Accounting Systems and Processes - Finance Homework Solution

This assignment solution addresses various aspects of accounting systems and processes. It begins by defining plagiarism and its implications. It provides Excel spreadsheet formulas. The solution then lists accounting resources, including websites like Accounting Coach and Investopedia. It also covers CPA Australia and its resources. Further, it includes a reflection on the student's previous work experience, detailing the use of computing devices. The assignment then delves into financial reporting, including the statement of financial position, income statement, and cash flow statement, with a focus on the ABC Learning case study. It analyzes ethical issues and provides journal entries, including an income statement, owner's equity statement, and balance sheet. The solution presents a trial balance, both in normal and formula views, and defines credit and debit balances. It also includes a trial balance of Croatia Deliveries, both in normal and formula views, and provides solutions to a crossword puzzle related to accounting terms. The solution concludes with explanations of adjustment entries, current and non-current liabilities, and the current ratio.

1
Accounting System and Process

2
Answer 1:
The term ‘Plagiarism’ refers to the practice of copying other person work ideas and
referring to them as one’s own. It has been regarded as unacceptable in the universities by
students and is regarded as punishable offence. It is being regarded as unfair to honest
students as it provide unfair advantage to students over other for the completion of an
assessment (McCabe, Butterfield and Trevino, 2012.).

3
Answer 2:
Formula View Excel Spreadsheet:
Adding Numbers in the column
22 55 66 75 96
23 56 67 76 96
24 57 68 77 96
25 58 69 78 96
26 59 70 79 96
27 60 71 80 96
28 61 72 81 96
29 62 73 82 96
30 63 74 83 96
31 64 75 84 96
Normal Excel Spreadsheet:
Adding Numbers in the column
22 55 66 75 96
23 56 67 76 96
24 57 68 77 96
25 58 69 78 96
26 59 70 79 96
27 60 71 80 96
28 61 72 81 96
29 62 73 82 96
30 63 74 83 96
31 64 75 84 96
265 595 705 795 960

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Answer 3: The five websites that helps in providing the accounting resources are as under:
A: Accounting Coach: This website contains lots of information about the accounts like book
keeping and also contains many quizzes and puzzles to solve.
URL: http://www.accountingcoach.com/
B: Learn Accounting: This website is very useful for accounting point of view as it contains
lots of information about the introduction to business accounting and it is easy to understand.
URL: http://www.learn-accounting.com/
C: My Accounting Course: The main benefit of this website is that all the accounting
resources are available free of cost. This website helps to understand the accounting ratio
easily.
URL: http://www.myaccountingcourse.com/
D: The National Society for Accountants (NSA): This website is well known from the point
of view of professionals and it is largest accounting website that provides details on
worldwide accounting and tax structure.
URL: http://www.nsacct.org/home
E: Investopedia: It is well known accounting and finance blog that helps to understand
various accounting and finance terms and other information.
URL: http://www.investopedia.com/personal-finance/

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Answer 4:
The Australian professional accounting organization other than ABC Learning is CPA
Australia. This Australian organization is one of the famous organizations that educate and
provide certified accounting course degree to their members. I have selected accounting
professional and ethical standards as the resources available on this website. I have selected
this resource because this resource helps us to guide on different accounting professional
standards and all the members are govern by the principles underlined under these standards.
It is the responsibility of the CPA members to act in the public interest and also to abide by
the basic principles of integrity, objectivity and confidentiality.

