounts Receivable Subsidiary Ledger
As at 1 September (all balances relate to August credit sales)
|Arnold Softball Club||3,520|
Accounts Payable Subsidiary Ledger
As at 1 September (all balances relate to August credit purchases)
|Protein & Fitness Supplies Ltd||8,515|
|T-Shirts by Design||660|
Inventory on Hand
As at 1 September
|Units on Hand||Cost per Unit||Total|
|Protein Blend 2.3kgs Pack||252||56||14,112|
The following transactions relate to the operations of Hannah’s Fun & Fitness Centre during September:
Note: All amounts are GST-inclusive unless otherwise stated.
Credit sales are made on credit terms of 2/10, n30.
Round all calculations to the nearest cent.
|1.||September 1||Received the membership fees for September in cash, $15,400.|
|2.||September 3||Sold 5 Protein Blend Packs for cash – $467.50|
|3.||September 3||Purchased inventory on credit from Protein and Fitness Supplies $8,800
120 Units of Protein Blend Packs
|4.||September 5||Purchased office supplies for $550 – cheque no 254 (record this in Account number 150 Office Supplies)|
|5.||September 5||Received partial payment from C. Shannon for August sales – $1,500
No discounts were applicable.
|6.||September 8||Sold 15 T-Shirts to C. Shannon on credit for $495 – Invoice #6331|
|7.||September 8||Purchased inventory on credit from T-Shirts by Design – $3,300 (including GST) – 120 T-Shirts at $25 each (excluding GST)|
|8.||September 9||Received amount owed by Arnold Softball Club for August invoices less applicable discount as it was received within the relevant discount period.|
|9.||September 10||Paid fortnightly wages of $2,116 – cheque no 255
($1,875 relates to September wages; $241 relates to the wages accrued for August)
|10.||September 12||Paid FabAb Magazine Ltd for advertising for September $440– cheque no 256|
|11.||September 15||Purchased Computer for $2,761 from Computer Central on credit.|
|12.||September 15||Sold on account to C. Shannon Invoice #6332
120 Protein Blend Packs $11,220
|13.||September 15||Banked the takings from cash sales for the last fortnight – $4,994.
4 T-Shirts $132
52 Protein Blend Packs $4,862
|14.||September 16||The owner withdrew $500 cash – cheque no 257|
|15.||September 18||Paid amount owing from August to Protein and Fitness Supplies – $8,515 -cheque 258. No discounts were applicable.|
|16.||September 24||Paid fortnightly wages of $1,875 – cheque no 259|
|17.||September 24||Paid superannuation contributions owing from August – $168 – cheque no 260|
|18.||September 29||Paid the monthly telephone account for $770 – cheque no 261|
|19.||September 30||Banked the takings from cash sales for the last fortnight – $1,947.
25 T-Shirts $825
12 Protein Blend Packs $1,122
|20.||September 30||Recorded bank charges for the month $16.|
Instructions for Completion of Practice Set
A. Open all general ledger accounts by inserting the opening balances at 1 September as shown in the Chart of Accounts on page 3. For example, the balance of account 110 – Cash at Bank is $4,689 debit. Write “Opening Balance” in the “Details” column, and place $4,689 in the “Debit” balance column.
B. Open all subsidiary ledger accounts for accounts receivable and accounts payable by inserting the opening balances as at 1 September as shown in the schedule of accounts receivable and accounts payable on page 4. Insert the opening inventory balances into the inventory cards.
Note: For the general ledger, accounts receivable subsidiary ledger and accounts payable subsidiary ledgers, all accounts have normal balances
C. Record the transactions for September in the appropriate journals provided (narrations are not required).
D. Post daily to the accounts receivable and accounts payable subsidiary ledgers.Post daily from the general journal. All other amounts will be posted at the end of the month.
Note: For posting reference purposes, use the journal page names and numbers. For example, when posting from the sales journal the reference will be “SJ12”.
E. Total all columns of the special journals. Post from the special journals to the general ledger.
F. Prepare schedules of Accounts Receivable and Accounts Payable. Check that the total of the Schedule of Accounts Receivable equals the Accounts Receivable Control account in the general ledger and that the Schedule of Accounts Payable equals the Accounts Payable account in the general ledger.
G. Use the worksheet provided to prepare an Unadjusted Trial Balance as at 30 September.
Check figures for this stage of the assignment are as follows:
- Total of the Cash column in the Cash Receipts Journal – $27,758.10
- Cash at Bank account balance – Dr $17497.10
- Inventory account balance – $14768.00.
- GST Clearing account balance – Cr $2686.10
- Unadjusted trial balance from worksheet – $80639.10
Note: If any of your figures do not match those above, you have made an error which you will need to find and correct.
Using the following information record the necessary adjusting journal entries at 30 September in the general journal. Post these to the general ledger.
- Rent of $16,000 is paid every 4 months in advance. The last payment was on 1st July.
Office Furniture is depreciated using the straight-line method.
Existing office Furniture has a useful life of 5 years with a residual value of $1,200.
Record depreciation for one month.
On September 15, the business purchased a computer. It has a useful life of 3 years and a residual value of $350 and will be depreciated using the straight-line method. Record depreciation for half of the month.
- Accrued Wages
Wages owing at 30 September totalled $958.
Superannuation contributions accrued for September total $90.
- Office Supplies
A stocktake of office supplies was performed on 30 September. It was noted that $860 of supplies remain.
- Bad Debts
An assessment of bad and doubtful debts at 30 September showed an increase in the number of accounts falling into this category. Hannah has decided to increase the Allowance for Doubtful Debts to 4% of the accounts receivable balance at September 30.
I. Record these adjustments in the adjustments column of the worksheet.
J. Complete the worksheet.
K. Record all closing entries in the general journal and post them to the general ledger.
L. Prepare a Post-Closing Trial Balance as at 30 September.
M. Prepare the Income Statement (functional format), Statement of Changes in Equity, and Classified Balance Sheet.
Click on Buy Solution and make payment. All prices shown above are in USD. Payment supported in all currencies. Price shown above includes the solution of all questions mentioned on this page. Please note that our prices are fixed (do not bargain).
After making payment, solution is available instantly.Solution is available either in Word or Excel format unless otherwise specified.
If your question is slightly different from the above question, please contact us at firstname.lastname@example.org with your version of question.