Financial Accounting 1
Major Assignment
Zone Electrical Services
Peter Piper purchased a small business in a suburban shopping centre selling electrical
equipment and electrical repair services. The purchase of the business was settled on 31
May 2020, and Peter has asked if you would take the role of accountant to prepare his
accounting records, process transactions for June, and finalise his accounting reports for the
year ending 30 June 2020. A trial balance at the date of the purchase (31 May) appears
below showing the information you will need to create the Zone Electrical Accounting
records.
You accept the role and you are required to undertake the following tasks. Please note –
you are required to complete ALL the Task Checklists provided in the Excel Spreadsheet
where you need to prepare your assignment. If you state that you have completed a task
and the task has not actually been completed – marks will be DEDUCTED:
Task 1 Prepare an Opening Journal TASK 1 10%
Opening General Entry and Post the entry to SUBMISSION DUE
Journal Entry/Posting the General Ledger and FRIDAY WEEK 5
opening entry Subsidiary Ledgers 11pm. THIS WILL
BE MARKED
Task 2 Record Transactions in the TASK 2 25%
Specialised Specialised Journals for the SUBMISSION DUE
Journals/Posting month of June 2020. Post the FRIDAY WEEK 7
entries entries to the General Ledger 11pm. THIS WILL
AND the Subsidiary Ledgers BE MARKED
(as appropriate).
Task 3 Process Adjusting entries at See Below 25%
Adjusting 30 June 2020 - post to the
Entries/Posting to General Ledger.
Ledger
Task 4 Prepare Closing entries for See Below 20%
Closing the year ended 30 June 2020
Entries/Posting to – post to the General Ledger.
Ledger
Task 5 Prepare Classified Financial SUBMISSION FOR 20%
Classified Financial Reports for 30 June- Balance TASKS 3 to 5 DUE
Statements Sheet/Income Statement/ FRIDAY WEEK 11
Subsidiary Ledger Listings 11pm.
100%
Task 1 Due Week 5: Using the 31 May 2020 Trial Balance (below),
.1 Prepare an Opening Journal entry to create the new Accounting records for Zone
Electrical Services. Ensure you have a narration on all General Journal Entries.
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.2 Post the Opening Journal entry to the relevant General Ledger and Subsidiary Ledger
accounts contained in the Excel File provided for this assignment.** The Excel file for your
assignment is in the Assessments Module on the Course website. Check to ensure that the
totals of your subsidiary ledger accounts (when posted) agree with the relevant General
Ledger Control Account.
**(The Excel files contain the General Journal, General Ledger, Accounts Receivable/Accounts
Payable Subsidiary Ledgers that you are required to complete. The necessary ledger accounts (as
well as blank accounts to be used if needed) have been included. You may be required to add new
accounts as part of the assignment.)
Student Task Checklist:
Checklist – Task 1 Completed?
Yes/No
1. Does your Opening General Journal
entry balance? (Dr=CR)
2. Date/Narration entered on opening
General Journal entry?
3. All postings to ledgers complete
(tick them off as you go). Prepare a
trial balance after you have posted
all the entries to ensure your
General Ledger balances.
Ensure Dr =Cr
4. Check that the total of all accounts
in your subsidiary ledgers equals
the Control account(s) in the
General Ledger
5. Complete the checklist in your Excel
Spreadsheet when lodging your
Opening entries for review
Zone Electrical Services - Chart of Accounts as at 31 May 2020
605 Cash at Bank 5,370.00
607 Accounts Receivable Control 14,355.00
609 Allowance for Bad and Doubtful Debts 287.00
611 Inventory on Hand 12,400.00
613 Stationery on Hand 130.00
615 Prepaid Expenses 2,690.00
653 Buildings 360,000.00
655 Accumulated Depreciation - Buildings 73,500.00
657 Electrical Equipment 48,400.00
659 Acc. Depreciation –Electrical Equipment 15,417.00
703 Accounts Payable Control 8,349.00
707 Income Tax Payable 1,386.00
709 Advertising Expense Payable 511.00
711 Telephone Expense Payable 946.00
699 GST Clearing Account (Please Note – this is a 2,750.00
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Credit Balance and a net liability at 31 May)
753 ABC Bank Mortgage Loan (7-years) 50,000.00
503 Capital – Peter Piper 290,199.00
Additional Notes
Subsidiary Ledger Balances
Schedule of Accounts Receivable
as at 31 May 2020
Acc. No.