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Answer 5:
My previous workplace was an educational institute who is involved in preparing of
students for medical and engineering entrance exams. My job role was of an office manager
who occupies the responsibility of handling all the documents and administration works. I
used to perform all the work role of the office assistant manager on computer devices. The
computing environment in the workplace was very good as all the devices were up to date
and run efficiently. There was no delay in work due to inefficient performance of the
computer devices. The classrooms integrate the use of computer devices such as audio and
video clips for teaching purposes. This help in providing practical demonstration to the
students so that are able to learn more quickly. The teachers also encompass the use of
Microsoft power point presentations for delivering lectures to the students to make lessons
interesting and easy to learn for the students. There is wide range of computing facilities
provided by the University Staff and students such as multimedia projectors, laptops and
personal computers. These computing facilities are updated and prove to be largely helpful
for both students and teachers for carrying out their responsibilities properly. As an assistant
manager, I was able to save large amount of office data on computers and carrying out my
day-to-day job roles quickly. The adequate use of computer devices by both staff and
students helped a lot for proving better quality education to the students. The computing
devices in my workplace were highly efficient for developing and preparing students to
qualify for entrance exams. Also, it aids in quick communication between students, teachers
and office staff. The students were also able to learn the use of various computing devices
that will prove to be highly helpful for them in their future educational context (Abraham,
Baets, Koppen and Nickolay, 2006).

7
Answer 6:
Business Report
Major Financial Reports and purpose of each
The major types of financial reports are as follows:
Statement of Financial Position:
This is also known as balance sheet and is used for presenting the financial position of
an entity at a particular point of time and consists of following three components:
Assets: The assets are known as economic resource of a business entity that is owned and
controlled for producing value.
Liabilities: Liabilities refers to amount owned by a business to others such as creditors, loans
etc.
Equity: Equity represents the capital structure of a company that remains after it pay offs its
liabilities from the assets (Porter and Norton, 2014).
Income Statement
It is also known as profit and loss statement that depicts the actual financial position
of a business entity by depicting the net profit or loss over a specified time-period. It
represents the income and expenditure of a business entity for estimating the net profit or loss
realized.
Statement of Cash Flow
This financials statement represents the amount of cash and bank balances over a
financial year. The amount of cash flow is represented by the operational, investment and
financial activities.
Statement of Changes in Equity
This financial statement represents the change in the capital structure of a company
over a financial period. It usually represents the net profit or loss realized by the business
entity, share capital issued or repaid and profit or loss realized from equity (Porter and
Norton, 2014).
2. Key lessons from the ABC Learning case study
ABC Learning was an Australian company involved in providing childhood education
services. The company was collapsed in the year 2007 as it failed to make profit as depicted
from its last financial statements released. The key lessons from its collapse are that it has not
worked well on its vision statement. The company aims to corporatize the childcare industry
and thus aimed at purchasing many childcare centers but was not able to run them
successfully. The company was not able to recover from its staffing costs hat eventually
resulted in declining its profitability. Thus, it is to be learnt from the case study of ABC those
businesses should primarily aim to control their daily operational activities before targeting to
achieve their grand vision (Thomson, 2008).
3. Ethical issues from the case study of ABC Learning

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 Mis-representation of Financial Position: The investors of the company were not
completely aware of the financial position of the company. There was no disclosure
regarding the financial transactions of the company to its investors.
 Complex Financial Structure: The Company has maintained a complex financial
structure that was difficult to be understood by its shareholders.
 Accounting Irregularities: The accounting irregularities such as poor asset valuation
and revenue recognition resulted in the downfall of the company (Thomson, 2008).
Answer 7:
Part 1: Loan Payable L P
Proprietorshi
p
Rent Expenses E A Assets
Cash A L Liabilities
Office Supplies A E Expenses
Salary Expenses E R Revenue
Salaries Payable L
Property Tax Expenses E
Prepaid Expenses A
Office Furniture A
Electricity and Gas expenses E
Accounts Payable L
Amy Capital P
Service Revenue R
Accounts Receivable A
Supplies Expenses E
Investments A
Part 2 Income Statement 31 Dec 2016
Particulars
Amount
s
Service Revenue 155800
Less: Expenses
Rent Expenses 33000
Salary Expenses 49000
Property Tax Expenses 1700
Electricity and Gas expenses 6500
Supplies Expenses 33600
Total 123800
Results of Operations 32000
Part 3 Owner Capital at the beginning 0
Capital Invested 15000

