![Edward Wright (the Managing Director of the company), the
important phases in
implementing and maintaining an Accounting system and the
factors that need to be
considered when developing such a system.
Your discussion of the above statements should in total be no
more than 800 words in
length. (Show all references used).
Please complete your discussion in the WRITTEN
COMPONENT section on LMS.
* Requirements (1) and (2) need to be completed o n l i n e o n
L M S and b e submitted
no later than Monday 15th May, 2017, by 12.00 noon. [Only one
online submission
per Group is required. The aggregate marks allocated to
requirements (1) and (2)
are 15% in total.]
Long-Term Investment Decisions](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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FINANCIAL ACCOUNTING – ACCT1101 Group Assignment (Semester.docx
- 1. FINANCIAL ACCOUNTING – ACCT1101 Group Assignment (Semester 1, 2017) REQUIRED: (1) Complete the Edward's Electrical Goods Pty Ltd Accounting Practice Set online on LMS as per the general instructions. (2) Once you have completed the accounts as per the Accounting Practice Set, discuss which parts of the Accounting cycle process could have been completed automatically by using a computer software package such as ACCPAC or QuickBooks. Your answer should make reference to any specific documents or statements found in Edward's Electrical Goods Pty Ltd accounts where this occurs. As the firm is interested in developing an Accounting system in the near future, explain to
- 2. Edward Wright (the Managing Director of the company), the important phases in implementing and maintaining an Accounting system and the factors that need to be considered when developing such a system. Your discussion of the above statements should in total be no more than 800 words in length. (Show all references used). Please complete your discussion in the WRITTEN COMPONENT section on LMS. * Requirements (1) and (2) need to be completed o n l i n e o n L M S and b e submitted no later than Monday 15th May, 2017, by 12.00 noon. [Only one online submission per Group is required. The aggregate marks allocated to requirements (1) and (2) are 15% in total.] Long-Term Investment Decisions
- 3. Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients. Use the Internet research government policies and regulation. Write a six to eight (6-8) page paper in which you: 1. Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response. 2. Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company. 3. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response. 4. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities. 5. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response. 6. Use at least seven (7) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource. Your assignment must follow these formatting requirements: · Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your
- 4. professor for any additional instructions. · Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. Your assignment must follow these formatting requirements: · Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. · Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. · Must have introduction and conclusion. Each paragraph must be labeled. · All body paragraphs must have in text citations.
- 5. EDWARD'S ELECTRICAL GOODS PTY LTD – ACCOUNTING PRACTICE SET 5
- 6. Table of Contents INTRODUCTION 5 Company Background 5 Accounting System Information 5 UNADJUSTED TRIAL BALANCE AND CHART OF ACCOUNTS 6 As at 31 May 2017 6 SUBSIDIARY LEDGERS7 Schedule of Accounts Receivable 7 As at 31 May 2017 7 Schedule of Accounts Payable 7 As at 31 May 2017 7 TRANSACTIONS 8 For June 2017 8
- 7. Instructions 9 ADJUSTING ENTRIES 10 Cash Receipts Journal 18 Cash Payments Journal 19 Sales Journal 20 Purchases Journal 21 LEDGERS 22 Accounts Receivable Subsidiary Ledger 23 Accounts Payable Subsidiary Ledger 24 General Ledger25 WORKSHEET 34 FINANCIAL STATEMENTS 36 Schedules of Subsidiary Ledgers 36 Income Statement 37 Statement of Changes in Equity 38 Balance Sheet 39 Post-closing Trial Balance 40 WRITTEN COMPONENT 41 STUDENT DECLARATION FOR COMPLETION OF WORK 46 INTRODUCTION The objective of this Accounting practice set is to provide students with an insight into the process of recording transactions, completing adjusting and closing entries, and preparing financial statements for a retail business.Company Background Edward's Electrical Goods has been in business in Sydney since July, 2011. The company was started by Edward Wright and operates a shop which sells electrical equipment on a retail basis to other businesses on credit and the public on cash terms. The company's share capital consists of 126,000 ordinary shares, issued at $1 each, that are owned by various members of the Wright family. The company employs a combination of sales and administration staff to operate the business.Accounting System Information & Procedures The company has a financial year end of 30 June and prepares adjusting entries at the end of the financial year. To ensure
