BFA504 Accounting Systems And Processes

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13-04-2021

Question:

You are an accountant of GREENPLACE, a small business offering gardening and landscaping services. Before closing accounts for April 2018, you find three transactions that have not been recorded in the accounts as below:

April 28, purchased supplies on credit $1200
April 29, paid monthly office rent $3500
April 30, received payment from a customer $5600

After recording the above transactions, below are the company’s account balances at 30 April 2017:

Rent expense	$5,200	Accounts receivable	$35,500
Supplies expense	1,200	Cash	20,000
Long term Loan payable	45,000	Accumulated depreciation	25,200
Bartlett, Drawings	5,000	Accounts payable	25,800
Salary expense	18,600	Equipment	120,000
Salary payable	18,400	Advertising expense	7,500
Service revenue	65,000	Insurance expense	3,600
Supplies	4,500	Interest expense	3,880
Capital	29,780	Prepaid insurance	8,600
Depreciation expense	9,800	Unearned revenue	34,200

What is PALER Based on PALER, identify the type of account for each account listed above.
Provide journal entries for transactions that have not been recorded.
From the account listed above, prepare the trial balance.
What are temporary and permanent accounts From the account listed above, choose four permanent and four temporary accounts.
From the account listed above, choose two accounts with normal debit balances and two accounts with normal credit balances.
What are adjusting entries Why do we have to do adjusting entries Give five examples with journal entries.
Open T-accounts for all accounts listed above and post your examples of adjusting entries to the T-accounts. Provide your handwritten solution – scan or use your phone to copy and paste its image in your assignment. You can use a free scanning app such as Camscanner, OfficeLens, or Google Drive.
Using your T-accounts in the preceding question and Excel spreadsheet, prepare the ten column worksheet for the month ended 30 April. In the spreadsheet, you are required to have a data section separated from a report section. Use an IF function for Profit or Loss. Present your answers in both normal and formula views, showing columns and rows.
Using the spreadsheet, prepare three financial reports. Present your answers in both normal and formula views.
Describe the current ratio. Calculate the firm’s current ratio, what does it tell you.
Evaluate the firm’s debt ratio.

Use the video, reading resources in Interact2 and other resources on the internet that relate to the case to write a business report (about 600 words) addressing the issues below:

What is the case about
What are the five Fundamental Principles of Ethics in accounting Describe them.
In the case, which and how are codes of ethics violated

You are required to use the format of a business report, and provide at least one reference from the readings in Interact2 and two references from the accounting resources on the Internet.


	P	A	L	E	R
Sl.No.	Proprietorship	Assets	Liabilities	Expenses	Revenue

1	Bartlett, Drawings	Supplies	Long Term Loan Payable	Rent Expense	Service Revenue
2	Capital	Accounts Receivable	Salary Payable	Supplies Expense
3		Cash	Accumulated Depreciation	Salary Expense
4		Equipment	Accounts Payable	Depreciation Expense
5		Prepaid Insurance	Unearned Revenue	Advertisement Expense
6				Insurance Expense
7				Interest Expense

In the books of GREENPLACE						Trial Balance
Journal Entries						as on 30 April 2017
			Dr.	Cr.			Dr.	Cr.
Date	Particulars		Amount	Amount		Particulars	Amount	Amount

28-04-2017	Supplies A/c.	Dr.	$1,200			Rent Expense	$5,200
	To,	Accounts Payable A/c.		$1,200		Supplies Expense	$1,200
						Long Term Loan Payable		$45,000
29-04-2017	Rent Expense A/c.	Dr.	$3,500			Berlett, Drawings	$5,000
	To,	Cash A/c.		$3,500		Salary Expense	$18,600
						Salary Payable		$18,400
30-04-2017	Cash A/c.	Dr.	$5,600			Service Revenue		$65,000
	To,	Accounts Receivable A/c.		$5,600		Supplies	$4,500
						Capital		$29,780
						Depreciation Expense	$9,800
						Accounts Receivable	$35,500
						Cash	$20,000
						Accumulated Depreciation		$25,200
						Accounts Payable		$25,800
						Equipment	$1,20,000
						Advertising Expense	$7,500
						Insurance Expense	$3,600
						Interest Expense	$3,880
						Prepaid Insurance	$8,600
						Unearned Revenue		$34,200

