Accounting Principles and Adjustments

This accounting assignment delves into fundamental concepts like debit and credit balances, trial balance preparation, and accrual adjustments. It includes questions on recognizing revenue, expenses, prepaid items, depreciation, and various types of liabilities. Students are also tasked with calculating liquidity ratios and analyzing financial performance through a 10-column spreadsheet. The assignment provides a practical understanding of accounting principles and their application in real-world scenarios.

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Q1 Plagiarism
Plagiarism the use and publication of another author’s language, thoughts, Ideas , or
expression as one's own original work without their consent. These works can be
songs, articles, videos, poems etc. Plagiarism is unfair to honest students who have
put in their time as it underestimates the quality of their work.
Q2 Pasting spreadsheets in doc files
Steps
 Go to Excel
 Click page layout
 Under headings -sheet options, select print check box
 Optional- to show formulas, click formulas then show formulas
 To copy click paste, as picture, copy as picture, then paste in Word
(Microsoft, 2017)
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B C D
Total
14,568.00 258,951.00 273,519.00
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B C D
Total
14568 258951 =B2+C2

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Q3 Accounting resources on the Internet
Also referred to as online accounting, E-accounting is one of the latest developments
in the accounting profession. It is a tool that is available online and was developed to
eliminate manual entry. This software has the ability to perform account preparations
through internet based accounting instruments, such as advanced tool boxes .The
aim of E-accounting is to aid in efficient fast decision making process for business
(Kumar, 2008).
Q4 Professional accounting bodies
Website Purpose
www.apesb.org.au This body is responsible for setting the ethic
standards for accounting profession
www.cpaaustralia.com.au The website contains useful resources such as
study cases like ABC learning.
www.accountingcoach.com Accounting coach provides a free online course
on accounting
www.investopedia.com Investopedia is the equivalent to encyclopedia
for finance terms
www.aasb.gov.au This body prescribes the accounting rules that
Australian companies should abide to

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Q5 WorkIntegrated Assessment – Description of Computing Environment
The hardware set up at my current workplace consist of a seventh generation Intel i7
Skylake processor coupled with 16 GB of DDR RAM and a Nvidia 1070 Geforce
graphics card connected to an Acer 4K resolution monitor. The same setup but with
different graphics cards from Nvidia is used by another 20 of my coworkers, in an
office which is shared by three more coworkers who are using their own Lenovo
laptops which are connected to a docking station. Each colleague has a 22" or larger
monitor.
Most computers are physically connected to the network via Ethernet cable to a
router which is bridged to the network of the office building. A VLN is set up so we
can safely connect to our server which is used for demanding computation. We
share data directly through the network or use one of several free cloud-storage
services, mostly Google Drive. The data sets that we test on are stored on a hard-
drive that is connected to this network. The VLN is also used for remote access
when working from home. The wireless router provides both 2.4 GHz and 5 GHz
networks.
The software we use is left to the choice of each individual, with roughly half
choosing Windows 10 and half using Ubuntu 14/16 as their operating system. On top
of this, most people utilize MATLAB or Python for algorithm design, and one of
several C compilers for efficient implementation after testing. We also extensively
use the Tensorflow and Theano libraries. Android studio is used for mobile
development. We use Latex for writing technical documents. When we work
simultaneously on a writing project we use the on-line service Overleaf. We also use
LibreOfficeCalc or Excel for working with spreadsheets, MS Word for editing Word
documents, and Impress or PowerPoint for presentations. Some colleagues use
Thunderbird for managing their e-mails, and remote meetings are usually set up with
Skype.