- 8. efficiency of its accounting procedures, the company uses the following Special Journals to maintain its accounting records: 1. Sales Journal (SJ): to record all sales of inventory on credit 2. Purchases Journal (PJ): to record all purchases of inventory on credit 3. Cash Receipts Journal (CRJ): to record all cash receipts 4. Cash Payments Journal (CPJ): to record all cash payments 5. General Journal (GJ): to record all transactions other than the above. Business transactions are recorded for Edward's Electrical Goods on a daily basis in one of these five journals in the accounts. Additionally, the company maintains a general ledger to record postings from the journals. Subsidiary Ledgers are used to record the separate details of Accounts Receivable and Accounts Payable. Transactions are posted immediately to the relevant ledger account if they are entered into the general journal, the “other” column of the Cash Receipts Journal or Cash Payments Journal, or if they affect any of the Accounts Receivable or Accounts Payable subsidiary ledger accounts. Apart from these transactions, totals of the special journals are taken at the end of the month and then posted to the appropriate accounts. The company uses a periodic inventory system. In practice, the company would be required to collect and pay Goods and Services Tax (GST) on its sales and purchases. However, for the purposes of this exercise, GST has been excluded. Please Note: All amounts in this practice set should be rounded to the nearest dollar. UNADJUSTED TRIAL BALANCE AND CHART OF
- 9. ACCOUNTS As at 31 May 2017 Acc. No. Account Debit ($) Credit ($) 100 Cash at Bank 68,292 101 Accounts Receivable Control 26,460 102 Store Supplies 16,779 103 Inventory 86,800 104 Prepaid Store Rent (paid 1 March 2017) 82,180 105 Prepaid Insurance (paid 1 Nov. 2016) 1,260 150 Store Shelving & Fittings 56,700 151
- 10. Accum. Depreciation – Shelving & Fittings 160 Equipment 19,250 161 Accumulated Depreciation - Equipment 9,450 200 Accounts Payable Control 17,066 201 Interest Payable 202 Utilities Payable 203 Wages Payable 204 Salaries Payable 205 Tax Payable 206
- 11. Dividend Payable 250 Bank Loan (due 1 June 2022) 67,438 300 Share Capital 126,000 301 Retained Profits (1 July 2016) 107,058 302 Dividends Declared 303 Profit and Loss Summary 400 Sales Revenue 449,526 401 Sales Discounts (Discount Allowed) 3,451 402 Sales Returns and Allowances 973 500
- 12. Purchases 214,095 501 Purchase Discounts (Discount Received) 2,688 502 Purchase Returns and Allowances 1,127 600 Freight-Out 322 601 Wages Expense - Sales Staff 107,569 602 Depreciation Expense - Shelving & Fittings 603 Depreciation Expense - Equipment 604 Supplies Expense 605 Rent Expense 606
- 13. Insurance Expense 607 Advertising Expense 4,872 608 Interest Expense 609 Utilities expense 6,496 610 Tax Expense 611 Sundry Expense 336 612 Salaries Expense – Office Staff 84,518 613 Bad Debts Expense
- 14. 780,353 780,353 SUBSIDIARY LEDGERS Schedule of Accounts Receivable As at 31 May 2017 Note: Edward's Electrical Shop offers all customers Credit Terms 2/10, n/30, unless otherwise stated Acc. No. Account Invoice date Amount ($) 101-1 Bellevue Hill Electrics 26 May 10,584 101-2 Glebe Lighting 15 May 5,348 101-3 Longueville Electrics 22 April 7,238 101-4 Vaucluse Lighting 10 May 3,290
- 15. $26,460 Schedule of Accounts Payable As at 31 May 2017 Acc. No. Account Invoice date Credit terms Amount ($) 200-1 Parramatta Electrical Engineering 28 May 2/10, n/60 4,830 200-2 Wentworth Lights Manufacturer 21 May 1/10, n/45 12,236
- 16. $17,066 TRANSACTIONSFor June 2017 Date Transaction WEEK 1 June 1 Bellevue Hill Electrics paid the entre balance of its account that was still outstanding. Delivered goods to Glebe Lighting for $7,588 and issued
- 17. invoice #401. Issued cheque #127 to pay $840 for delivery costs of inventory to their premises. June 2 Paid the amount owing to Parramatta Electrical Engineering. Cheque #128 was sent. June 3 Total Cash Sales for the week were $2142. WEEK 2 June 6 Longueville Electrics paid $3038 toward the amount it owes us. June 7 Made a purchase from Wentworth Light Manufacturers for $6510 for boutique lighting: Terms are 1/10, n/45 and date of invoice was 7 June. The firm issued cheque #129 for the purchase of store supplies amounting to $616. June 8 Bellevue Hill Electrics purchased inventory of $7,644. Invoice #402 was issued.