60701 New Star Design -
60703 Medical Centres SA 495
60705 Gully Construction -
60707 Bendywise Bank 8,228
60709 Housing For U 4,752
60711 The Pub Group 880
$14,355
Schedule of Accounts Payable
as at 31 May 2020
70301 Action Limited -
70303 Voltz 3,168
70305 Amped Up Industries 275
70307 Safety First 1,463
70309 Clips n Cables 3,443
$8,349
You will need to enter this information into the appropriate subsidiary ledger accounts.
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Task 2 Due Week 7 – Record Transactions in Specialised Journals
Your next task is to record the effect of the June transactions (below) in the specialised
journals provided in your Excel Spreadsheet. When you have entered the transactions into
the relevant specialised journal you are required to enter the column totals on all the
specialised journals. Don’t forget to enter the General Ledger Account numbers underneath
the totals for each column (or in the relevant column for (sundries).
When you have done this, you are required to post the totals of each of the specialised
journals to the relevant General Ledger and Subsidiary Ledger Accounts (Accounts
Receivable and Accounts Payable) in the Excel Spreadsheet.
Transactions
June 3 Issued Cheque number 719 to Amped Up Industries. The cheque amount was
$269.50 and a discount of $5.50 (including GST of $0.50) was received for
early payment.
June 4 Purchased 200 metres of cabling from Clips n Cables (Invoice 3081) for $9.50
per metre, plus a total freight charge of $100 and total GST of $200.
June 6 Sold 15 Energy Saving Timers for $25 each, plus a total GST of $37.50 to
Medical Centres SA (Invoice 4296)
June 7 Purchased Safety Switches from Action Limited (Invoice 634) for $1,100
including GST.
June 10 Purchased 20 safety switches from Amped Up Industries (invoice 7050) for
$12 each, plus a total freight charge of $60 and total GST of $30.
June12 Cash Sale of 30 power boards with surge protection for $25 each plus a total
GST of $75 to Heather Philips (Receipt 286)
June 12 Sold 10 Safety Switches on Credit to New Star Designs – list price is $100 each
(net of GST). Invoice 4297.
June 14 Paid “The Advertiser Newspaper” (Chq 720) $660 (GST included) for
advertising in the local paper.
June 21 Made a repayment of $1,000 on the ABC Bank Loan – Principal $750; Interest
$250. Cheque Number 721.
June 21 Cash Sales banked $13,100 (Net of GST).
June 29 New Star Designs paid Invoice 4297. An early payment discount of 5% of the
Invoice amount was allowed to the customer.
Checklist - Task 2 Completed?
Yes/No
1. Have you entered totals in all of
the columns of your Specialised
Journals?
2. Have you entered account
numbers underneath each
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column total in your specialised
journals? For the sundries
column enter the Account
number on each line as referred
to in the lecture materials.
3. All postings to General Ledger
and Subsidiary Ledgers
complete?
4. Have you entered
Date/Details/Posting reference
in all ledger accounts?
5. Tick off entries as you go.
6. Prepare a trial balance after you
have posted all the entries to
ensure your General Ledger
balances.
Ensure Dr=Cr
7. Check that the total of all
accounts in your subsidiary
ledgers equals the Control
account(s) in the General Ledger.
8. Complete the relevant checklist in
your Excel Spreadsheet.
Task 3 Due Week 11 Adjusting Entries
Your next task is to enter the adjusting entries into your General Journal and post the
entries to the General Ledger. When you enter a journal entry don’t forget the date, the
account number and a narration for each entry. Please note – you are NOT required to
prepare a worksheet to record the adjusting entries and an adjusted trial balance.
(a) Depreciation on the Buildings is 5% using the Diminishing Balance Method. The
Electrical Equipment is depreciated using the Straight Line Method. Equipment is
expected to have a useful life of 10 years with a residual value of $400.
