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BSBFIA401 Preparation of Financial Reports Assessment Answer

BSBFIA401 Prepare financial reports

Assessment Information

The assessment tasks for BSBFIA401 Prepare financial reports are included in this Student Assessment Tasks booklet and outlined in the assessment plan below. 

To be assessed as competent for this unit, you must complete all of the assessment tasks satisfactorily.  

Assessment Task 1: Written Questions

Task summary 

This is an open book test, to be completed in the classroom.

A time limit of 1.5 hours to answer the questions is provided.

You need to answer all of the written questions correctly.

Your answers must be word processed and sent to the assessor as an email attachment. 

Required

  • Access to textbooks/other learning materials
  • Computer and Microsoft Office
  • Access to the internet

Timing

Your assessor will advise you of the due date of this assessment.

Submit

  • Answers to all questions 

Assessment criteria

All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily. 

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task. 

If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s)will be arranged at a later time and date. 

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly, or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Written answer question guidance

The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected. 

Note that the following guidance is the minimum level of response required. 

Analyse – when a question asks you to analyse something, you should do so in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long. 

Compare – when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long.

Contrast – when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long.

Discuss– when a question asks you to discuss something, you are required to point out important issues or features, and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long.

Describe – when a question asks you to describe something, you should state the most noticeable qualities or features.Generally, you are expected to write a response two or three sentences long.

Evaluate – when a question asks you to evaluate something, you should put forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long.

Examine – when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long.

Explain – when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long.

Identify – when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long.

List – when a question asks you to list something, this means that you are asked to briefly state information in a list format. 

Outline – when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long.

Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long.

Assessment Task 1 Instructions

Provide answers to all of the questions below: 

  1. Explain the basic principles of double entry bookkeeping
  2. Explain the three golden rules of accounting and how they apply to double entry accounting?
  3. Explain the purpose of a general journal in accounting and give at least two examples of transactions that may be recorded in this journal. 
  4. Explain the purpose of a general ledger in accounting and give at least two examples of transactions that may be recorded in this journal. 
  5. Describe what is meant by “Fair Value” under AASB 116.
  6. When working as an accountant you will spend many hours seated at your desk and at the computer, possibly doing lots of data entry. List three OHS issues you might need to consider, ensuring you are working safely and are not at risk of accident, injury or illness.
  7. Research the Internet and find out how the Privacy Act 1988 will be changed in regard to storage of client data on cloud servers. What would an accounting firm need to do if it stores client data on an online/cloud accounting system?
  8. Review the APES 110 Code of Ethics for Professional Accountants on the Internet. Explain what a Member of Business should do if they are not satisfied that the financial statements of an employing organisation are presented in line with Australian Accounting Standards.
  9. Review the APES 110 Code of Ethics for Professional Accountants on the Internet. Explain how threats to compliance with the fundamental principles occur.
  10. Explain the Australian Securities & Investments Commission’s (ASIC’s) role in approving codes of practice for the financial services sector. List their criteria for approval.
  11. Explain whether financial services industry associations have to seek approval from ASIC regarding their codes of practice. Give examples of at least two financial services industry codes of practice. 
  12. List four types of laws that ASIC administers.
  13. Explain two posting methods used in computerised accounting systems. 
  14. You need to prepare end of month financial reports. How would you make sure you have all the data you need?
  15. Assume that you have been provided with the data for the end of financial month report. However, you have found some errors. What should you do in this situation and whom would you speak to?
  16. Explain the difference between balance day adjustments required for accruals and balance day adjustments required for prepayments. Give an example of each.
  17. Outline the reasons why an adjustment for depreciation expense is required at the end of each reporting period.
  18. Distinguish between an allocation approach and a valuation approach to depreciation according to AASB1021 and AAS4.
  19. Explain why it is important for estimates of the useful lives and expected residual values of depreciable non-current assets to be reviewed annually.

Assessment Task 2: Asset register project

Task summary 

For this assessment task you are required to prepare journal entries according to standard practice to record the purchase of assets, depreciation expense, and accumulated depreciation.

This assessment is to be completed in the simulated work environment in the RTO.

Required

  • Access to textbooks/other learning materials
  • Computer with Microsoft Office and internet access
  • Australian Accounting and Auditing Standards (either online or hard copy)
  • Financial Policy and Procedures
  • Asset Register Worksheet 

Timing

Your assessor will advise you of the due date of these submissions.

submit draft email to assessor

  • Draft email with Asset Register Worksheet attached

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task. 