						TOTAL	$2,43,380	$2,43,380

In the books of GREENPLACE
Adjusting Entries
			Dr.	Cr.
Date	Particulars		Amount	Amount

30-04-2017	Supplies Expense A/c.	Dr.	$2,500
	To,	Supplies A/c.		$2,500

30-04-2017	Insurance Expense A/c.	Dr.	$5,000
	To,	Prepaid Insurance A/c.		$5,000

30-04-2017	Unearned Revenue A/c.	Dr.	$20,000
	To,	Service Revenue A/c.		$20,000

30-04-2017	Depreciation Expense A/c.	Dr.	$9,800
	To,	Accumulated Depreciation A/c.		$9,800

30-04-2017	Salary Expense A/c.	Dr.	$2,000
	To,	Salary Payable A/c.		$2,000


Rent Expense A/c.				Cr.		Dr.	Long Term Loan Payable A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	5200	30-04-2017	By, Balance c/d	5200		30-04-2017	To, Balance c/d	45000	30-04-2017	By, Balance b/d	45000

	5200			5200				45000			45000

Supplies Expense A/c.				Cr.		Dr.	Salary Payable A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	1200	30-04-2017	By, Balance c/d	3700		30-04-2017	To, Balance c/d	20400	30-04-2017	By, Balance b/d	18400
To, Supplies A/c.	2500									By, Salary Expense A/c.	2000
	3700			3700				20400			20400

Bartlett, Drawings A/c.				Cr.		Dr.	Service Revenue A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	5000	30-04-2017	By, Balance c/d	5000		30-04-2017	To, Balance c/d	85000	30-04-2017	By, Balance b/d	65000
										By, Unearned Revenue A/c.	20000
	5000			5000				85000			85000

Salary Expense A/c.				Cr.		Dr.	Capital A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	18600	30-04-2017	By, Balance c/d	20600		30-04-2017	To, Balance c/d	29780	30-04-2017	By, Balance b/d	29780
To, Salary Payable A/c.	2000
	20600			20600				29780			29780

Supplies A/c.				Cr.		Dr.	Accumulated Depreciation A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	4500	30-04-2017	By, Supplies Expense A/c.	2500		30-04-2017	To, Balance c/d	35000	30-04-2017	By, Balance b/d	25200
			By, Balance c/d	2000						By, Depreciation Expense A/c.	9800
	4500			4500				35000			35000

Depreciation Expense A/c.				Cr.		Dr.	Accounts Payable A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	9800	30-04-2017	By, Balance c/d	19600		30-04-2017	To, Balance c/d	25800	30-04-2017	By, Balance b/d	25800
To, Accumulated Depreciation A/c.	9800
	19600			19600				25800			25800

Accounts Receivable A/c.				Cr.		Dr.	Unearned Revenue A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount		Date	Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	35500	30-04-2017	By, Balance c/d	35500		30-04-2017	To, Service Revenue A/c.	20000	30-04-2017	By, Balance b/d	34200
							To, Balance c/d	14200
	35500			35500				34200			34200

Cash A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	20000	30-04-2017	By, Balance c/d	20000

	20000			20000

Equipment A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	120000	30-04-2017	By, Balance c/d	120000

	120000			120000

Advertising Expense A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	7500	30-04-2017	By, Balance c/d	7500

	7500			7500

Insurance Expense A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	3600	30-04-2017	By, Balance c/d	8600
To, Prepaid Insurance A/c.	5000
	8600			8600

Interest Expense A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	3880	30-04-2017	By, Balance c/d	3880

	3880			3880

Prepaid Insurance A/c.				Cr.
Particulars	Amount	Date	Particulars	Amount

To, Balance b/d	8600	30-04-2017	By, Insurance Expense A/c.	5000
			By, Balance c/d	3600
	8600			8600


		REPORT SECTION:
		Adjustment Worksheet:
			Pre-Adjustment Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
Amount		Particulars	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit

$5,200		Rent Expense	$5,200		$5,000		$10,200		$10,200
$1,200		Supplies Expense	$1,200		$2,500		$3,700		$3,700
$45,000		Long Term Loan Payable		$45,000				$45,000				$45,000
$5,000		Berlett, Drawings	$5,000				$5,000				$5,000
$18,600		Salary Expense	$18,600		$2,000		$20,600		$20,600
$18,400		Salary Payable		$18,400		$2,000		$20,400				$20,400
$65,000		Service Revenue		$65,000		$20,000		$85,000		$85,000
$4,500		Supplies	$4,500			$2,500	$2,000				$2,000
$29,780		Capital		$29,780				$29,780				$29,780
$9,800		Depreciation Expense	$9,800		$9,800		$19,600		$19,600
$35,500		Accounts Receivable	$35,500				$35,500				$35,500
$20,000		Cash	$20,000				$20,000				$20,000
$25,200		Accumulated Depreciation		$25,200		$9,800		$35,000				$35,000
$25,800		Accounts Payable		$25,800				$25,800				$25,800
$1,20,000		Equipment	$1,20,000				$1,20,000				$1,20,000
$7,500		Advertising Expense	$7,500				$7,500		$7,500
$3,600		Insurance Expense	$3,600				$3,600		$3,600
$3,880		Interest Expense	$3,880				$3,880		$3,880
$8,600		Prepaid Insurance	$8,600			$5,000	$3,600				$3,600
$34,200		Unearned Revenue		$34,200	$20,000			$14,200				$14,200

		TOTAL	$2,43,380	$2,43,380	$39,300	$39,300	$2,55,180	$2,55,180	$69,080	$85,000	$1,86,100	$1,70,180
$2,500		Add:Profit							$15,920			$15,920
$5,000		GRAND TOTAL	$2,43,380	$2,43,380	$39,300	$39,300	$2,55,180	$2,55,180	$85,000	$85,000	$1,86,100	$1,86,100
$20,000

DATA SECTION:			REPORT SECTION:
			Adjustment Worksheet:
List of Accounts:				Pre-Adjustment Trial Balance		Adjustments		Adjusted Trial Balance		Income Statement		Balance Sheet
Particulars	Amount		Particulars	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit

Rent Expense	$5,200		Rent Expense	$5,200		$5,000		$10,200		$10,200
Supplies Expense	$1,200		Supplies Expense	$1,200		$2,500		$3,700		$3,700
Long Term Loan Payable	$45,000		Long Term Loan Payable		$45,000				$45,000				$45,000
Berlett, Drawings	$5,000		Berlett, Drawings	$5,000				$5,000				$5,000
Salary Expense	$18,600		Salary Expense	$18,600		$2,000		$20,600		$20,600
Salary Payable	$18,400		Salary Payable		$18,400		$2,000		$20,400				$20,400
Service Revenue	$65,000		Service Revenue		$65,000		$20,000		$85,000		$85,000
Supplies	$4,500		Supplies	$4,500			$2,500	$2,000				$2,000
Capital	$29,780		Capital		$29,780				$29,780				$29,780
Depreciation Expense	$9,800		Depreciation Expense	$9,800		$9,800		$19,600		$19,600
Accounts Receivable	$35,500		Accounts Receivable	$35,500				$35,500				$35,500
Cash	$20,000		Cash	$20,000				$20,000				$20,000
Accumulated Depreciation	$25,200		Accumulated Depreciation		$25,200		$9,800		$35,000				$35,000
Accounts Payable	$25,800		Accounts Payable		$25,800				$25,800				$25,800
Equipment	$1,20,000		Equipment	$1,20,000				$1,20,000				$1,20,000
Advertising Expense	$7,500		Advertising Expense	$7,500				$7,500		$7,500
Insurance Expense	$3,600		Insurance Expense	$3,600				$3,600		$3,600
Interest Expense	$3,880		Interest Expense	$3,880				$3,880		$3,880
Prepaid Insurance	$8,600		Prepaid Insurance	$8,600			$5,000	$3,600				$3,600
Unearned Revenue	$34,200		Unearned Revenue		$34,200	$20,000			$14,200				$14,200

Additional Information:			TOTAL	$2,43,380	$2,43,380	$39,300	$39,300	$2,55,180	$2,55,180	$69,080	$85,000	$1,86,100	$1,70,180
Supplies Consumed within the period	$2,500		Add:Profit							$15,920			$15,920
Prepaid insurance expired	$5,000		GRAND TOTAL	$2,43,380	$2,43,380	$39,300	$39,300	$2,55,180	$2,55,180	$85,000	$85,000	$1,86,100	$1,86,100
Unearned revenue earned	$20,000
Depreciation charged	$9,800