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Q6 Business Report
Introduction
The purpose of this business report is to explore the rise and fall of ABC learning
Australia who forgot their ABCs in accounting and operating business.
Key Financial Reports
To analyze your business health effectively you need to pay much attention to 3 key
financial statements: The three major financial reports are as follows:-
1. Cash flow Statement
The cash flow statement shows how balance sheet and income changes, affect the
flow of cash as a result from operating activities, investing activities, and financing
activities. The difference between the operating outflows and operating inflows can
broadly indicate a business’s profitability.
2. Balance Sheet
At a specific date, the balance sheet tells us the current financial position of a
company. That is it tells us what the company owns in regards to assets, what they
company owes to other third parties (liabilities), and the amount invested by owner’s
into running the business (equity).
3. Income Statement
Income statement explains the change in the net assets a company owns between
the start and end of the reporting period.
Key lessons to be learned from ABC learning:
1. Recognition of revenue accounts
ABC learning did not recognize their revenues in the correct accounting manner. The
money that was used to purchase leases and childcare licenses were recorded as
revenue instead of costs. ABC did the same with its subsidiary employees contracts.
The effect of the above two moves led to inflated revenue figures which appeared as
though the company was perfoming well..
2. Remember to continue to focus on the core business activities
In pursuit of growth, the company was chasing its dreams and forgot about
fundamental rules of operating an international business.
3. Corporate Governance
Good corporate governance appeared to be lacking within ABC learning’s
framework. This is evident from the related third party transactions with companies
run by his brother in law and wife. In addition, Eddie Groves was also involved in a
margin call without informing the Board. If the company had implemented proper
governing guidelines, a lot of the issues above would have been avoided.

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Three Ethical issues faced by ABC learning
1. Related party transactions.
ABC learning directors used to make transactions with their relatives which were not
recorded properly in financial statements. Ethical disclosure of related party
transaction is crucial in analyzing business’ transparency and health.
2. Decision-making issues.
Directors of ABC learning were aimed to expand into more and more markets. They
bought assets in the US and UK. Due to the rapid growth of the business, they
overlooked some fundamentals about operating on local markets.
3. Accounting practices
ABC learning forgot its ABCs in accounting. They did not properly record revenues
and costs. Mostly, they recorded their costs as revenue that was misread by
investors who bought shares that did not show real value.
Conclusion
In conclusion, the fall of ABC learning can be traced to the poor decision-making
process by Eddy Groves, complex transactions such as valuation of intangible
assets and inflated revenues, poor corporate governance systems and an overly
ambitious growth strategy (Koch, 2009).
References
Koch, D. (2009, November). The ABC of a Corporate Collapse. CPA Australia. Retrieved from
https://www.youtube.com/watch?v=YYF6JW9vJKo&list=PL12C0ADD577F6B741Jjj

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Q7 PALER
Part A

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Part B

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B C D
Account
Loan Payable Liability
Rent Expense Expense
Cash Asset
Office Supplies Asset
Salary Expense Expense
Salaries Payabe Liability
Property Tax Expense Expense
Prepaid Expense Asset
Office Furniture Asset
Electricity and Gas Expense Expense
Accounts Payable Liability
Amy Capital Proprietorship
Service Revenue Revenue
Accounts Receivable Asset
Supplies Expense Expense
Investments Asset
Amy Design Studio
$
Service Revenue 155,800
Operating Expenses
Rent 33,000
Salary 49,000
Supplies 33,600
Property Tax 1,700
Electricity and Gas 6,500
Total 123,800
Operating Income 32,000
Amount of Owner Drawings
4,100.00$
Amy Design Studio
Balance Sheet as at 31 Dec 2016
$
Assets
Cash 6,500
Accounts Receivable 9,200
Office Supplies 3,300
Prepaid Expenses 8,000
Office Furniture 28,000
Investments 5,000
Total Asset 60,000
Liabilities and Owner's Equity
Accounts Payable 2,400
Salaries Payable 2,400
Loan Payable 12,300
Total Liabilities 17,100
Total Owner's Equity 42,900
Total Liabilities and Owner's Equity 60,000
Income Statement for year ended 31 December 2016

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Q8 BALANCE SHEET
Part A

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Part B

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B C D E F G H I J K
Data
Revenue 600 K 850 2040
Expenses 300 300 1480
Dividends declared 0 45 Q 350
Additional Investment by Stockholders 0 60 460
Net Income E 300 550 P 560
Retained Earnings
Beginning of year 110 650 2240
End of Year D 410 J 1155 2450
Paid in Capital
Beginning of year 155 172 N 2200
End of Year C 155 H 232 2660
Total Assets
Beginning of year 360 F 1072 L 5110
End of Year 700 1570 M 6000
Total Liabilities
Beginning of year A 95 250 670
End of Year B 135 G 183 890
Report
Revenue =D3 K =G27+G24 =J3
Expenses =D4 =G4 =J4
Dividends declared =D5 =G5 Q =J29+J27-J30
Additional Investment by Stockholders =D6 =G6 =J6
Net Income E =D23-D24 =G7 P =J23-J24
Retained Earnings
Beginning of year =D9 =G9 =J9
End of Year D =D27+D29-D25 J =G29+G27-G25 =J10
Paid in Capital
Beginning of year =D12 =G12 N =J33-J26
End of Year C =D32+D26 H =G32+G26 =J13
Total Assets
Beginning of year =D15 F =G38+G32+G29 L =J38+J32+J29
End of Year =D16 =G16 M =J39+J33+J30
Total Liabilities
Beginning of year A =D35-D32-D29 =G18 =J18
End of Year B =D36-D33-D30 G =G36-G33-G30 =J19
case 1 case 2 case 3
case 1 case 2 case 3

