Reference no: EM132605619

Business Decision Making Assignment

Part A

Handassa Engineering Company is a consulting company. It started the period with £ 37,000 cash, £500 in supplies, share capital of £ 19,500, and retained earnings of £ 18,000( these are the opening balances of these accounts and must appear on your T-Accounts). Handassa Engineering Company engaged in the following transactions in 2019:
Transactions during 2019:

1) On 1 January, purchased office equipment for £ 18,000.
2) On 1 March, paid £8,100 for an insurance policy that provides a 12 month coverage beginning immediately.
3) On 25 March, purchased £2,700 of supplies for cash.
4) On 27 March provided £58,500 of services for cash.
5) On 31 March paid £13,500 for salaries expense.
6) On 1 April, received £18,000 cash in advance for services that will be performed over the next 12 months.

Information for Adjusting Entries:
Dec.31 The depreciation of the office equipment is equal to £3,750. Dec.31 Recorded the insurance expense for the year (see 2 above).
Dec. 31 An inventory of supplies showed £ 375 of supplies on hand as of 31 December 2019. Dec.31 Adjusted records to recognise the services provided in the contract of April 1.
Dec.31 The company estimates that the accrued utilities expenses amount to £750.

Required:

a) Record the above events and adjusting entries for 2019 in general journal form.
b) Post the transactions to T-accounts and calculate the account balances.
c) Prepare a trial balance for the year ended 31 December 2019 2019.
d) Prepare an Income statement (P&L account) for the year ended 31 December 2019.
e) Prepare a statement in changes in stockholder´s equity.
f) Prepare a Statement of financial position as at 31 December 2019(SOFP).

Part b

(1) Explain what is corporate governance and why is accounting so well placed to support organisations and society in achieving long-term sustainability and prosperity- 250 words.

(2) Juhaina and Assma are two friends who are considering starting a fashion designer business together. They are unsure as to which business structure would be more appropriate for their business and they have approached you for advice. Write a Memo advising them on which business structure they should implement and why-250 words.