- 18. June 9 Some of the boutique light fittings purchased on 7 June from Wentworth Light Manufacturers were the wrong design. Returned inventory in exchange for a Credit Note of $2,100. June 10 Total Cash Sales for the week were $2,926. WEEK 3 June 13 Purchased inventory from Parramatta Electrical Engineering for $10,710. The invoice was dated 13 June. Credit terms are 2/10, n/30. June 14 Sold inventory to Longueville Electrics for $13,818 on invoice #403. Issued cheque #130 to pay for delivery costs of $1,050. June 15 Paid office staff salaries of $8,162. Cheque #131 was issued for payment. Cheque #132 was issued to pay sales staff wages, $6,930. June 16 The company issued cheque #133 to pay the amount still owing to Wentworth Light Manufacturers.
- 19. June 17 Total Cash Sales for the week were $2,779. WEEK 4 June 20 Longueville Electrics returned $2,618 of inventory purchased on 14 June. Issued a Credit Note for the transaction. June 21 Issued cheque #134 for $1,400 to pay for the annual gift the company donates to the Royal Children's Hospital Appeal. The gift is to be recorded as a sundry expense in the accounts. June 22 Purchased inventory from Wentworth Light Manufacturers, worth $10,430. The terms were 1/10, n/45. Date of the invoice was 21 June. June 23 Received the total amount owing from Longueville Electrics. June 24 Total Cash Sales for the week were $4,368.
- 20. WEEK 5 June 27 Glebe Lighting paid the entre balance of its account that was still outstanding June 28 Paid $8,400 of the amount owing to Wentworth Light Manufacturers and Cheque #135 was issued. June 29 A dividend of $19,600 was declared to the company shareholders. However, the dividend will not be paid until November 9, 2017. Paid sales staff wages, $6,930 and Cheque #136 was issued to meet the payment. June 30 Issued additional shares to the owners of the Company for cash, and $14,000 was received and banked. Total Cash Sales for the week were $2,604. INSTRUCTIONS 1) Enter the transactions on pages 8-9 into the appropriate Journal for the month of June 2017, Remember to post Journal transactions to the ledger accounts as specified in the “Account
- 21. System Information” section of the introduction. 2) Total all Special Journal columns and post to the appropriate ledger account at the end of the month. 3) Prepare the unadjusted Trial Balance as at 30 June on the worksheet provided. 4) Prepare the adjusting entries shown on page 10 in the General Journal and post to the relevant ledger accounts. The enter the adjustments in the relevant worksheet columns and prepare an adjusted Trial Balance. 5) A stocktake on 30 June 2017 indicates that the balance of closing inventory is $157,388. Use this information to complete the remaining columns of the worksheet. 6) Use the worksheet to prepare the Income Statement and Balance Sheet. 7) Complete the Schedule of Accounts Receivable and Schedule of Accounts Payable. Ensure the balances agree with the totals in the control accounts. 8) Prepare closing entries and post to the relevant general ledger accounts. 9) Complete the post-closing Trial Balance as at June 2017. ADJUSTING ENTRIES a) The computer equipment has a useful life of 10 years and estimated salvage value of $350. b) The new Store Shelving & Fittings were installed on 1 July, 2015. They have a useful life of 9 years and no salvage value. c) Twelve months of store rent was prepaid on 1 March, 2017. d) A count of store supplies indicates that $9,485 remain on hand at year end. e) A one-year insurance policy was purchased on 1 November