In the books of GREENPLACE			In the books of GREENPLACE			In the books of GREENPLACE
INCOME STATEMENT			STATEMENT OF CHANGE IN EQUITY			BALANCE SHEET
for the period ended 30 April,2017			for the period ended 30 April,2017			As on 30 April,2017

Particulars	Amount		Particulars	Amount		Particulars	Amount

Service Revenue	$85,000		Opening Balance of Capital	$29,780		CURRENT ASSETS:
			Add: Net Profit for the period	$15,920		Supplies	$2,000
TOTAL REVENUE	$85,000			$45,700		Accounts Receivable	$35,500
			Less: Berlett, Drawings	-$5,000		Prepaid Insurance	$3,600
Rent Expense	-$10,200					Cash	$20,000
Supplies Expense	-$3,700		Closing Balance of Capital	$40,700		Total Current Assets	$61,100
Salary Expense	-$20,600
Depreciation Expense	-$19,600					NON-CURRENT ASSETS:
Advertising Expense	-$7,500					Equipment	$1,20,000
Insurance Expense	-$3,600					Accumulated Depreciation	-$35,000
Interest Expense	-$3,880					Total Non-Current Assets	$85,000

TOTAL EXPENSES	-$69,080					TOTAL ASSETS	$1,46,100

NET PROFIT for the period	$15,920					CURRENT LIABILITIES:
						Salary Payable	$20,400
						Accounts Payable	$25,800
						Unearned Revenue	$14,200
						Total Current Liabilities	$60,400

						NON-CURRENT LIABILITIES:
						Long Term Loan Payable	$45,000
						Total Non-Current Liabilities	$45,000

						TOTAL LIABILITIES	$1,05,400

						Capital:
						Capital Balance	$40,700
						TOTAL CAPITAL	$40,700

						TOTAL LIABILITIES & CAPITAL	$1,46,100


In the books of GREENPLACE			In the books of GREENPLACE			In the books of GREENPLACE
INCOME STATEMENT			STATEMENT OF CHANGE IN EQUITY			BALANCE SHEET
for the period ended 30 April,2017			for the period ended 30 April,2017			As on 30 April,2017

Particulars	Amount		Particulars	Amount		Particulars	Amount

Service Revenue	$85,000		Opening Balance of Capital	$29,780		CURRENT ASSETS:
			Add: Net Profit for the period	$15,920		Supplies	$2,000
TOTAL REVENUE	$85,000			$45,700		Accounts Receivable	$35,500
			Less: Berlett, Drawings	-$5,000		Prepaid Insurance	$3,600
Rent Expense	-$10,200					Cash	$20,000
Supplies Expense	-$3,700		Closing Balance of Capital	$40,700		Total Current Assets	$61,100
Salary Expense	-$20,600
Depreciation Expense	-$19,600					NON-CURRENT ASSETS:
Advertising Expense	-$7,500					Equipment	$1,20,000
Insurance Expense	-$3,600					Accumulated Depreciation	-$35,000
Interest Expense	-$3,880					Total Non-Current Assets	$85,000

TOTAL EXPENSES	-$69,080					TOTAL ASSETS	$1,46,100

NET PROFIT for the period	$15,920					CURRENT LIABILITIES:
						Salary Payable	$20,400
						Accounts Payable	$25,800
						Unearned Revenue	$14,200
						Total Current Liabilities	$60,400

						NON-CURRENT LIABILITIES:
						Long Term Loan Payable	$45,000
						Total Non-Current Liabilities	$45,000

						TOTAL LIABILITIES	$1,05,400

						Capital:
						Capital Balance	$40,700
						TOTAL CAPITAL	$40,700

						TOTAL LIABILITIES & CAPITAL	$1,46,100



Particulars		Amount

Current Assets	A	61100
Current Liabilities	B	60400

Current Ratio	C=A/B	1.012



Particulars		Amount

Total Liabilities	A	105400
Total Assets	B	146100

Debt Ratio	C=A/B	0.721

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