(b) Prepaid Expenses taken over from the previous owner was for rent paid 12 months’ in
advance on the shop premises. Only 11 months’ rent remains prepaid at 30 June.
(c) The periodic inventory method is used. Closing Inventory at 30 June 2020 is $13,000.
You will need to process a Journal entry to account for the Opening and Closing
Inventory. (Hint – Prepare a General Journal Entry to first Transfer the Opening
Inventory to the P&L Summary Account; and then account for the Closing Inventory,
also using the P&L Summary Account). Do NOT net off the opening and closing
Inventory.
(d) On 4 July you sent an invoice (your business name is ‘Accounting Plus’) to Peter Piper
for your accounting services for June 2020. The invoice you sent including GST was
$3,300. The charges have not yet been accounted for. The charges payable to you by
Zone Electrical Services have not yet been included in Zone’s business records.
(e) Staff wages of $3,000 are paid monthly. Wages have been paid for the two weeks
ended 15 June.
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Checkist – Task 3 Completed?
Yes/No
1. Do your General Journal entries
balance? (Dr=CR)
2. Date/Narration/account number
entered on every General Journal
entry?
3. All postings to ledgers complete
(tick them off as you go). Prepare a
trial balance after you have posted
all the entries to ensure your
General Ledger balances.
Ensure Dr =Cr
4. Complete the relevant checklist in
your Excel Spreadsheet.
Task 4 Due Week 11 Closing entries
Once you have completed the data entry for the above tasks, you need to prepare and
record the closing entries so that you can prepare your financial reports.
Step 1 – Prepare a General Ledger Trial Balance to ensure that your General Ledger
Balances.
Step 2 – Prepare the General Journal entry to transfer the opening inventory to the P&L
Summary, and to account for the Closing Inventory via the P& L Summary Account also (the
final balance in your Inventory ledger account must be the final inventory for your balance
Sheet as at 30 June 2020).
Step 3 – Post the Closing entry to the P & L Summary Account and all the individual income
and expense accounts. Please ensure that, after posting the entry, ALL your income and
expense accounts have zero balances. The balance in your Profit & Loss Summary Account
will be the profit or loss for the period ended 30 June.
Step 4 - Prepare a General Journal Entry to transfer the balance in the Profit & Loss
Summary Account to Peter Piper’s Capital Account and post the entry into the General
Ledger. The balance of the Profit & Loss Summary Account should now be zero.
The only General Ledger accounts left with a balance should be Balance Sheet Accounts.
Step 6 – Prepare another Trial Balance of your General Ledger (which should be Balance
Sheet accounts only) and ensure that it balances (ie DR=CR)
Task List – Task 4 Completed?
Yes/No
1. The trial balance you prepared in
Step 1 balances? (Dr=CR)
2. All your Income/Expense
accounts in the General Ledger
have zero balances after you
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have posted your Closing Journal
entry to the P & L Summary
Account?
3. All postings to ledgers complete
(tick them off as you go). Ensure
Dr =Cr
4. Complete the relevant checklist in
your Excel Spreadsheet.
Task 5 Due Week 11 Financial Reports
You are only required to prepare (a) a properly classified Balance Sheet (b) Classified
Income Statement, and (c) Accounts Receivable and Accounts Payable Listings from the
Subsidiary Ledgers – to agree with the General Ledger Control Account for Zone Electrical
Services – A Cash Flow Statement is not required. Please enter your reports in the Financial
Reports Worksheet in the Excel File provided.
Task List – Task 5 Completed?
Yes/No
1. Have you prepared a CLASSIFIED
Balance Sheet and Income
Statement?
2. Balance Sheet Balances? If not –
check that all postings and tasks
from 1 to 4 have been
completed properly. Income
Statement agrees with profit
shown in equity section of
Balance Sheet?
3. Accounts Receivable and
Accounts Payable Listings from
the Subsidiary Ledgers agree
with the General Ledger Control
Accounts?
4. Complete the relevant checklist in
your Excel Spreadsheet.