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Profit of the year 32000
Sub total 47000
Less: Ending Owner's Capital 42900
Amount of Owner Drawings 4100
Part 4 Liabilities Amount Assets Amount
Loan Payable 12300 Cash 6500
Salaries Payable 2400 Office Supplies 3300
Accounts Payable 2400
Prepaid
Expenses 8000
Office Furniture 28000
Amy Capital 42900
Accounts
Receivable 9200
Investments 5000
Total 60000 Total 60000

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Part 8:
Normal View:
Report Case 1 Case 2 Case 3
revenue 600 K 835 2040
expenses 300 300 1480
dividends declared 0 45 Q 810
additional investment by
stockholders 0 60 460
net income E 300 550 P 210
retained earnings
beginning of year 110 650 2240
end of year D 410 J 1200 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 138 890
Formula View:
Report Case 1 Case 2 Case 3
revenue 600 K
=F9+F6+F7-
F8 2040
expenses 300 300 1480
dividends declared 0 45 Q
=H5-H6-
H9+H8
additional investment by
stockholders 0 60 460
net income E =D5-D6 550 P =H13-H12
retained earnings
beginning of year 110 650 2240
end of year D =D12+D9 J =F12+F9 2450
paid -in capital

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beginning of year 155 172 N =H17-H8
end of year C =D16 H =F16+F8 2660
total assets
beginning of year 360 F
=F12+F16+F
24 L
=H24+H16+H
12
end of year 700 1570 M
=H25+H17+H
13
total liabilities
beginning of year A
=D20-D12-
D16 250 670
end of year B
=D21-D17-
D13 G
=F21-F17-
F13 890

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Answer 9:
Credit Balances Debit Balances
Liabilities Assets
Revenue Expenses
Gains Owner's Drawing
Owner's Equity Losses

13
Answer 10:
Normal View
Trial balance of Croatia Deliveries as on 30 June 2017
Accounts Debit Credit
Capital $ 917,115.00
Insurance Expenses $ 4,500.00
Accounts Payable $ 35,640.00
Service Revenue $ 123,456.00
Building $ 480,760.00
Supplies Expenses $ 1,980.00
Cash $ 27,601.00
Salary Expenses $ 139,358.00
Trucks $ 302,348.00
Fuel Expenses $ 58,000.00
Drawings $ 27,500.00
Electricity Expenses $ 8,760.00
Accounts Receivable $ 28,760.00
Bills Payable $ 34,900.00
Supplies $ 3,654.00
Equipment $ 27,890.00
Total $ 1,111,111.00 $ 1,111,111.00
Formula View
Trial balance of Croatia Deliveries as on 30 June 2017
Accounts Debit Credit
Capital 917115
Insurance Expenses 4500
Accounts Payable 35640
Service Revenue 123456
Building 480760
Supplies Expenses 1980
Cash 27601
Salary Expenses 139358
Trucks 302348
Fuel Expenses 58000
Drawings 27500
Electricity Expenses 8760
Accounts Receivable 28760
Bills Payable 34900
Supplies 3654
Equipment 27890
Total =SUM(C5:C20) =SUM(D5:D20)
Trial Balance after changing the amount of three accounts

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Trial balance of Croatia Deliveries as on 30 June 2017
Accounts Debit Credit
Capital $ 916,156.00
Insurance Expenses $ 4,500.00
Accounts Payable $ 35,640.00
Service Revenue $ 123,456.00
Building $ 480,760.00
Supplies Expenses $ 1,980.00
Cash $ 27,000.00
Salary Expenses $ 139,000.00
Trucks $ 302,348.00
Fuel Expenses $ 58,000.00
Drawings $ 27,500.00
Electricity Expenses $ 8,760.00
Accounts Receivable $ 28,760.00
Bills Payable $ 34,900.00
Supplies $ 3,654.00
Equipment $ 27,890.00
Total $ 1,110,152.00 $ 1,110,152.00