If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date. 

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Assessment Task 2 Instructions

Carefully read the following: 

Andrew, the owner of Andrew’s Slabs, purchased a bench planer (Asset No. 346) from Mullum Machinery on 1st July 2016 that cost $18,000. It is expected to produce 5,000 items during its life in the workshop. At the end of its working life, its scrap value will be $1,000.

The machine has been operating for two years. Its production in each of those years has been 800 and 1000 units respectively. It is being depreciated on the units of production method. Balance day is 30 June each year.

On the 1st of July 2016, Andrew also purchased a standing drill (Asset No. 348) from Danny’s Drills. It cost $5,000 and will be used daily in the Workshop for a variety of purposes. The equipment has a useful life of 4 years and a residual value of $800. The straight-line deprecation method is used for this asset.

Complete the following activities in the Asset Register Worksheet:

Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries .

  1. Prepare journal entries according to standard practice to record the purchase of assets, depreciation expense and accumulated depreciation for the years ended 30 June 2016 and 2017. Show your workings for the depreciation calculation. 
  2. Prepare asset registers for the two items. 
  3. Prepare the correcting journal entries for the following:
  • Sold goods on credit to Lennox Furniture for $3,300 (including GST of $300) and incorrectly posted the item from the Credit Sales Journal by debiting Kingscliff  Kitchens.
  • Timber worth $880 (including GST) purchased on credit from Shady Timber Mill was incorrectly debited to Purchases. 
  • A cheque for $1,210 received for a kitchen bench slab was incorrectly posted from the cash receipts journal as a credit to the Sales account.
  • The bank column of the cash receipts journal was over added by $30, but the individual receipts were correctly entered and posted.

4. Calculate the following, taking into consideration the relevant procedures set out in the company’s Financial Policy and Procedures:

At the end of March, there is an overdue debt of $550 (including GST) that has been outstanding for 92 days. The amount is owed by Domestic Bliss for furniture renovation. 

The debt was transferred to a debt collection agency, but the debt was not paid. 

Record these transactions in the table provided in the Worksheet.

Show the general ledger entries you would make to record this bad debt.

At the end of June, there is a debt of $990 that has been owed for 65 days. The amount is owed by Tables and Chairs. How would you show this on the end of year reports?

5. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment.

Attach your Asset Register Worksheet to the email

Assessment Task 3: Depreciation project

Task summary 

For this assessment taskyou are required to preparea number of journal and ledger entries in response to the purchase, depreciation, and eventual sale of a fixed asset.

This assessment is to be completed in the simulated work enviDronment in the RTO.

Required

  • Access to textbooks/other learning materials
  • Computer with Microsoft Office and internet access
  • Australian Accounting and Auditing Standards (either online or hard copy)
  • Depreciation Worksheet
  • Financial Policy and Procedures

Timing

Your assessor will advise you of the due date of these submissions.

Submit draft email to assessor

  • raft email with Depreciation Worksheet attached.

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed,you will be asked to complete further assessment to demonstrate competence.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task. 

If any parts of the task are not satisfactorily completed,the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date. 

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Assessment Task 3 Instructions

Carefully read the following: 

Andrew’s Slabs bought a delivery  truck on 1/7/2016. It cost $33,000 (including GST), and it was decided to depreciate it at 30%.

At the end of the financial year, on 30/06/2017, the balance of the accumulated depreciation of the truck was $15,300.

On 31/03/2018 Andrew traded it in on a new delivery truck. He received $8,800 for the trade in, and he paid the balance, $44,000, in cash. All figures included GST.

Andrew’s Slabs uses the diminishing balance method.

Complete the following activities:

Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries

  1. Create a depreciation Worksheet for 2017 and 2018. Show your calculations
  2. Write a General Journal entry on 30 June 2016 for depreciation.
  3. Write Ledger accounts for Motor Vehicle, Accumulated Depreciation of Motor Vehicle and Depreciation Expense from 1/7/2016 to 30/6/2018
  4. Create an Income Statement and Balance Sheet extracts for the year ended 30 June 2018, showing the Depreciation Expense and the Motor Vehicle
  5. Write the journal entries to record the disposal of the old delivery truck on 31 March 2018, including calculation of gain or loss. Show your calculations.
  6. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment. 

Attach your Depreciation Worksheet to the email.

