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Assignment ACT501 Accounting Principles Semester 1

Instructions:

If you create your worksheets in excel, please copy and paste them into MSWord.

Points are given for the quality of your calculation formats even if your final calculations are not correct.

Once you have completed the assignment, it needs to be lodged through the Assessments section of Learnline. Your assessments must be lodged using MSWord. PDF, Excel or paper copies will not be accepted.

Required:

  • Make sure your entire assignment can be readily printed on A-4 paper in portrait (preferred) or landscape format with appropriate page breaks. Do not have a portion of a “wide” worksheet expand beyond 1 page.
  • Make sure your name and student number are on every page of your submission.

Ethics:

This is not a group assignment; it is an individual assessment. Your solutions will likely be different from other students. If portions of your assignment are copied or very close to copying, all parties will be penalised for copying. Copying would be considered plagiarism and CDU has strict policies. It is up to you to keep your assessment confidential.

Q.1 (Marks: 40)

Molly Smith opened Molly’s Cleaning Services on June 1. During the month of June, the following transactions were completed:

June 1

Invested $15,000 cash in the business

June 2

Purchased a ute for $10,500 + GST, paying $3,500 cash & the balance on account.

June 4

Purchased cleaning supplies for $1,320 (inclusive of GST) on account

June 8

Paid $1,800 cash on one year insurance policy effective June 1.

(The amount includes GST of $60)

June 13

Billed customers $3,520 for cleaning services (incl. of GST). Terms 2/10 net 30

June 20

Paid $1,600 cash on amount owed on truck & $550 on amount owed on cleaning supplies.

June 21

Paid $1,850 cash for employee salaries.

June 23

Collected $1,960 cash from customers billed on June 13. These customers had availed of the sales discount.

June 27

Billed Customers $3,080 for cleaning services (incl. of GST). Terms 2/10 net 30.

June 30

Paid gas & oil for the truck $165 inclusive of GST.

June 30

Withdrew $850 for personal use.

Note: Molly’s Cleaning Services is registered for GST.

Required:

  1. Journalise the June transactions. (Marks: 8)
  2. Prepare a trial balance on a worksheet (Marks: 5.25)
  1. Enter the following adjustments on the work sheet & complete the worksheet.
    • Earned but unbilled revenue at June 30 was $950(excl. GST)
    • Depreciation on the truck for the month was $185
    • An inventory count showed $750 of the cleaning supplies were still on hand.
    • Accrued but unpaid employee wages were $550.
    • One month’s insurance expired.

(Marks: 11.25)

  1. Prepare the income statement for the month of June.

(Marks: 2.5)

  1. Journalise closing entries & complete the closing process.

(Marks: 3.0)

  1. Prepare T accounts for Cash, Service Revenue & GST Clearing. Include closing entries wherever appropriate.

(Marks: 7.25)

  1. Prepare a post-closing trial balance as at 30 June.

(Marks: 2.75)

(Please show all calculations clearly)

Q.2 (Total Marks: 25)

Simisa Inc. is a retailer operating in Devonshire. Simisa uses perpetual inventory method. Assume that all transactions are cash transactions. You are provided with the following information for Simisa Inc. for the month of March 2016.

Date

Description

Qty

Unit cost or selling price

Mar 1

Beginning Inventory

50

$12

Mar 5

Purchase

100

14

Mar8

Sale

80

25

Mar 10

Sales Return

10

25

Mar 15

Purchase

30

18

Mar 16

Purchase Return

5

18

Mar 20

Sale

90

25

Mar 25

Purchase

10

20

Required:

  1. a) For each of the following inventory costing methods, prepare the perpetual inventory record to calculate i) cost of goods sold, ii) ending inventory & iii) gross profit.

1) LIFO 2) FIFO 3) Average cost

(Marks :20)

  1. b) Compare & explain the results for the three methods in your own words.

(Marks :5)

(For the purposes of the question, please ignore GST)

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