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Answer 11:
Blank Crossword
Clues
Down
1: The financial statement that reports the financial position of a company as of an instant or
point in time is the ________________ sheet.
2: Resources owned by a company.
3: The balance sheet classification that reports the obligations of the company.
Across
1: The basis or method of accounting that is less effective than the accrual basis in measuring
profitability.
2: The systematic allocation of the cost of equipment and buildings used in a business from
the balance sheet to the income statement over the useful life of the asset.
Solved Crossword
B L
C A S H I
L A
A A B
N S I
C S L
D E P R E C I A T I O N
T T
S I
E
S

16
Answer 12:
Types of Adjustment Entries:
A: Accrued Expenses
Example: Salary Expense 20000
To Accrued Salary Expenses 20000
B: Accrued Revenue
Example: Accrued Interest income 1000
To Interest income 1000

17
Answer 13:
The current liabilities refer to company’s debts or obligations that it is liable to pay
within a year such as short-term debt while non-current liabilities are long-term debt
obligations that are expected to be liquidated within 12 months.

18
Answer 14:
Current ratio refers to the ability of a company to pay back its short-term liabilities
with its current assets such as cash, inventory, and accounts receivable. For example, total
current assets of a company XYZ is 2000 while total current liabilities is 1000, then
company’s XYZ will be 2000/1000=2.0.

19
Answer 15: Part A: Normal View
Trial Balances at 30 June 2017
Accounts Name Trial Balance
End of Period
Adjustment
Adjustment Trial
Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash
$
54,670.00
$
54,670.00
$
54,670.00
Accounts
Receivables
$
131,560.0
0
$
131,560.0
0
$
131,560.0
0
Supplies
$
17,560.00
$
17,110.0
0
$
450.00
$
450.00
Prepaid
Insurance
$
3,456.00
$
400.00
$
3,056.00
$
3,056.00
Equipments
$
347,000.0
0
$
2,860.00
$
344,140.0
0
$
344,140.0
0
Accumulated
Depreciation
$
107,890.0
0
$
107,890.0
0
$
107,890.0
0
Accounts
Payable
$
145,890.0
0
$
145,890.0
0
$
145,890.0
0
Wages Payable
$
16,789.00
$
500.00
$
17,289.00
$
17,289.00
Unearned
Service Revenue
$
12,345.00
$
4,600.00
$
7,745.00
$
7,745.00
Capital
$
210,802.0
0
$
210,802.0
0
$
210,802.0
0

20
Drawings
$
28,900.00
$
28,900.00
$
28,900.00
Service Revenue
$
267,890.0
0
$
600.00
$
4,600.00
$
271,890.0
0
$
271,890.0
0
Depreciation
$
2,860.00
$
2,860.00
$
2,860.00
Wages Expenses
$
165,900.0
0
$
500.00
$
166,400.0
0
$
166,400.0
0
Insurance
Expenses
$
400.00
$
400.00
$
400.00
Utilities
Expenses
$
12,560.00
$
12,560.00
$
12,560.00
Accrued Service
Revenue
$
600.00
$
600.00
$
600.00
Supplies
Expenses
$
17,110.0
0
$
17,110.00
$
17,110.00
Total
$
761,606.0
0
$
761,606.0
0
$
26,070.0
0
$
26,070.0
0
$
762,106.0
0
$
762,106.0
0
$
199,330.0
0
$
271,890.0
0
$
562,776.0
0
$
490,216.0
0
Profit/(Loss) of
the year
$
72,560.00
$
72,560.00
Total
$
271,890.0
0
$
271,890.0
0
$
562,776.0
0
$
562,776.0
0