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Q9 Debit and credit balances
Debit- Assets, Contra Liability, Drawings, Expenses
Credit- Liability, Contra Asset, Owner’s Equity, Revenue

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Q10 Trial balance
Part A
Part B

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A B C
Report
Croatia Deliveries ,Trial Balance, 30 June 2017
$ $
Debit Credit
Cash 27,601
Accounts Receivable 28,760
Supplies 3,654
Equipment 27,890
Trucks 302,348
Buildings 480,760
Accounts Payable 35,640
Bills Payable 34,900
Capital 917,115
Drawings 27,500
Service Revenue 123,456
Insurance Expense 4,500
Supplies Expense 1,980
Salary Expense 139,358
Fuel Expense 58,000
Electricity expense 8,760
1,111,111 1,111,111
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A B C
Report
Croatia Deliveries ,Trial Balance, 30 June 2017
$ $
Debit Credit
Cash =B12
Accounts Receivable =E10
Supplies =E12
Equipment =E13
Trucks =E6
Buildings =B10
Accounts Payable =B8
Bills Payable =E11
Capital =B6
Drawings =E8
Service Revenue =B9
Insurance Expense =B7
Supplies Expense =B11
Salary Expense =B13
Fuel Expense =E7
Electricity expense =E9
=SUM(B19:B34) =SUM(C19:C34)
Part C

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A B C
Croatia Deliveries ,Trial Balance, 30 June 2017
$ $
Debit Credit
Cash 7,601
Accounts Receivable 28,760
Supplies 3,654
Equipment 27,890
Trucks 302,348
Buildings 480,760
Accounts Payable 35,640
Bills Payable 14,900
Capital 917,115
Drawings 27,500
Service Revenue 123,456
Insurance Expense 4,500
Supplies Expense 1,980
Salary Expense 139,358
Fuel Expense 58,000
Electricity expense 8,760
1,091,111 1,091,111
Report

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Q11 Crossword

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Q12 Solution
 Unearned Service Revenue
 Prepaid expenses
 Depreciation Expense
 Accrued Revenue
Example 1
Annual subscription fees of $1200 paid in advance would be adjusted after one
month as below:
Debit Credit
Unearned Service Revenue 100
Revenue 100
Example 2
A company that pays insurance in advance of $1200 would be adjusted after one
month as below:
Debit Credit
Insurance expense 100
Prepaid Insurance 100
Q13 TypesLiabilities
Current liabilities are financial obligations due by company within the current year.
Non-current liabilities are long term financial obligations i.e outside the current year
e.g. bonds payable and long term lease(Investopidia, 2017).
Q14 Ratios
Current ratio = current assets/current liabilities
Current ratio is a type of liquidity ratio in financial analysis. It is used to measures the
company’s ability to meet its short term obligations.

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Q15: 10 Column Spreadsheet- part a
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A B C D E F G H I J K
Report Section
Colossal Motors Worksheet, Period Ended 30th June 2017
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 54,670 - 54,670 54,670
Accounts Receivable 131,560 - 131,560 131,560
Supplies 17,560 - 450 17,110 17,110
Prepaid Insurance 3,456 - 400 3,056 3,056
Equipment 347,000 - 347,000 347,000
Accumulated Depreciation - 107,890 2,860 110,750 110,750
Accounts Payable - 145,890 145,890 145,890
Wages Payable - 16,789 500 17,289 17,289
Unearned Service Revenue - 12,345 4,600 600 8,345 8,345
Capital - 210,802 210,802 210,802
Drawings 28,900 - 28,900 28,900
Service Revenue - 267,890 600 4,600 271,890 271,890
Depreciation expense - - 2,860 2,860 2,860
Wagese Expense 165,900 - 500 166,400 166,400
Insurance Expense - - 400 400 400
Utilities Expense 12,560 - 12,560 12,560
Supplies Expense - - 450 450 450
- -
Total 761,606 761,606 9,410 9,410 764,966 764,966 182,670 271,890 582,296 493,076
Net income OK 89,220 89,220
Totals 271,890 271,890 582,296 582,296
Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet
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A B C
Colossal Motors
Statement of Net Income
For the period ended 30th June 2017
$
Service Revenue 271,890
Less: Operating Expenses
Depreciation expense 2,860
Wagese Expense 166,400
Insurance Expense 400
Utilities Expense 12,560
Supplies Expense 450 182,670
Net Income 89,220
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A B
Statement of Changes in Owner's Equity
$
Capital beginning -
Additional Contributions 210,802
Net Income 89,220
Drawings (28,900)
271,122