Assessment Task 4: Balance day project

Task summary 

For this assessment task you are required to prepare several General Journal entries for balance day adjustments and participate in a meeting to discuss these. You will then be asked to generate an adjusted Trial Balance, a Profit & Loss Statement, and a Balance Sheet.

This assessment is to be completed in the simulated work environment in the RTO.

Required

  • Access to textbooks/other learning materials
  • Computer with Microsoft Office and internet access
  • Meeting space
  • Role play participant (assessor)
  • Australian Accounting and Auditing Standards (either online or hard copy)
  • Financial Policy and Procedures

Timing

Your assessor will advise you of the due date of these submission

Submit draft email to assessor

  • Draft email with Balance Day General Journal attached
  • Draft  email with Balance Day Workbook attached

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task. 

If any parts of the task are not satisfactorily completed,the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date. 

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Assessment Task 4 Instructions

Carefully read the following: 

The trial balance for Andrew’s Slabs as at 30 June 2017 was:

Trial Balance
Details
Debit $
Credit $
Cash at Bank
10,700

Accounts receivable
52,000

Inventory
20,000

Equipment
45,000

Accumulated depreciation on equipment

10,000
Vehicles
50,000

Accumulated depreciation motor vehicles

6,250
Land
27,500

Accounts payable

25,000
Loan

85,000
Capital

181,430
Sales revenue

120,000
Interest revenue

2,000
Cost of goods sold
86,250

Salaries expense
30,000

Rates expense
1,500

Stationery expense
800

Advertising expense
1,900

Interest expense
300

Motor Vehicle expense
780

Repairs Expense
2,500

Insurance Expense
450

Total
329,680
329,680

Complete the following activities:

Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries

  1. Record the following balance day adjustments in the general journal below. Show your workings.
    • Depreciation of equipment 10% using the straight-line method
    • Depreciation of vehicles 12.5% using the diminishing balance method
    • Rates paid in advance $600
    • Salaries owing $3,500
    • Interest revenue earned but not received $1,300
    • Create an allowance for doubtful debts equal to 5% of accounts receivable.
    • Physical stocktake determined inventory at end 30 June 2017 was $18,800
  2. Draft  an email to your assessor.
    The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
    It should introduce and summarise the contents of the attachment and ask for a meeting to discuss these. 
    Your assessor will answer the email with a date and time for a meeting to discuss the entries.
    Attach your general journal to the email.
  3. Meet with Andrew (your assessor).

The objective of the meeting is to discuss, and update where necessary, the journal entries. 

At the meeting you should carefully go through the journal entries, explaining each entry clearly and using appropriate industry terminology. 

During the meeting, demonstrate effective communication skills including:

  • Speaking clearly and concisely 
  • Using non-verbal communication to assist with understanding 
  • Asking questions to identify required information 
  • Responding to questions as required 
  • Using active listening techniques to confirm understanding 

4..Create an Excel Workbook.

After the meeting, prepare each of the following as a separate Worksheet:

  • Adjusted trial balance at 30 June 2017.
  • Profit and loss statement for the year ending 30 June 2017
  • Balance sheet as at 30 June 2017.Save the Workbook as Balance Day.

5. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.


Answer

Assessment Task 1: Written Questions

Written answer question guidance

The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected. 

Note that the following guidance is the minimum level of response required. 

Analyse – when a question asks you to analyse something, you should do so in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long. 

Compare – when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long.

Contrast – when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long.

Discuss– when a question asks you to discuss something, you are required to point out important issues or features, and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long.

Describe – when a question asks you to describe something, you should state the most noticeable qualities or features. Generally, you are expected to write a response two or three sentences long.

Evaluate – when a question asks you to evaluate something, you should put forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long.

Examine – when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long.

Explain – when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long.

Identify – when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long.

List – when a question asks you to list something, this means that you are asked to briefly state information in a list format. 

Outline – when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long.

Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long.

Assessment Task 1 Instructions

Provide answers to all of the questions below: 

1. Explain the basic principles of double entry bookkeeping

Answer 

The basic principle of the double entry bookkeeping system is that all the debit transitions off the company will also be recorded on the credit site for the equal amount of money. 

If the one account is debited then the second amount of transition will be credited.

The self-sufficiency and reliability is set in the recording of the accounts. 

2. Explain the three golden rules of accounting and how they apply to double entry accounting?

Answer 

The main three golden rules of the accounting would be considered as 

All the transactions which is considered as comes in will be debit and all goes out will be credit

All the expenses will be debited and all the income will be credited

All the receivers will be debit and all the amount given will be credited

These accounting rules are applied in the double entry accounting system with a view to strengthen the accounting program and sets the debit and credit at both sides.

