Top Education Institute TACC401: Accounting Principles Assignment

This assignment solution for TACC401, Principles of Accounting, covers three case studies. The first case focuses on the preparation of a ten-column worksheet, financial statements (income statement, statement of equity, and balance sheet), and closing entries for HNM Medical Service. The second case contrasts manual and computerized accounting systems, outlining the advantages of computerized systems. The third case examines ethical issues within a partnership, analyzing stakeholder roles and identifying unethical actions. The solution provides detailed explanations, journal entries, and financial statement presentations, offering a comprehensive understanding of accounting principles and their practical applications.

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TACC401: Principles of Accounting

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Executive Summary
This report has been divided into three different sections. The first section has presented
discussion ion relation to the development of financial statements including column worksheet,
income statements, balance sheet and statement of equity. The second section has demonstrated
the use of manual and computerized accounting system. The third section has dealt with the
ethical issues involved in partnership form of business activities.

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Contents
Executive Summary.........................................................................................................................2
Case 1: Preparation of worksheet, financial statements and closing entries...................................4
(A): 10 Column worksheet of HNM Medical Service for the year ended 30 June, 2017............4
B: Financial Statement of HNM Medical Service.......................................................................7
C: Journalize the closing entries................................................................................................10
Case 2: Manual and computerized accounting..............................................................................12
Part A: Manual accounting.......................................................................................................12
Part B: Computerized accounting package................................................................................13
Case 3: Partnership question and other information......................................................................15
A: Stakeholders in the Situation.................................................................................................15
B: Analysis and explanation of Wrong actions done by Derek.................................................15
C. Ethical Issues Involved in the Case.......................................................................................16

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Case 1: Preparation of worksheet, financial statements and closing entries
(A): 10 Column worksheet of HNM Medical Service for the year ended 30 June, 2017
10 Column Worksheet of HNM Medical Service for the year ended 30 June 2017
Accounts
Title Trial balance Adjustment
Adjusted
Trial
Balance
Income
Statement Balance sheet
Debit Cred
it
Debi
t
Cred
it Debit Cred
it Debit Cred
it Debit Cred
it
Cash at
Bank
$
12,60
0
$
12,60
0
$
12,600
Accounts
Receivabl
e
$
11,80
0
$
11,80
0
$
11,800
Prepaid
Insurance
$
1,800
$
1,340
$
460
$
460
Land
$
180,2
00
$
180,2
00
$180,
200
Building
$
196,0
00
$
196,0
00
$196,
000
Accumul
ated
Depreciat
ion –
Building
$
86,90
0
$
9,600
$
96,50
0
$
96,50
0
Equipme
nt
$
32,30
$
32,30
$
32,300

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0 0
Accumul
ated
Depreciat
ion –
Equipme
nt
$
8,800
$
3,680
$
12,48
0
$
12,48
0
Accounts
Payable
$
16,40
0
$
16,40
0
$
16,40
0
Interest
Payable
$
260
$
260
$
260
Salaries
Payable
$
2,360
$
2,360
$
2,360
Rates
Payable
$
4,820
$
4,820
$
4,820
Unearned
Fees
$
600
$
600
$
600
Mortgage
Payable
$
64,00
0
$
64,00
0
$
64,00
0
Owner,
Capital
$
236,9
50
$
236,9
50
$
236,9
50
Owner,
Drawings
$
86,50
0
$
86,50
0
$
86,500
Fees
Earned
$
262,4
30
$
600
$
261,8
30
$
261,8
30
Rent $ $ $

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Revenue 14,40
0
14,40
0
14,40
0
Salaries
Expense
$
124,6
00
$
2,36
0
$
126,9
60
$
126,9
60
Telephon
e
Expense
$
4,520
$
4,520
$
4,520
Interest
Expense
$
3,080
$
260
$
3,340
$
3,340
Insurance
Expense
$
36,48
0
$
1,34
0
$
37,82
0
$
37,82
0
Depreciat
ion
Expense
–
Building
$
9,60
0
$
9,600
$
9,600
Depreciat
ion
Expense
–
Equipme
nt
$
3,68
0
$
3,680
$
3,680
Rates
Expense
$
4,82
0
$
4,820
$
4,820
Total $ $ $ $ $ $ $ $