21
Answer 15: Formula View
Colossal Motors
Trial Balances at 30 June 2017
Accounts
Name Trial Balance End of Period Adjustment Adjustment Trial Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 54670 =C6 =G6
Accounts
Receivables 131560 =C7 =G7
Supplies 17560 =C8-G8 450 =G8
Prepaid
Insurance 3456 400 =C9-F9 =G9
Equipments 347000 2860 =C10-F10 =G10
Accumulated
Depreciation 107890 =D11 =H11
Accounts
Payable 145890 =D12 =H12
Wages
Payable 16789 500 =D13+F13 =H13
Unearned
Service
Revenue 12345 4600 =D14-E14 =H14
Capital 210802 =D15 =H15
Drawings 28900 =C16 =G16
Service
Revenue 267890 600 4600 =D17+F17-E17 =H17
Depreciation 2860 2860 =G18
Wages
Expenses 165900 500 =C19+E19 =G19
Insurance
Expenses 400 =E20 =G20
Utilities
Expenses 12560 =C21 =G21
Accrued 600 =F22 =H22

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Service
Revenue
Supplies
Expenses 17110 =E23 =G23
Total
=SUM(C6:C21
)
=SUM(D6:D21
)
=SUM(E8:E23
)
=SUM(F8:F23
)
=SUM(G6:G23
)
=SUM(H6:H23
)
=SUM(I18:I23
)
=SUM(J6:J23
)
=SUM(K6:K23
)
=SUM(L6:L2
)
Profit/
(Loss) of the
year =J24-I24 =I25
Total =I24+I25 =J24 =K24 =L24+L25

23
Answer 15:
Solution after Making the Changes
Colossal Motors
Trial Balances at 30 June 2017
Accounts
Name Trial Balance
End of Period
Adjustment
Adjustment Trial
Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash
$
44,670.00
$
44,670.00
$
44,670.00
Accounts
Receivables
$
64,560.00
$
64,560.00
$
64,560.00
Supplies
$
17,560.00
$
17,110.00
$
450.00
$
450.00
Prepaid
Insurance
$
3,456.00
$
400.00
$
3,056.00
$
3,056.00
Equipments
$
347,000.00
$
2,860.00
$
344,140.00
$
344,140.00
Accumulated
Depreciation
$
107,890.00
$
107,890.00
$
107,890.00
Accounts
Payable
$
145,890.00
$
145,890.00
$
145,890.00
Wages Payable
$
16,789.00
$
500.00
$
17,289.00
$
17,289.00
Unearned
Service
Revenue
$
12,345.00
$
4,600.00
$
7,745.00
$
7,745.00
Capital
$
210,802.00
$
210,802.00
$
210,802.00
Drawings
$
28,900.00
$
28,900.00
$
28,900.00

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Service
Revenue
$
200,890.00
$
600.00
$
4,600.00
$
204,890.00
$
204,890.0
0
Depreciation
$
2,860.00
$
2,860.00
$
2,860.00
Wages
Expenses
$
165,900.00
$
500.00
$
166,400.00
$
166,400.00
Insurance
Expenses
$
400.00
$
400.00
$
400.00
Utilities
Expenses
$
22,560.00
$
22,560.00
$
22,560.00
Accrued
Service
Revenue
$
600.00
$
600.00
$
600.00
Supplies
Expenses
$
17,110.00
$
17,110.00
$
17,110.00
Total
$
694,606.00
$
694,606.00
$
26,070.00
$
26,070.00
$
695,106.00
$
695,106.00
$
209,330.00
$
204,890.0
0
$
485,776.00
$
490,216.00
Profit/(Loss)
of the year
$ -
4,440.00
$ -
4,440.00
Total
$
204,890.00
$
204,890.0
0
$
485,776.00
$
485,776.00

25
References
Abraham, A., Baets, B., Koppen, M. and Nickolay, B. 2006. Applied Soft Computing
Technologies: The Challenge of Complexity. Springer Science & Business Media.
McCabe, D., Butterfield, K. and Trevino, L.K. 2012. Cheating in College: Why Students Do
It and What Educators Can Do about It Cheating in College. JHU Press.
Porter, G.A. and Norton, C.L. 2014. Financial Accounting: The Impact on Decision Makers.
Cengage Learning.
Thomson, J. 2008. Lessons learned from ABC. Retrieved 21 August, 2017, from
http://www.theaustralian.com.au/business/business-spectator/lessons-learned-from-
abc/news-story/573a6ff5085d64f7b9c146c87d22d225