3. Explain the purpose of a general journal in accounting and give at least two examples of transactions that may be recorded in this journal. 

Answer 

The main purpose of general journal in accounting is that all the transactions will be having the two sides effect and recorded transactions will be recorded both sides to keep the sum equal of both sides. 

Payment made to Buyer will be recorded at the buyer side and cash will be credited to reduce the cash assets from balance sheet.

Assets purchased will be recorded as assets account debit and the same amount will be credited in the cash transactions. 

4. Explain the purpose of a general ledger in accounting and give at least two examples of transactions that may be recorded in this journal. 

Answer 

It is analysed that the accounting information which is required to be recorded in the financial statements are taken from the journal ledger. It works as separate invoices of database to record the data in the books of account. 

For instance,

Purchase book will be used to compute the cost of goods sold

The cash book will be used to record the cash opening and closing the cash in the books of accounts. 

5. Describe what is meant by “Fair Value” under AASB 116.

The fair value is recorded as total expected amount which will be received by the company from the particular assets if sold in the market. However, it will be lower than the market value or recorded book value of the assets. However, it helps in keeping the transiency and true and fair value of the assets data. 

6. When working as an accountant you will spend many hours seated at your desk and at the computer, possibly doing lots of data entry. List three OHS issues you might need to consider, ensuring you are working safely and are not at risk of accident, injury or illness.

Answer 

There are several things which might impact by human body and health while working as accountant. However, following things I need to take into account to overcome this issues

Keeping the desk dust free and clear

Using the hand wash foam to give away all the germs

Keeping the first add box in the office to take care of minor health issues. 

7. Research the Internet and find out how the Privacy Act 1988 will be changed in regard to storage of client data on cloud servers. What would an accounting firm need to do if it stores client data on an online/cloud accounting system?

Answer

Accountant is the person who takes care or record the financial data in the books of accounts. However, in order to keep the transiency on the online accounting system, he could use credential to kept the data safe and also align the one link with other which would be helpful to strengthen the overall outcomes. 

8. Review the APES 110 Code of Ethics for Professional Accountants on the Internet. Explain what a Member of Business should do if they are not satisfied that the financial statements of an employing organisation are presented in line with Australian Accounting Standards.

Answer

Being the member of the organisation, if I am not satisfied with the given financial statements, then I could raise the point in the general meeting and ask for the verification of data with the invoices and general ledger. In addition to this, I could also use the help of the auditors to take into account the transparency and recorded data. 

9. Review the APES 110 Code of Ethics for Professional Accountants on the Internet. Explain how threats to compliance with the fundamental principles occur.

The APES 110 Code of Ethics for Professional Accountants requires that accountant does not have to showcase his names and any personal details while the financial statement and accounts are posted online on the official webcast of the company. However, this could be the one of the threat to the transparency or compliance of the data true and fair view of the books of accounts. 

10. Explain the Australian Securities & Investments Commission’s (ASIC’s) role in approving codes of practice for the financial services sector. List their criteria for approval.

This Australian securities investment commission has role to monitor, enforcement and sanction of the policies and rules. 

It covers the Ares of finance and business compliance policies.  The Australian securities investment will comply with the set code of conduct and first take the approval from the relevant bodies and strengthen data compliance policies.

11. Explain whether financial services industry associations have to seek approval from ASIC regarding their codes of practice. Give examples of at least two financial services industry codes of practice. 

Answer 

The financial service industry needs to take approval from the ASIC set the code of conducts and drafting policy in the business. Following two financial service industry code of practice would be as below.

Setting the transiency in the recorded framework

Harmonisation in the domestic and international reporting framework. 

12. List four types of laws that ASIC administers.

There are several types of law that ASIC administers governs 

The corporate governance Law

Employment administration law

Corporation compliance programs

Audit Securitas program. 

13. Explain two posting methods used in computerised accounting systems. 

Answer 

There are only two posting methods which are used in the computerised accounting system 

Real Time – It records the data when the actual time during to the set acts when it occurs to the business. 

Batch pasting- IT records the financial data or keeps the accounts of the data in multiple areas for the back- up. 

