Instructions for Students
Please read the following instructions carefully
- This assessment is to be completed according to the instructions given by your assessor.
- Students are allowed to take this assessment home.
- Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date.
- Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
- If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.
- Please refer to the College re-assessment and re-enrolment policy for more information.
Assessment1 - (Process financial transactions and interim report)
Question 1 Accounting Equation
J Smith commenced business on 1 November 2012 with Premises $150,000, Bank 20,000, Plant & Machinery $15,000, Inventory $10,000, Bank Loan $50,000 and Accounts Payable $8,000. Following are the transactions for the month of April after the commencement.
i. 2 November: Purchased inventory for $5,000.
ii. 4 November: J Smith made payment towards his bank loan for $2,000.
iii. 9 November: Purchase Motor Vehicle for $10,000 was on credit.
iv. 13 November J Smith purchased inventory on credit for $6,000.
v. 16 November A laptop was purchased by J Smith for cash $900
vi. 19 November: J Smith paid the Accounts payable $10,000.
vii. 21 November: J Smith took out $1,500 from the business for personal use.
viii. 22 November: J Smith sold goods for cash $5000, the cost of goods sold was $3,500
ix. 30 November: J Smith paid wages $2,500
Instruction for the students:
Process the above transactions (including the one for new business commencement) in the accounting equation format.
Hint: Calculate opening Capital to balance the accounting equation at the commencement of the business.
Question 2 Fixing Errors in Trial Balance:
The following trial balance does not balance.
The following corrections/adjustments needs to be made for errors in the trial balance:
- An amount of $1,000 posted incorrectly to the credit side of the bank account.
- An amount of $1,200 posted wrongly to the credit instead of debit side of the Wages account.
- A number of account balances placed on the wrong side of the trial balance.
- An amount of $2000 received against Accounts Receivable for previous credit sales has wrongly credited to the Accounts Payable Account.
Make the necessary adjustments in the trial balance, by placing the account balance in the correct [debit/credit] column provided.
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Trial Balance
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Write correct balances here
|
|
Account
|
Debit
|
Credit
|
Debit
|
Credit
|
|
Drawings
|
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12,000
|
|
|
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Bank Loan
|
11,000
|
|
|
|
|
Office equipment
|
19,500
|
|
|
|
|
Interest paid
|
820
|
|
|
|
|
Accounts receivable
|
|
36,330
|
|
|
|
Bank
|
21,100
|
|
|
|
|
Accounts payable
|
11,200
|
|
|
|
|
GST Collected/Payable
|
3,700
|
|
|
|
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Insurance
|
1,200
|
|
|
|
|
Capital
|
|
50,000
|
|
|
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Computer equipment
|
5,200
|
|
|
|
|
Sales
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448,000
|
|
|
|
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Advertising
|
4,800
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|
|
|
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Cost of goods sold
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|
336,000
|
|
|
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Bad debts
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|
500
|
|
|
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Bank fees
|
|
150
|
|
|
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Inventory
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27,500
|
|
|
|
|
|
607,420
|
434,980
|
|
|
Specialised Journal Entries: Question 3
a) Identify the journals that would be used to record the following transactions
b) Enter the transactions from part (a) above into the appropriate journals and total each journal
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Date
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Transaction details
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Source Documents
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Amount
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Inc GST
|
Journal
??
|
|
Mar 01
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R. Stirling commenced a building supply business by depositing cash in the back
|
Memo
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30,000
|
|
|
|
02
|
Purchased fixtures & fittings for cash
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Chq 0001
|
6,600
|
|
|
|
02
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Paid rent on shop premises
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Chq 0002
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1,100
|
|
|
|
05
|
Purchased stock on Credit - B Jones
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Invoice 47
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2,200
|
|
|
|
06
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Sold goods for cash
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Cash
|
770
|
|
|
|
06
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Credit sales to E. Johnson
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Invoice 11
|
1,100
|
|
|
|
09
|
Paid wages
|
Chq 0003
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650
|
|
|
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09
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Sold goods to F Black
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Invoice 12
|
704
|
|
|
|
10
|
Cash sales
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Cash
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2,750
|
|
|
|
13
|
Paid television advertising
|
Chq 0004
|
2,420
|
|
|
|
14
|
Cash sales
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Cash
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1,320
|
|
|
|
14
|
Sales to E. Thomson
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Invoice 13
|
550
|
|
|
|
16
|
Sales to D Brown
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Invoice 14
|
825
|
|
|
|
16
|
Purchases from P. Plummer
|
Invoice 687
|
792
|
|
|
|
17
|
Cash purchases
|
Chq 0005
|
1,650
|
|
|
|
17
|
Paid wages
|
Chq 0006
|
450
|
|
|
|
21
|
Cash purchases
|
Chq 0007
|
1,265
|
|
|
|
21
|
Cash sales
|
Cash
|
2,200
|
|
|
|
25
|
Credit sales to E. Green
|
Invoice 15
|
880
|
|
|
|
27
|
Received cash from F Black for payment of account in full
|
Receipt 01
|
704
|
|
|
|
28
|
Paid bank interest
|
Chq 0008
|
250
|
|
|
Question 4 Special transactions
You have been asked to record the following transactions in the accounting records of Bright Limited:
- The amount owing by Shade Supplies, an accounts receivable, of $1,650 will not be collected and is to be written-off as a bad debt. GST collected was accounted for at the time of this sale.
- An item of Motor Vehicle has been sold for $11,000 cash, including GST.
- The owner of the business has taken a lap top home for personal use. The book value of this lap top was 1,000, plus GST.
- The cheque received from Sunny Pty Ltd for $660 was dishonoured by the bank.
- The business purchased a motor vehicle on credit from Sydney Cars Ltd for $25,000, plus GST.
- The owner contributed $50,000 in additional cash to the business.
Required:
Prepare the general journal entries to reflect these transactions (dates and folios not required)