- 22. 2016 for $1,260. f) Interest on the ANZ Bank Loan is charged at 7% per annum and is paid annually on 1 August (the interest expense should be rounded off to the nearest dollar). g) The company has been informed that Vaucluse Lighting has been declared bankrupt and Edward's Electrical Goods has agreed to write of the amount owing as a bad debt. The company uses the direct write-of method to account for any bad debts in the books. h) A telephone bill for $714 for June was received on 4 July. The amount has not yet been recorded. The company records them as a utilities expense. i) Office Staff are paid once per month, $8,162. The Office Staff were last paid on the 15 June, 2017. j) Sales staff are paid fortnightly and work 7 days per week. The sales staff were last paid on the 29 June, 2017. k) The estimated Tax Payable for the year ended 30 June, 2017 is $19,600. This amount is to be paid on 30 September, 2017. 10 GENERAL JOURNAL Date Account Post. Ref. Debit Credit 2017
- 30. Debit Credit
- 42. CASH RECEIPTS JOURNAL Date Account Post. Ref. Cash at Bank (100) DR Sales Discounts (401) DR Sales (400) CR Accounts Receivable (101) CR Other CR
- 45. TOTAL $ $ $ $ $ 19 CASH PAYMENTS JOURNAL Date Account Chq. No. Post Ref. Other DR Accounts Payable (200) DR Purchases (500) DR Cash at Bank (100) CR Purchase Discounts (501) CR
- 55. TOTAL $ LEDGERS Accounts Receivable Subsidiary Ledger BELLEVUE HILL ELECTRICS 101-1 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 60. Accounts Payable Subsidiary Ledger PARRAMATTA ELECTRICAL ENGINEERING 200-1 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 4,830
- 61. WENTWORTH LIGHT MANUFACTURERS 200-2 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 12,236
- 62. General Ledger Cash at Bank 100 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 68,292
- 69. Store Shelving & Fittings 150 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 56,700
- 70. Accumulated Depreciation – Store Shelving & Fittings 151 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 72. Accumulated Depreciation - Equipment 161 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 9,450
- 73. Accounts Payable Control 200 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 17,066
- 85. Profit & Loss Summary 303 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 88. 3,451 Sales Returns & Allowances 402 Date Explanation Post.Ref. Debit Credit Balance 31-May
- 92. Purchase Returns & Allowances 502 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 1,127
- 94. Wages Expense – Sales Staff 601 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 107,569
- 95. Depreciation Expense – Store Shelving & Fittings 602 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 96. Depreciation Expense – Equipment 603 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 106. Salaries Expense – Office Staff 612 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance 84,518
- 107. Bad Debts Expense 613 Date Explanation Post.Ref. Debit Credit Balance 31-May Balance
- 108. WORKSHEET – 30 JUNE 2017 Unadjusted Trial Bal. Adjustments Adjusted Trial Bal. Income Statement Balance Sheet Account Debit Credit Debit Credit Debit Credit Debit Credit Debit
- 109. Credit Cash at Bank Accounts Receivable Control Store Supplies
- 110. Inventory Prepaid Store Rent (Paid 1 Mar. 2017) Prepaid Insurance (Paid 1 Nov. 2016)
- 111. Store Shelving & Fittings Accumulated Depreciation – Store Shelving & Fittings Equipment
- 112. Accumulated Depreciation - Equipment Accounts Payable Control Interest Payable
- 113. Utilities Payable Wages Payable Salaries Payable Tax Payable
- 114. Dividend Payable Bank Loan (due 1 June 2022) Share Capital
- 115. Retained Profits (1 July 2015) Dividends Declared Profit and Loss Summary
- 116. Sales Revenue 35 Sales Discounts Sales Returns and Allowances
- 117. Purchases Purchase Discounts Purchase Returns and Allowances
- 118. Freight-Out Wages Expense - Sales Staff Depreciation Expense - Store Shelving & Fittings Depreciation Expense - Equipment
