Accounting principles to process transactions

Assignment Help Financial Accounting

Reference no: EM132584097 , Length: word count:2000

COMR2008 Principles of Accounting - Laureate International Universities

Learning Outcome 1: Explain the use of accounting information and identify ethical issues in accounting

Learning Outcome 2: Explain the accounting cycle and apply double entry accounting principles to process transactions

Instructions

Part A:
Part A is an assignment. You have to attempt questions and provide answers to all these on this provided document. Download this template provided, answer all questions, save it and upload on Blackboard under assessment 2 link as a word file only.

Part B:
Part B requires you to make a video of 5 minutes of yourself explaining how you achieved the provided answers. Do not read your answers in the video. You need to explain the logic and concept behind the answer you arrived at. This video can be made as on mobile device, PowerPoint (voice over), Loom, YouTube, Vimeo, Collaborative Ultra, Canva, Padlet, Prezi, iMovie, or any other. Here is a useful video on making a voice recorded PowerPoint presentation. It is highly recommended that you practice your presentation several times before you submit the final record. You need to submit this video on Blackboard under assessment 2 link.

Part A

Question 1 - Ethics in Accounting
As the accountant of Breathless Company, Sandra discovered a misstatement that will overstate net profit in this year's financial statements. These misleading financial statements will appear in the company's annual report which will be issued to banks, creditors and other stakeholders. Sandra communicated to her manager, Jerry McNabb, about this misstatement. Jerry said, "Hey! What they don't know won't hurt them so we don't need to fix and disclose this misstatement. Just don't make such a mistake again." She agreed with Jerry because she feared her job might be at stake, provided the current COVID-19 situation. She was also afraid that the upper-level management was actively considering cost reductions by laying off some staff, which might include her too.

Sandra came across certain financial information particularly related to costing that she believes will assist one of her friends, Adam, who is planning to supply goods Breathless Company. After all, Sandra is a good friend and considers helping Adam a virtue. She sees no harm in this because it will benefit the company and her friend. She provides the information to Adam without taking consent from the concerned authority in the company.

Sandra has been working in Breathless Company since 2015. She has been doing great in bookkeeping, lending, and financial planning. Considering her performance, she has recently been appointed as an internal auditor of Breathless Company, reporting directly to the audit committee.

Required:
Identify and describe the ethical issues present in the above scenario, and relate them to the facts of the case.

Question 2 - Recording Transactions

Carz Company has following transactions from the March 2020. Record them in General Journal. Include narrations. Carz Company is registered for GST.

Date Transactions
1/3 Repaired cars for $4000 plus GST. The customer paid full amount through EFTPOS.
5/3 Paid a one-year insurance in advance of $6000 including GST.
6/3 Purchased equipment and machinery for $19000 plus GST. Paid $10000 upfront with remaining due in six months.
12/6 Purchased tyres from Toyota on credit for $90 000 plus GST.
27/3 The owners withdrew $5 000 from the business for personal use.
28/3 Paid electricity bill of $2 500 including GST for the previous month.
29/3 A customer paid previously owing amount of $1 850.
30/3 Made a final settlement payment of $7 000 on a previously obtained bank loan.

Question 3 - Adjusting Entries

Johns Co. uses the following worksheet.

Johns Corporation Worksheet For the month ended 30 June 2019
	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance			Income Statement		Balance Sheet
Account	Debit	Credit	Debit	Credit	Debit		Credit	Debit	Credit	Debit	Credit
Cash at Bank	145,000				145000					145000
Notes Receivable	54,000				54000					54000
Accounts Receivable	12,000		1800		13800					13800
Prepaid Insurance	2,000			120	1880					1880
Office Supplies	1,200			220	980					980
GST Receivable	32,000				32000					32000
Land	130,000				130000					130000
Building	180,000				180000					180000
Accumulated Depreciation - Building				500			500				500
Office Equipment	8,000				8000					8000
Accumulated Depreciation - Office Equipment				180			180				180
Accounts Payable		10,700					10700				10700
Unearned Fees		2,000					2000				2000
GST Payable		1,500					1500				1500
Mortgage Payable		250,000					250000				250000
Johns Co - Capital		243,000					243000				243000
Johns Co - Drawings	2,000				2000					2000
Sales		75,000		1800			76800		76800
Salaries Expense	9,000		4100		13100			13100
Telephone Expense	5,000				5000			5000
Advertising Expense	2,000				2000			2000
	582,200	582,200
Office supply expense			220		220			220
Depreciation expense			180 500		680			680
Insurance expense			120		120			120
Salaries payable				4100			4100				4100

			6920	6920	588780		588780	21120	76800	567660	511980

						Net profit		55680			55680
								76800	76800	567660	567660

Required:

Complete the above worksheet considering the additional information available at the end of the month:

Office supplies on hand were worth $980.

Depreciation on office equipment was $180.

Prepaid insurance expired by $120.

Depreciation on building was $500.

Employees worked for the month had unpaid salaries of $4,100.

Revenue not received from services provided $1,800.

Reference no: EM132584097

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