14. You need to prepare end of month financial reports. How would you make sure you have all the data you need?

Answer 

In order to strengthen the recording framework of the month, I will first assess the operating cycle then the cash inflow and outflow from the business in the given month will be evaluated. In addition to this, credit sales and purchase will also be assessed.

15. Assume that you have been provided with the data for the end of financial month report. However, you have found some errors. What should you do in this situation and whom would you speak to?

Answer

If in case, If I have found any errors in the recorded data, then I will pass the rectification entries to rectify the mistake in the recorded data. 

16. Explain the difference between balance day adjustments required for accruals and balance day adjustments required for prepayments. Give an example of each.

This adjustment is recorded at the end of the reporting period. It is made to certain the accounts which correctly show the right health of the business. However, entries for the same is given


Date 
Particular 
Debit
Credit
1-Jan
Prepaid Expenses

125.00

Advertising
125.00


17. Outline the reasons why an adjustment for depreciation expense is required at the end of each reporting period.

Answer 

This is required to keep the true and fair value of the recorded assets in the books of accounts. The rapacity expenses is charged from the profit and loss and also reduced from the recorded assets to keep the value true and fair. 

18. Distinguish between an allocation approach and a valuation approach to depreciation according to AASB1021 and AAS4.

Answer 

As per the given AASB, it is evaluated that the depreciation is allocated to the particular assets and not used under the valuation approach. As the depreciation is the charges on the assets which are allocated accordingly with the set rate from the given assets. 

9. Explain why it is important for estimates of the useful lives and expected residual values of depreciable non-current assets to be reviewed annually.

Answer 

The main reason of estimation of the residual values of the assets is based on the cash values or evaluating the right value of the net present value of the undertaken project. this shows the right cash inflows and outflow from the initial investment made in the business. 

tions



Carefully read the following: 



Andrew, the owner of Andrew’s Slabs, purchased a bench planer (Asset No. 346) from Mullum Machinery on 1st July 2016 that cost $18,000. It is expected to produce 5,000 items during its life in the workshop. At the end of its working life, its scrap value will be $1,000.

The machine has been operating for two years. Its production in each of those years has been 800 and 1000 units respectively. It is being depreciated on the units of production method. Balance day is 30 June each year.


On the 1st of July 2016, Andrew also purchased a standing drill (Asset No. 348) from Danny’s Drills. It cost $5,000 and will be used daily in the Workshop for a variety of purposes. The equipment has a useful life of 4 years and a residual value of $800. The straight-line deprecation method is used for this asset.



Complete the following activities in the Asset Register Worksheet:


Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries .

1. Prepare journal entries according to standard practice to record the purchase of assets, depreciation expense and accumulated depreciation for the years ended 30 June 2016 and 2017. Show your workings for the depreciation calculation. 

2. Prepare asset registers for the two items. 

  1. Prepare the correcting journal entries for the following:
  2. Sold goods on credit to Lennox Furniture for $3,300 (including GST of $300) and incorrectly posted the item from the Credit Sales Journal by debiting Kingscliff  Kitchens.
  3. Timber worth $880 (including GST) purchased on credit from Shady Timber Mill was incorrectly debited to Purchases. 
  4. A cheque for $1,210 received for a kitchen bench slab was incorrectly posted from the cash receipts journal as a credit to the Sales account.
  5. The bank column of the cash receipts journal was over added by $30, but the individual receipts were correctly entered and posted.

3. Calculate the following, taking into consideration the relevant procedures set out in the company’s Financial Policy and Procedures:

At the end of March, there is an overdue debt of $550 (including GST) that has been outstanding for 92 days. The amount is owed by Domestic Bliss for furniture renovation. 

The debt was transferred to a debt collection agency, but the debt was not paid. 

Record these transactions in the table provided in the Worksheet.

Show the general ledger entries you would make to record this bad debt.

At the end of June, there is a debt of $990 that has been owed for 65 days. The amount is owed by Tables and Chairs. How would you show this on the end of year reports?

4. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment. 

Attach your Asset Register Worksheet to the email.

Assessment Task 3: Depreciation project

Task summary 

For this assessment task you are required to prepare number of journal and ledger entries in response to the purchase, depreciation, and eventual sale of a fixed asset.

This assessment is to be completed in the simulated work environment in the RTO.

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Assessment Task 3 Instructions

Carefully read the following: 

Andrew’s Slabs bought a delivery  truck on 1/7/2016. It cost $33,000 (including GST), and it was decided to depreciate it at 30%.

At the end of the financial year, on 30/06/2017, the balance of the accumulated depreciation of the truck was $15,300.