- 119. Supplies Expense Rent Expense Insurance Expense
- 120. Advertising Expense Interest Expense Utilities Expense
- 121. Tax Expense Sundry Expenses Salaries Expense – Office Staff
- 123. FINANCIAL STATEMENTS Schedules of Subsidiary Ledgers Schedule of Accounts Receivable as at 30 June 2017 Acc. No. Account Amount ($)
- 124. TOTAL $ Schedule of Accounts Payable as at 30 June 2017 Acc. No. Account Amount ($) TOTAL $ 39 Income Statement for the year ending 30 June 2017 Gross Sales Less: Sales Returns
- 125. Net Sales
- 126. Cost of Goods Sold Gross Profit Other Revenue Expenses Selling Expenses
- 129. Profit Before Income Tax Income Tax Expense Profit After Income Tax Statement of Changes in Equity for the year ending 30 June 2017 Share Capital Retained Profits Total Equity Opening Balance as at 1 July 2016
- 130. Ending Balance as at 30 June 2017 Statement of Financial Position as at 30 June 2017 Current Assets
- 131. Total Current Assets Non-Current Assets
- 132. Total Non-Current Assets TOTAL ASSETS Current Liabilities
- 134. Non-Current Liabilities Total Non-Current Liabilities TOTAL LIABILITIES EQUITY
- 135. TOTAL EQUITY TOTAL LIABILITIES & EQUITY Post-closing Trial Balance As at 30 June 2017 Acc. No. Account Debit ($) Credit ($)
- 137. 46 WRITTEN COMPONENT
- 138. STUDENT DECLARATION FOR COMPLETION OF WORK Academic misconduct as defined in the "Guidelines on Ethical Scholarship, Academic Literacy and Academic Misconduct" is any activity or practice engaged in by a student that breaches explicit guidelines relating to the production of work for assessment, in a manner that compromises or defeats the purpose of that assessment. Students must not engage in academic misconduct. Penalties for academic misconduct vary according to seriousness of the case, and may include the requirement to do further work or repeat work; deduction of marks; the award of zero marks for the assessment; failure of one or more units; suspension from a course of study; exclusion from the University; non-conferral of a degree, diploma or other award to which the student would otherwise have been entitled. For further information on the rules and procedures in respect of appropriate academic conduct you should visit: http://www.teachingandlearning.uwa.edu.au/tl4/for_uwa_staf /policies/student_related_policies/academic_conduct Plagiarism is one example of academic misconduct 1. Plagiarism is taking someone else's thought, writing or invention and claiming it as your own. 2. All references to other work must be properly cited in the
- 139. text eg. (Smith 1996) and the e article must be fully described in a references section including author's name, date, title, book/journal, volume/ page numbers. The Faculty of Business has the following regulation on Plagiarism: "The Faculty will promote the highest levels of probity and honesty amongst students and will provide instruction on ethical conduct. By submitting assignments and other work for assessment, students acknowledge Faculty's duty to guard against plagiarism, including by electronic means such as Turnitin or Mydropbox. A lecturer may require students submitting written or electronic work to sign a Plagiarism Declaration Form indicating that the work is original.” No assignment will be accepted unless the following statement is signed and dated: "I certify that I possess a copy of the attached work submitted." "I certify that the attached assignment/report is my own work and that all material drawn from other sources has been fully acknowledged." “I acknowledge that by submitting my assignment with this generic cover page and not the automated version available to me that I will not receive an email receipt from the