University of South Australia - ACCT 1008Assignment 1 Feedback File

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QUESTION 1: General Journal, General Ledger, Trial Balance (42 marks) Part A (25 marks) Gail Donaldson is the sole proprietor of “SportEquip”, a store selling sporting equipment and clothing. G... ail has been operating SportEquip successfully for some years. She is a highly experienced sports administrator and has decided to expand her business into providing sports administration training programs to local sporting clubs. Required: Below is a list of transactions that took place during the month of May 2018. Record each of the following transactions (where required), using the blank General Journal provided on the following pages. IMPORTANT* Journals must be correctly formatted and must include a date and a narration (explanation) for each entry. Marks will be deducted if this instruction is not followed. May 1 May 3 | SportEquip paid the May insurance premium of $220 in cash. SportEquip purchased 20 Australian Sports Training Manuals for the new development program. The Manuals cost $25 each. The purchase was paid in cash. SportEquip delivered a full day training session to the Athelstone Football Club for $550. The club paid 20% in cash and agreed to pay the remaining balance within 30 days. SportEquip purchased a new laptop computer for $1,850 on credit, with payment due in full by the end of the month. Cleanway Cleaning Ltd cleaned the store and left an invoice for $130, with payment terms of 30 days. SportEquip paid sales staff wages of $1,100. SportEquip received the balance owing from the Athelstone Football Club for the transaction on May 5. Gail visited her doctor for treatment and paid $185 for the appointment using the business bank account. SportEquip paid the outstanding amount from the purchase of the laptop computer on May 12 May 5 May 12 May 14 May 19 May 27 May 29 May 31 Part B (13 marks) Required: The following journal entries in the books of Hawks Ltd for the month of August, 2018 have already been completed. Post the General Journals recorded below to the General Ledger Accounts provided on the following pages. Remember to foot (balance) each ledger account to determine the closing balance (refer to hints below). Part C (5 marks) Required: Post the updated General Ledger balances calculated in Part B to the Trial Balance below. Total both the debit and credit columns on completion. QUESTION 2: Accounting Assumptions (10 marks), Communication (6 Marks) Part 1 The Business Letter You work for the accounting firm that provides accounting services to SportEquip. Gail Donaldson has written to the Managing Partner of your accounting firm because she is confused about two of the transactions you have recorded for her (refer to question 1 Part A). Your managing partner has approached you and asked you to write a letter to Gail to explain the journal entries she has questioned – the details of which are shown below. Your letter must be a formal business letter, properly addressed, and professionally written in business style language. The letter should be no more than 300 - 400 words (maximum). Penalties may be applied if the word limit is exceeded. REQUIRED: On the following page, you are required write a letter in your own words to Gail Donaldson explaining certain information to support TWO of the journal entries you prepared in question 1 Part A. The two journal entries that you must explain in your letter to Gail Donaldson are referred to below. Journal entry 1 Gail is confused about the May 14 Transaction from Question 1 Part A (see below)*. With regard to the credit side of your Journal entry, you are required to explain in your letter why the account you credited (in your answer) meets the formal accounting definition of that accounting element**. (4 marks) [*Journal Entry 1- May 14 transaction from Part A: ‘Cleanway Cleaning Ltd cleaned the store and left an invoice for $130, with payment terms of 30 days.’ **NOTE: ‘Element’ means one of ‘Asset’, ‘Liability’, ‘Equity’ ‘Income’ or ‘Expense’] Journal Entry 2 Gail is also confused about the May 29 entry from Question 1 Part A. She believes it should be a business expense. Your letter must refer to your journal entry and you must: (a) identify which accounting assumption is relevant to your treatment of the transaction*, AND (b) in your own words, your letter must explain how you used this assumption when recording the transaction. (3 marks) [*Journal Entry 2 - May 29 transaction from Part A. ‘Gail visited her doctor for treatment and paid $185 for the appointment using the business bank account.’] The remaining 3 marks will be awarded for CAREFULLY using the following information and formatting requirements below.  Date your letter 15 December 2018  Gail Donaldson’s Title is The Proprietor, SportsEquip. Her address is 14 East Terrace Adelaide, 5001.  Your accounting firm’s details and address are: JSR Accounting Solutions Pty Ltd, 47 North Terrace, Adelaide, SA, 5000  A formal business letter format is required (though there are different ways of doing this and there will be some flexibility in marking). Your letter must however use an appropriate businesslike way to begin and end your letter, and you should set out your letter with subheadings to 11 separate each part of your letter as you address the criteria required. Included below are some suggested references that may help you in formatting your letter. You may use other Internet references if you wish. o https://www.youtube.com/watch?v=7xUTguLaaXI o https://www.wikihow.com/Write-a-Business-Letter  Marks will be allocated for your use of appropriate language, accounting terminology and reference in your letter to the journals in question 1 Part A. 12 JSR Accounting Solutions Pty Ltd 47 North Terrace, Adelaide, SA, 5000 15 December 2018 Ms. Gail Donaldson Proprietor of SportsEquip 14 East Terrace Adelaide, 5001. Dear Gail Donaldson, I glad to answer your question. I recorded the account payable on the credit side on May 14 because the account payable was credited when goods or service were purchased on credit terms or opposed to being purchased for cash. In the list of transactions, “Cleanway Cleaning Ltd cleaned the store and left an invoice for $130, with payment terms of 30 days” this sentence is recorded on May 14. The money has not been transferred yet on that day. According to the debit side always equal to the credit side, invoice for $130 should be put on the debit side due to it required pay the money to others and a hundred and thirty dollars in accounts payable should be recorded on the credit side on May 14. After that, the expense for Gail visited her doctor is not belong to business expense because Gail is a sole proprietor and she did not really need to distinguish personal expense and business expense. Moreover, accountant uses accounting entity assumption in this case. Accountant focus on the centre of the business rather than the owners because the assumption is to maintain the capital invested by the owners into the business. Therefore, some financial details need to be divided into business expense and personal consumption. Careful – this is the person you are writing to I hope my answer can help you figure it out. Highlighting shows grammatical issues Cordially, Boxin Zhang Accountant of JSR Accounting Solutions Pty Ltd 0412-345-678 QWE@icloud.com [Show More]

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