On 31/03/2018 Andrew traded it in on a new delivery truck. He received $8,800 for the trade in, and he paid the balance, $44,000, in cash. All figures included GST.

Andrew’s Slabs uses the diminishing balance method.

Complete the following activities:

Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries

  1. Create a depreciation Worksheet for 2017 and 2018. Show your calculations.
  2. Write a General Journal entry on 30 June 2016 for depreciation.
  3. Write Ledger accounts for Motor Vehicle, Accumulated Depreciation of Motor Vehicle and Depreciation Expense from 1/7/2016 to 30/6/2018.
  4. Create an Income Statement and Balance Sheet extracts for the year ended 30 June 2018, showing the Depreciation Expense and the Motor Vehicle
  5. Write the journal entries to record the disposal of the old delivery truck on 31 March 2018, including calculation of gain or loss. Show your calculations.
  6. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment. 

Attach your Depreciation Worksheet to the email.

Assessment Task 4: Balance day project

Task summary 

For this assessment task you are required to prepare several General Journal entries for balance day adjustments and participate in a meeting to discuss these. You will then be asked to generate an adjusted Trial Balance, a Profit & Loss Statement, and a Balance Sheet.

This assessment is to be completed in the simulated work environment in the RTO

Required

  • Access to textbooks/other learning materials
  • Computer with Microsoft Office and internet access
  • Meeting space
  • Role play participant (assessor)
  • Australian Accounting and Auditing Standards (either online or hard copy)
  • Financial Policy and Procedures

Timing

Your assessor will advise you of the due date of these submissions.

Submit draft email to assessor

  • Draft email with Balance Day General Journal attached
  • Draft  email with Balance Day Workbook attached

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task. 

If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date. 

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Assessment Task 4 Instructions

Carefully read the following: 

The trial balance for Andrew’s Slabs as at 30 June 2017 was:

Trial Balance
Details
Debit $
Credit $
Cash at Bank
10,700

Accounts receivable
52,000

Inventory
20,000

Equipment
45,000

Accumulated depreciation on equipment

10,000
Vehicles
50,000

Accumulated depreciation motor vehicles

6,250
Land
27,500

Accounts payable

25,000
Loan

85,000
Capital

181,430
Sales revenue

120,000
Interest revenue

2,000
Cost of goods sold
86,250

Salaries expense
30,000

Rates expense
1,500

Stationery expense
800

Advertising expense
1,900

Interest expense
300

Motor Vehicle expense
780

Repairs Expense
2,500

Insurance Expense
450

Total
329,680
329,680

Complete the following activities:

Instruction to Student:  after preparing the journal entries for these transactions seek approval from your assessor (Andrew)  before making ledger entries

  1. Record the following balance day adjustments in the general journal below.  Show your workings.
  • Depreciation of equipment 10% using the straight-line method
  • Depreciation of vehicles 12.5% using the diminishing balance method
  • Rates paid in advance $600
  • Salaries owing $3,500
  • Interest revenue earned but not received $1,300
  • Create an allowance for doubtful debts equal to 5% of accounts receivable.
  • Physical stocktake determined inventory at end 30 June 2017 was $18,800

General journal entries for balance day adjustments as at 30 June 2017

Adjustment
Accounts
Dr $
Cr $
a








b








c







d







e







f








g









Create a new Word document and insert your completed table into it.

Save it as Balance Day General Journal

2. Draft  an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment and ask for a meeting to discuss these. 

Your assessor will answer the email with a date and time for a meeting to discuss the entries.

Attach your general journal to the email.

3. Meet with Andrew (your assessor).

The objective of the meeting is to discuss, and update where necessary, the journal entries. 

At the meeting you should carefully go through the journal entries, explaining each entry clearly and using appropriate industry terminology. 

During the meeting, demonstrate effective communication skills including:

  • Speaking clearly and concisely 
  • Using non-verbal communication to assist with understanding 
  • Asking questions to identify required information 
  • Responding to questions as required 
  • Using active listening techniques to confirm understanding 

4. Create an Excel Workbook.

After the meeting, prepare each of the following as a separate Worksheet:

  1. Adjusted trial balance at 30 June 2017.
  2. Profit and loss statement for the year ending 30 June 2017
  3. Balance sheet as at 30 June 2017.

Save the Workbook as Balance Day.

5. Draft an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachment. 

Attach your Balance Day Workbook to the email.

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