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A B
Balance Sheet
Assets
Current Assets
Cash 54,670
Accounts Receivable 131,560
Supplies 17,110
Prepaid Insurance 3,056
Total Current Assets 206,396
Non Current Assets
Equipment 347,000
Less Accumulated Depreciation (110,750)
Total Non Current Assets 236,250
Total Asset 442,646
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable 145,890
Wages Payable 17,289
Unearned Service Revenue 8,345
Total Current Liabilities 171,524
Total Liabilities 171,524
Owner's Equity 271,122
Total Liabilities and Owner's Equity 442,646

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Q15 part b- loss
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A B C D E F G H I J K
Report Section
Colossal Motors Worksheet, Period Ended 30th June 2017
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 54,670 - 54,670 54,670
Accounts Receivable 131,560 - 131,560 131,560
Supplies 17,560 - 450 17,110 17,110
Prepaid Insurance 3,456 - 400 3,056 3,056
Equipment 347,000 - 347,000 347,000
Accumulated Depreciation - 107,890 2,860 110,750 110,750
Accounts Payable - 145,890 145,890 145,890
Wages Payable - 116,789 500 117,289 117,289
Unearned Service Revenue - 12,345 4,600 600 8,345 8,345
Capital - 210,802 210,802 210,802
Drawings 28,900 - 28,900 28,900
Service Revenue - 267,890 600 4,600 271,890 271,890
Depreciation expense - - 2,860 2,860 2,860
Wagese Expense 265,900 - 500 266,400 266,400
Insurance Expense - - 400 400 400
Utilities Expense 12,560 - 12,560 12,560
Supplies Expense - - 450 450 450
- -
Total 861,606 861,606 9,410 9,410 864,966 864,966 282,670 271,890 582,296 593,076
Net income OK (10,780) (10,780)
Totals 271,890 271,890 582,296 582,296
Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet
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A B C
Colossal Motors
Statement of Net Income
For the period ended 30th June
$
Service Revenue 271,890
Less: Operating Expenses
Depreciation expense 2,860
Wagese Expense 266,400
Insurance Expense 400
Utilities Expense 12,560
Supplies Expense 450 282,670
Net Income (10,780)
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A B
Statement of Changes in Owner's Equity
$
Capital beginning -
Additional Contributions 210,802
Net Income (10,780)
Drawings (28,900)
171,122

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A B
Balance Sheet
Assets
Current Assets
Cash 54,670
Accounts Receivable 131,560
Supplies 17,110
Prepaid Insurance 3,056
Total Current Assets 206,396
Non Current Assets
Equipment 347,000
Less Accumulated Depreciation (110,750)
Total Non Current Assets 236,250
Total Asset 442,646
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable 145,890
Wages Payable 117,289
Unearned Service Revenue 8,345
Total Current Liabilities 271,524
Total Liabilities 271,524
Owner's Equity 171,122
Total Liabilities and Owner's Equity 442,646

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References
Investopidia. (2017). Terms. Retrieved from Investopidia:
www.investopidia.com/terms/n/noncurrent-liabilities.asp
Koch, D. (2009, November). The ABC of a Corporate Collapse. CPA Australia.
Kumar, V. (2008, December 1). E-Accounting. Retrieved from Accounting Education:
http://www.svtuition.org/2008/12/e-accounting.html
Microsoft. (2017). Print row and column headings. Retrieved from Support Office:
https://support.office.com/en-gb/article/Print-row-and-column-headings-de41db7e-b716-
4d8b-a5fd-5fb50645101f