You, and two other accounting students, were asked by a friend to assist with some basic financial accounting for a new business named Tasmanian Essential Oils in the Tamar Valley. This business was opened by Dr Arthur Lavender, on the 1st of July 2020 and he is the sole owner of this entity. Tasmanian Essential Oils buys (in bulk) and then on sells essential oils mainly to local customers. The owner has supplied you with the following information (note - It is assumed the Tasmanian Essential Oils is not registered for GST and it uses a perpetual inventory system):
Required: Complete one Excel workbook with three linked worksheets (1. transactions, 2. Income Statement and 3. Balance Sheet) for the month of July 2020 using the information below.
Use formulas for all calculations and format the workbook to create a positive visual effect.
During July 2020, the following transactions occurred at Tasmanian Essential Oils:
| No. | Date | Transactions |
| 1 | July 1 | Dr Lavender contributed $27,500 cash to start the business. |
| 2 | 1 | The business purchased inventory of oil on credit $5,500. |
| 3 | 1 | Dr Lavender purchased packaging supplies (jars, labels, boxes and bags) using cash, $1,650. |
| 4 | 2 | The business purchased a truck using a bank loan $27,500. |
| 5 | 2 | Cash sales of oil products amounted to $1,650. This inventory had a cost price of $825. |
| 6 | 2 | Sold oils to local tourist shop $2,200. This customer is allowed credit and will pay in two weeks. This inventory had a cost price of $1100. |
| 7 | 3 | Credit sales of oils amounted to $ 2,310. This inventory had a cost price of $1,155. |
| 8 | 3 | Purchased produce inventory on credit $3,300. |
| 9 | 7 | Cash collected from customers $2,200 related to July 2 credit sales. |
| 10 | 8 | Dr Lavender paid $275 cash to buy personal groceries from Woolworths supermarket. |
| 11 | 9 | Paid $2,200 cash salary to employees. |
| 12 | 11 | Paid $9,900 cash in advance for business insurance for the full year ahead. |
| 13 | 12 | Dr Lavender paid $3,300 for his personal home insurance. |
| 14 | 13 | Paid $2,200 cash for rent for the business premises. |
| 15 | 18 | Paid $5,500 to the supplier related to the inventory purchased on July 1. |
| 16 | 19 | Received $4,400 cash in advance from a customer for produce to be provided to them in a few days. |
| 17 | 20 | Received $2,200 from the client related to July 3 sales. |
| 18 | 21 | Dr Lavender withdrew $1,650 in cash from the business for his personal use. |
| 19 | 22 | Paid cash for the petrol expense $550, postage $110 and electricity bill $1100 (all expenses related to the business). |
| 20 | 23 | Purchased office supplies $220 on credit. |
| 21 | 24 | Revenue of $4,400 earned from the customer related to July 19 transaction. This inventory had a cost price of $2200. |
| 22 | 25 | Customer paid the rest of the amount related to July 3. |
| 23 | 26 | The business purchased equipment for $5,500 via a bank loan. |
| 24 | 26 | Recorded credit sales $3,300. This inventory had a cost price of $1,650. |
| 25 | 27 | Dr Lavender invested $44,000 personal cash in the business. |
| 26 | 28 | Dr Lavender contributes his personal truck to the business. A valuer has assessed that the fair value of the truck is $25,300. |
| 27 | 29 | Paid for office supplies purchased on July 23. |
| 28 | 30 | Collected cash from the customers related to July 26 credit sales. |
| 29 | 30 | Paid $2,200 cash wages to employees. |
| 30 | 31 | Office supplies on hand at the end of July (what was remaining) amounted to $55. |
| 31 | 31 | Bank loan interest accrued for the month of July amounts to $137. |
| 32 | 31 | Prepaid insurance used $825. |
| 33 | 31 | The depreciation expense for the trucks, related to this month, should be combined and calculated using a total residual value of $13,200 with 4 years of useful life. Assume both trucks were purchased at the beginning of the month. There is no need to consider depreciation on the machinery until the end of the year. This business uses straight-line depreciation. |
Using the following trial balance and adjustment data for Vivian’s Repair Co. of Windsor, prepare: 1. A worksheet for October 2. An income statement for October, a statement of owner’s equity for October, and a balance sheet as of October 31, 2013 Adjustment Data a. One-quarter of the prepaid insurance has expired. b. Repair supplies on hand, $795. c. Amortization on repair equipment is based on the straight-line approach, with a 10-year life and a residual value of $1,200. d. Amortization on building is also straight-line, 50-year life, and no residual value. e. Wages earned but unpaid
The notes to the company’s 1992 financial statements state that “under the most restrictive terms of the various loan agreements . . . minimum working capital of $150 million must be maintained.” Compute how close The Quaker Oats Company came to this restriction at the end of 1992.
