Assignment: Journal Entries
On 1 Oct 2018, Andrew Brown opened Nundle Services, a small business offering maintenance services in New South Wales. During the month of October, the business incurred the following transactions:
2 Oct, Andrew invested $50,000 cash in the business, which is organised as a sole trader.
3 Oct, got a 5 year loan for $30,000 from the ANZ bank, interest is 5% pa.
4 Oct, purchased and paid for equipment worth $51,000. Monthly depreciation will be $850.
5 Oct, purchased supplies for $6,500 on credit.
8 Oct, paid Oct office rent of $7,200.
10 Oct, Brown withdrew $2,000 for personal purposes.
17 Oct, paid an invoice of $4,500 for advertising
25 Oct, paid one year of insurance for $5,600
Additional information at 31 Oct:
Supplies on hand was $3,100
Services revenue of $22,500 must be accrued
Monthly payroll is $11,500 and paid once a month on Friday after the month ended. 31 Oct 2018 was on Wednesday.
Some customers advanced $10,500 for maintenance services to be provided next month but this amount hasn't been recorded.
Requirements:
- Provide journal entries for all transactions that occurred during October 2018. (8 marks)
- Open T-accounts and post all journal entries to the T-accounts. Total all of the T-accounts to determine their balances at the end of the month.
- Provide your handwritten solution - scan or use your phone to copy and paste its image into your assignment. You can use a free scanning app such as Camscanner, OfficeLens, or Google Drive.
- Based on balances from the T-accounts, prepare the trial balance by using an Excel spreadsheet. Present your answers in a normal view, showing columns and rows.
- What are temporary and permanent accounts? From your trial balance, choose four permanent and four temporary accounts.
- From your trial balance, choose two accounts with normal debit balances and two accounts with normal credit balances.
- What are adjusting entries? Why do we have to do adjusting entries? Provide all adjusting entries for Nundle Services in October.
- Using your trial balance in the preceding question and Excel spreadsheet, prepare the ten column worksheet for the month ended 31 October. In the spreadsheet, you are required to have a data section separated from a report section. Use an IF function for Profit or Loss. Present your answers in both normal and formula views, showing columns and rows.
- Using the spreadsheet, prepare three financial reports. Present your answers in both normal and formula views.
- Calculate and evaluate the firm's current and debt ratios.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.