Reference no: EM132649954

HA1020 Accounting Principles and Practices Assignment - Holmes Institute, Australia

Purpose - This assignment is designed to assess your level of knowledge of the key topics covered in this unit.

Unit Learning Outcomes Assessed -

- Understand the logic and assumptions of accounting procedures;

- Record business transactions in the journals and ledgers that make up a business accounting system;

- Prepare financial statements; and

- Analyse and interpret financial statements.

Tutorial Questions -

Question 1 - Sandox Retail has the following unadjusted trial balance as at 30 June 2020 in the table:

Accounts	Debit ($)	Credit ($)
Cash	8,524
Accounts Receivable	7,000
Supplies	15,000
Prepaid Insurance	300
Insurance Expense	600
Equipment	27,000
Accumulated Depreciation		12,000
Other Assets	5,100
Wages Payable		1,500
Accounts Payable		7,500
Income Tax Payable		3,150
Share Capital (3000 shares outstanding all year)		16,000
Retained Profit		10,300
Sales Revenue		95,000
COGS	32,900
Wages Expense	18,000
Supplies Expense	25,680
Income Tax Expense	5,346
Total	145,450	145,450

Required -

a) Prepare an Income Statement for Sandox Retail for the financial year 2019-2020.

b) Prepare a Balance Sheet as of 30 June 2020.

c) Prepare the closing journals for Sandox Retail.

Question 2 - Beacon Limited had the following trial balance as at 1 January 2019, as shown in the table below:

Accounts	Debit ($)	Credit ($)
Cash	250,000
Accounts receivable	600,000
Inventory	730,000
Prepaid insurance	60,000
Prepaid rent	50,000
Equipment	1,500,000
Allowance for doubtful debts		20,000
Accumulated depreciation		500,000
Accounts payable		700,000
Revenue received in advance		120,000
Income tax payable		530,000
Loan		600,000
Share capital		400,000
Retained profits		320,000
	3,190,000	3,190,000

You are given the following additional information for the year ended 31 December 2019:

a) Bad debts of $14,380 were written off.

b) It was decided that allowance for doubtful debts should be 5 per cent of accounts receivable.

Required -

1) Prepare journal entries for these transactions.

2) State the balance of the following accounts via T-ledger for the year ended 31 December 2019:

a) Accounts receivable

b) Allowance for doubtful debts

Question 3 - The following information has been extracted from the records of Kakadu Ltd, which sells special camping tents. The company uses the perpetual inventory system to record stock. Its monthly reporting date is 31 May. Kakadu Ltd uses the FIFO Method.

Date	Transaction	Quantity	$ Unit Cost
1/05	Beginning balance	6	720
6/05	Purchases (850/unit)	4	600
16/05	Sold @1700/unit	8	?
17/05	Purchases	6	650
29/05	Sold @ 1500/unit	2	?
30/05	Sales Return from 29/03 Sales	1	?

Required -

a) Ignoring GST and narrations, create and complete the inventory stock record shown above for transactions during the month of May.

b) Calculate the cost of inventory on hand as at 31 May and the cost of sales as at 31 May.

Question 4 - Transactions and balances for Diana Wonder are provided below:

- 31 Jul 2020 Bank Statement balance $78,495.

- 31 Jul 2020 balance per Diana's records $77,370.

- Diana received a cash payment that she has not deposited $380.

- Diana issued a cheque payable to Michael Hill Enterprises that has not been presented to the bank $1,499.

- Bank charges for the month of July were $10.

- Interest on bank balance credited to Diana's account $16.

Required - Perform a bank reconciliation.

a) Reconcile Diana Wonder's month end cash balance as of 31 Jul 2020.

b) Based on your analysis, propose the adjusting entries (if any).

Question 5 - Greyhound Ltd purchased a new bus for $280,000. The company expects the bus to be used for trips between Sydney and Melbourne for 8 years, or 400,000 miles, with an estimated residual value of $40,000 at the end of that time. During the third (3rd) year, the bus was driven 60,000 miles.

Required - Calculate the depreciation expense for the 3rd year using each of the depreciation methods: a), b) and c) stated below. (Show ALL of your workings and calculations)

a) Straight-line

b) Diminishing balance at 20% p.a.

c) Units-of-activity

Question 6 - Safeway Inc. had the following comparative current assets and current liabilities, as shown below:

	31 Dec 2019	31 Dec 2018
Current Assets
Cash	$65,000	$25,000
Marketable securities	30,000	15,000
Accounts receivable	42,000	80,000
Inventory	120,000	90,000
Prepaid expenses	35,000	20,000
Total Current Assets	$292,000	$230,000
Current Liabilities
Accounts payable	$145,000	$130,000
Salaries payable	40,000	30,000
Income tax payable	20,000	15,000
Total Current liabilities	$205,000	$175,000

Additional Information - During 2019 net credit sales were $680,000 and the associated cost of goods sold was $365,000. Net cash provided by operating activities for 2019 was $142,000.

Required - Based on the comparative current assets and current liabilities of Safeway Inc., as shown above, compute the following ratios:

1. Current ratio for both 2018 and 2019.

2. Quick ratio for both 2018 and 2019.

3. Current cash debt coverage ratio for 2019.

4. Receivables turnover for 2019.

5. Inventory turnover for 2019.