Discussion: Accounting is a Global Business Language</d2l-icon></d2l-button-icon></d2l-dropdown></d2l-icon></d2l-button-icon> </d2l-icon>Previous Next </d2l-icon>
Accounting is becoming a global business language. Provide some evidence of this assertion. What are some of the implications of this trend?
Do research on the Internet and show references for the information. Comments should be in your own words. Do not forget to interact with other participants by following up with additional ideas or examples.
Assessment Task – Tutorial Questions Unit Code: HI5019 Unit Name: Strategic Information Systems for Business and Enterprise Assignment: Tutorial Questions 2 Due: 11:30pm 26 the June 2020 Weighting: 25% Total Assignment Marks: 50 marks Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit Learning Outcomes Assessed: 1. Critically evaluate the purpose and role of accounting information systems in today’s business environment; 2. Articulate the various transaction cycles, financial reporting, management reporting systems and e-commerce systems to technical and non-technical stakeholders; 3. Evaluate systems development methodologies and the role of accountants in system development projects; 4. Critically evaluate the range of cultural, security, privacy and ethical issues facing individuals and organizations as a result of information systems. Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 6 to 10 inclusive and submit these answers in a single document. The questions to be answered are:
Week 6 The following is a description of the conversion cycle of Central Production Limited: The conversion cycle of the company is triggered by a report from the warehouse. When the quantity of an inventory item falls below a pre-set minimum level, the warehouse manager sends an online inventory status report to production department advising them to schedule a production batch run for the item. Upon receipt of the report, the production clerk assesses the digital bill of materials and the route sheet files for the item to be produced and adds the production details to the online production schedule. The system automatically adds a record to the open work order file and sends an online work order to the work center supervisor’s computer and to the accounting clerk’s computer. The work center supervisor receives the work order from his computer and print hard-copy move tickets and materials requisitions for each production process. Production employees take the materials requisitions to store clerk and receives the materials and subassemblies needed to perform the production tasks. If additional materials beyond the standard amount is needed, the work center supervisor prepares additional materials requisitions. Production employees complete job time tickets after completing a production process to record the time spent on the job. The job time tickets are then sent together with the move tickets to the accounting department. After releasing the materials into production, the store clerk updates the material inventory records and send the materials requisitions to accounting department.
The clerk prepares a journal voucher and posts to the general ledger material control account at the end of each day. The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger work-in process and finished goods control accounts. Identify the risks exist in the conversion cycle of Central Production Limited. (10 marks, maximum 300 words) Week 7 Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above process. (10 marks, maximum 300 words)
Week 8 Elegant Limited sells restored classic cars. Most of its customers are private buyers who buy cars for themselves. However, some of them are investors who buy multiple cars and hold them for resale. All sales of Elegant Limited are for cash. Depict the association and cardinality for the sales of cars at Elegant Limited based on REA model. (10 marks, maximum 300 words) Week 9 You are currently working in a mid-tier accounting firm. In an engagement meeting with a client, the management of your client is concerned that the audit tests that you perform will disrupt operations. Your client has recently implemented a data warehouse and the management suggests that you draw the data for analytical reviews and substantive testing from the data warehouse instead of the operational database. The management points out that operational data are copied weekly into the data warehouse and all data you need are contained there. Outline your response to the management’s proposal and mention any concerns you might have. (10 marks, maximum 300 words) Week 10 The Chief Information Officer (CIO) and the Managing Director (MD) of Illustrious Limited recently had the following conversation regarding the development of a new information system for the company: CIO:
The way to go about the analysis is to first examine the old system, such as reviewing key documents and observing the workers performing their tasks. Then we can determine which aspects are working well and which should be preserved. MD: We have been through these types of projects before, and what always ends up happening is that we do not get the new system we are promised. Instead we get a modified version of the old system. CIO: I can assure you that will not happen this time. My team just want a thorough understanding of what is working well and what is not. MD: I would feel much more comfortable if we first started with a list of our requirements. We should spend more time in determining what exactly we want the system to do upfront. Then your team can come in and determine what portions to salvage if you wish. Just don’t constrain us to the old system! Required: a) The CIO and MD have different views on how the system analysis should be performed. Comment on whose position your sympathies with the most. (6 marks, maximum 200 words) b) What method would you recommend to Illustrious Limited for system analysis? Explain. (4 marks, maximum 150 words)