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689,8
80
689,8
80
22,6
60
$22,6
60
710,6
00
710,6
00
190,7
40
276,2
30
$519,8
60
434,3
70
Profit/
(Loss)
$
85,49
0
$
85,49
0
Total
$
276,2
30
$
276,2
30
$519,8
60
$
519,8
60
(Brigham and Michael, 2013)
B: Financial Statement of HNM Medical Service
Profit and loss Statement of HNM Medical Service
for the year ended 30 June 2017
Particulars Amount Amount
Sales Revenue
Fees Earned $ 261,830.00
Rent Revenue $ 14,400.00
Total Revenue $ 276,230.00
Less: Expenses
Salaries Expense $ 126,960.00
Telephone Expense $ 4,520.00
Interest Expense $ 3,340.00
Insurance Expense $ 37,820.00
Depreciation Expense –
Building $ 9,600.00
Depreciation Expense –
Equipment $ 3,680.00
Rates Expense $ 4,820.00
Total Expenses $ 190,740.00
Net Profit $ 85,490.00

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(Damodaran, 2011)
Statement of Equity of HNM Medical Service
as on June, 2017
Particulars Amount Amount
Common Stock
Owner, Capital $ 236,950.00
Add: Any addition $ -
Less: Withdrawal $ 86,500.00
Closing Capital $ 150,450.00
Retained Earnings
Opening Balance $ -
Add: Profit $ 85,490.00
Closing Balance $ 85,490.00
Balance Sheet of HNM Medical Service
as on June, 2017
Particulars Amount Amount
Assets
Current Assets
Cash at Bank $
12,600.00
Accounts Receivable $
11,800.00
Prepaid Insurance $
460.00
Total Current Assets
$
24,860.00

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Non Current Assets
Land $
180,200.00
Building $
196,000.00
Accumulated Depreciation –
Building
$
(96,500.00
)
Equipment $
32,300.00
Accumulated Depreciation –
Equipment
$
(12,480.00
)
Total Current Assets $
299,520.00
Total Assets $
324,380.00
Liabilities and Equity
Current Liabilities
Accounts Payable $
16,400.00
Interest Payable $
260.00
Salaries Payable $
2,360.00
Rates Payable $
4,820.00
Unearned Fees $
600.00

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Total Current Liabilities
$
24,440.00
Non Current Liabilities
Mortgage Payable $
64,000.00
$
64,000.00
Equity
Owner, Capital
$
150,450.00
Retained Earnings $
85,490.00
Total Equity
$
235,940.00
Total Liabilities and Equity
$
324,380.00
(Davies and Crawford, 2011)
C: Journalize the closing entries
Closing Entries in the books of HNM Medical Service
as on June, 2017
Dat
e Account Tiles Debit Credit
Amount in $
30-
Jun Fees Earned $
261,830.00
Rent Revenue $
14,400.00
Income Summary
$
276,230.00
(To close temporary account of credit balance)

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30-
Jun Income Summary
$
190,740.00
Salaries Expense $
126,960.00
Telephone Expense $
4,520.00
Interest Expense $
3,340.00
Insurance Expense $
37,820.00
Depreciation Expense – Building $
9,600.00
Depreciation Expense – Equipment $
3,680.00
Rates Expense $
4,820.00
(To close temporary account of debit balance)
30-
Jun Income Summary
$
85,490.00
Retained Earnings
$
85,490.00
(To Close income summary as net profit
balance)
(Feldman and Libman, 2011)

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Case 2: Manual and computerized accounting
Part A: Manual accounting
Manual accounting system refers to the accounting system where accounts are
maintained and prepared by manual efforts without the use of any computerized accounting
software. There is need to record all the journal entries and required to post them in specific
ledgers as per the accounts. There is need to have various source documents that are needed to
perform the manual accounting and they have been disclosed as under:
 Bank Statement (Bank Pass Book): Bank statement contains the details of all payments
made through cheque and the amounts received through customer through cheque. Even
all the online transactions performed using the bank accounts are being reflected in the
bank statement. Information provided in the bank statement helps to reconcile the bank
entries with the cash book entries and any adjustments need to make can be settled at the
end of period (Gelinas and Dull, 2014).
 Cash register tape: Cash register is generated on the machine used to print the sale
invoice or print bills. This cash resister tape is very effective method to record the
information of the customers as it provides information such as merchant name, business
address, contact details and cash received. It also helps to generate the information about
the list of customers who have paid the bills and same can be cross checked through use
of cash register and bank statement. The cash register tape is useful to extract the
information such as merchant name, commodities, product sold, price charged to
customer, services sold and all other information which is required to verify the invoices
and number of units sold. The main disadvantage of cash register tape is that it requires
some training to effectively operate them (Gilbertson, Lehman and Gentene, 2013).
 Receipts generated from the credit card and debit card transaction: All the receipts
that are generated on debit and credit card transactions are useful to keep the track of the
all the information on disbursement of cash to suppliers or for any other expenses.
 Sales Order: The development of sales document is an important part within the manual
accounting system which involves recording the contract between the customer and the
business for supplying certain goods or services at a specific period of time. As such, it