Reference no: EM133506845

Accounting Principles and Practices

Assessment Task 1: A. Examinable Topics
• Topic 2 Business transaction analysis
• Topic 3 Adjustment process
• Topic 4 Completing the cycle
B. Relevant subject intended learning outcomes (SILOs):
1. Justify the purpose of accounting, and its processes and systems, within the Australian regulatory environment.
3. Critically evaluate financial performance to inform decision making using relevant information.
4. Exercise professional judgement to solve accounting problems from ethical, social, and regulatory perspectives.

C. Relevant professional accounting employability skills (Professional accounting accreditation guidelines)
• Technical competence area (TCA)
TCA 1 Accounting Systems and Processes
TCA 10 Information and Communication Technology
• Professional competence area (PCA)
o Intellectual Skills
o Interpersonal and Communication Skills
o Personal Skills
o Ethical Principles, Professional Values and Integrity

Assessment Questions

Questions 1-4 are based on the following information.

Bright Sunny recently opened her own floral shop, which she operates as a sole proprietorship. The name of the new entity is Sunny. Sunny experienced the following events during the organising phase of the new business and its first month of operation, July 2023. Some of the events were personal. Others were business transactions.

July 1        Received $10,000 capital contribution from the owner Sunny.

Borrowed $3,000 cash from the bank for 12 month-loan, 6% interest rate per year, payable at end of each month.

4                Paid $1,200 cash for a 12-month insurance policy. The policy begins 1 July.

8                Paid electricity and gas expense of $800.

15              Purchased a fridge for $10,000 ($5,000 on account, and the remainder $5,000 on cash).

18              Delivered a floral service for a client's engagement party on account, $4,000.

20              Paid $5,000 for the fridge purchased on 15 July.

22              Collected $1,000 in advance for a client's birthday party service to be performed later.

25                            Delivered floral service for a client's anniversary event on credit $1,000.

26                            Sunny withdrew $1000 cash from the business for a personal holiday in Bali.

27                            Purchased floral supplies for $1000 on account.

28                            Paid $1,000 employee salaries.

30              Paid interest expense for the bank loan for April.

On 30 July, the following data were yet to be adjusted to Sunny's account.

a.        Accrued salaries expense, $500.

b.        Depreciation expense $200 was recorded on the fridge.

c.        Prepaid insurance for July has expired.

d.        Floral supplies on hand, $200.

e.        Unearned revenue earned during the month, $400.

f.         Accrued service revenue, $1300.

Question 1 Analyse the Sunny's transactions and use Excel to record each transaction in the journal using the following chart of accounts and post the transactions into the T-accounts. Narrations aren't required.

Cash, Sunny-Drawings, Accounts receivable, Equipment, Floral supplies, Service revenue, Prepaid insurance, Salaries expense, Insurance expense, Accounts payable, Interest expense, Interest payable, Loan payable, Unearned revenue, Supplies expense, Sunny - Capital, Electricity and gas expense.

Question 2. Use Excel to prepare an unadjusted trial balance and an adjusted trial balance as at 30 July 2023.

Question 3. Use Excel to prepare Sunny's financial statement (income statement, changes in equity, and balance sheet) for the month ended 30 July 2023.