Accounting Cycle
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MBA906_Assessment2_24T3_v2.docx
0 | P a g e
Accounting Cycle (15 Marks)
1.0 Financial Information
1.1 Chart of Accounts
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# |
Account Name |
# |
Account Name |
|
101 |
Cash at Bank |
301 |
Bill, Capital |
|
102 |
Accounts Receivable |
302 |
Bill, Drawings |
|
103 |
Office Supplies |
401 |
Service Revenue |
|
104 |
Prepaid Subscriptions |
501 |
Utilities Expense |
|
110 |
Office Furniture |
502 |
Wages Expense |
|
111 |
Accumulated Depreciation-Furniture |
503 |
Depreciation Expense-Furniture |
|
201 |
Accounts Payable |
504 |
Supplies Expense |
|
202 |
Unearned Service Revenue |
505 |
Subscriptions Expense |
|
204 |
Interest Payable |
506 |
Interest Expense |
|
211 |
Loan Payable |
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1.2 Financial Transactions
Financial Transactions during the year
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Date |
Transactions |
Amount |
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1/04/2023 |
Bill invested cash into his business |
$ |
|
1/04/2023 |
Borrowed money from Rabo Bank. Interest rate is 6% per annum. |
$ |
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1/04/2023 |
Purchased office furniture in cash. The furniture has a useful life of 5 years with no salvage value. The business uses a straight-line method |
$ |
|
15/04/2023 |
Purchased office supplies on account |
$ |
|
1/05/2023 |
Received 6 months bookkeeping service fee, and recorded the advanced payment on two balance sheet accounts |
$ |
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13/05/2023 |
Paid the bill received on 15/04/2023 |
$ |
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1/06/2023 |
Paid for 12-month subscription. Bill recorded the payment as a debit to Prepaid subscriptions and a credit to Cash. The subscription started from June 2023 |
$ |
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23/06/2023 |
Provided services on account |
$ |
|
30/06/2023 |
Paid wages to a short-term contract employee |
$ |
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30/06/2023 |
Received an invoice for utilities used |
$ |
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30/06/2023 |
Bill made withdrawal from business account |
$ |
Adjustment Transactions as at 30 June 2023
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Date |
Transactions |
|
30/06/2023 |
Depreciation Expense for office furniture |
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30/06/2023 |
During the period the business used one third of supplies |
|
30/06/2023 |
Adjustment of unearned service revenue |
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30/06/2023 |
Subscription fee expired |
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30/06/2023 |
The interest on loan for the month of June is not paid yet |
1 | P a g e
1.3 General Journal
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Date |
Accounts |
Debit |
Credit |
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1/04/2023 |
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Investment by the owner |
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1/04/2023 |
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Loan borrowed |
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1/04/2023 |
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Purchased office furniture in cash |
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15/04/2023 |
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Purchased supplies on account |
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1/05/2023 |
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Advanced Receipt of 6-month service |
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13/05/2023 |
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Payment of outstanding bill |
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1/06/2023 |
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Prepayment for 12 months subscription |
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23/06/2023 |
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Service Rendered on account |
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30/06/2023 |
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Wages expense paid |
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30/06/2023 |
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Utility expense incurred |
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30/06/2023 |
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Withdrawal by the owner |
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1.4 General Ledger
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Cash at Bank |
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1/04/2023 |
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1/04/2023 |
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1/04/2023 |
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13/05/2023 |
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1/05/2023 |
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1/06/2023 |
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30/06/2023 |
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30/06/2023 |
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EB |
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Accounts Receivable |
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23/06/2023 |
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EB |
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Office Supplies |
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15/04/2023 |
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EB |
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Prepaid Subscriptions |
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01/06/2023 |
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EB |
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Office Furniture |
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01/04/2023 |
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EB |
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Bill, Capital |
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1/04/2023 |
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EB |
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Bill, Drawings |
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30/06/2023 |
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EB |
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Accounts Payable |
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13/05/2023 |
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15/04/2023 |
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30/06/2023 |
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EB |
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Loan Payable |
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01/04/2023 |
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EB |
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Unearned Service Revenue |
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01/05/2023 |
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EB |
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Wages Expense |
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01/05/2023 |
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Utilities Expense |
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01/05/2023 |
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1.5 Worksheet
Bill’s Consulting Services Worksheet
for the year ended 30 June 2023
8 | P a g e
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Account Name |
Unadjusted Trial Balance |
Adjustments |
Adjusted Trial Balance |
Income statement |
Balance sheet |
|||||
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Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
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Cash at Bank |
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Accounts Receivable |
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Office Supplies |
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Prepaid Subscriptions |
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Office Furniture |
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Accum. Depreciation- Furniture |
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Accounts Payable |
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Unearned Service Revenue |
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Interest Payable |
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Loan Payable |
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Bill, Capital |
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Bill, Drawings |
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Service Revenue |
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Utilities Expense |
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Wages Expense |
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Depreciation Expense- Furniture |
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Supplies Expense |
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Subscriptions Expense |
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Interest Expense |
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Total |
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Profit for the period |
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1.6 Financial Statements
Bill’s Consulting Services
Income Statement
12 | P a g e
for the year ended 30 June 2023
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Income |
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Service Revenue |
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Total Income |
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Expenses |
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Utilities Expense |
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Wages Expense |
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Depreciation Expense-Furniture |
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Supplies Expense |
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Subscriptions Expense |
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Interest Expense |
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Total Expenses |
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Net Income before Tax |
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Alex, Capital- Beginning
Bill’s Consulting Services Statement of changes in Equity for the year ended 30 June 2023
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Add: Additional contribution |
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Add: Net Income (Loss) during the period |
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Less: Drawings |
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Increase or Decrease in Equity
Alex, Capital- Ending
Bill’s Consulting Services Statement of financial position As at 30 June 2023
ASSETS
|
Cash at Bank |
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Accounts Receivable |
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Office Supplies |
|
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Prepaid Subscriptions |
|
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Office Furniture |
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Accumulated Depreciation-Furniture |
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Total Assets |
|
LIABILITIES
|
Accounts Payable |
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Unearned Service Revenue |
|
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Interest Payable |
|
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Loan Payable |
|
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Total Liabilities |
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Total Assets - Total Liabilities |
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EQUITY
|
Alex, Capital |
|
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Total Equity |
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1.7 Theory questions (5 Marks)
a) What are the 5 fundamental principles of ethics and summarize in bullet point form? (Read APES 110 Code of Ethics and cite the relevant paragraph) (300 words)
b) Assume you are a Junior Accountant in a company, and you are asked by your Manager to deliberately change numbers in order to increase profits? Explain how you would deal with this considering the principles set out in APES 110. (200 words)
