ACC/ACF 1100

Introduction to Financial Accounting

Assignment – Part One

In this assessment, you must NOT use generative artificial intelligence (AI) to generate
any materials or content in relation to the assessment task.

Due Date: Wednesday 4th September 2024 at 11:55pm(week 7)

Value: 10%
Purpose: To demonstrate your understanding of the effect of transactions
and events on the financial statements
Submission: uploaded via Moodle
Components: A practical (recording keeping) component, and a written response.
You must use the word templates provided on Moodle.
Requirements: Please read the detailed requirements on page 3 of this document.
There are 4 separate tasks involved.

Background and details:

Jasmine is in her first year at university undertaking an education degree. She
needed to earn income to support her living expenses so recently decided to
commence a sole proprietorship business as a global politics tutor. She chose
global politics because she performed well in VCE global politics and remembers
helping her classmates when they had trouble with certain topics.
Jasmine does not have her driver’s licence yet, so was limited in how far she could
offer to travel to tutor her students. She planned to initially focus on her former high
school which is in her local suburb. Jasmine had no prior experience studying
accounting, but had done some internet searches and was fairly confident she
could do the record keeping herself.

Details related to the commencement of ‘Jasmine’s Tutoring Service’ business

on 1 April 2024 are:
Assets contributed
Cash $2,800
Laptop $720 (estimated current value)
Mobile phone $450 (estimated current value)
Textbooks $250

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A description of transactions for the month of April 2024, including details
about how she treated the items, are:
2 April Jasmine paid $175 cash to advertise in her local school newsletter for the
month of April.
3 April Jasmine purchased stationery from Office-worx for $96 cash, recording it
as an asset.
3 April Jasmine loaded $250 on to a MYKI card ready to commute to students’
homes. She expects this amount to last her several months. She
recorded the total amount as an expense.
7 April Jasmine provided tutoring to a student for $80 cash.
11 April Jasmine provided tutoring to a group of three students and collected
$150 cash in total.
12 April Jasmine purchased more stationery for $50 cash, recording it as an asset.
14 April Jasmine conducted a tutoring session via Zoom and charged a reduced
rate of $30 which she received immediately through bank transfer.
15 April Jasmine purchased a motor vehicle to drive to students’ homes as she
was close to obtaining her driver’s licence. The vehicle cost $6,000. She
paid for the vehicle by organising a loan through the local bank.

17 April Jasmine became unwell so asked a close friend to take her scheduled
tutoring sessions to avoid disappointing the students. She paid her
friend $100 cash for taking three sessions after receiving $180 cash in
tutoring fees.
20 April Jasmine paid $34 cash for an advertisement at another school nearby.
The advertisement would be published in the last week of April and she
recorded it as an expense.

24 April Jasmine earned tutoring fees of $150 from the group of three students
she had met before, though they did not have cash and promised to pay
her within the next week.

26 April The parents of one of the students that Jasmine tutors paid her $750 in
advance for ten tutoring sessions. Jasmine recorded the full amount as
income. Only one of the sessions was conducted the same day, and
none of the remaining sessions occur in the month of April.
29 April A mobile phone/internet bill arrived for the month of April totalling $65.
Jasmine intends to pay it on the due date (20 May).
29 April Jasmine took $250 from the business bank account for personal use.
30 April Jasmine provided two separate tutoring sessions and received $120 cash.
30 April The three students who owed Jasmine money from 24 April settled what
they owed via bank transfer.

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 Assignment requirements:
Task 1 – Jasmine met you at university and learned that you are studying
accounting. She asked you to prepare her financial records for April so that she
could evaluate the accuracy of her own record- keeping. Record all of the data you
have been given for the month of April for Jasmine’s Tutoring in the ledger account
templates provided. Pay particular attention to how she treated each item. You
should first record the transactions according to how she treated each item, and not
according to how you think the item should have been treated.

Don’t total up ledger balances yet. Wait until the end of Task 3!

Task 2 - Two (2) of the transactions that Jasmine performed above were not
done as you have been taught in this unit. Identify these transactions by
highlighting all affected ledger entries in red and putting a strikethrough through them
like this. The strikethrough function is located on the Home tab, in the Font section:

Now, re-enter these transactions into your ledger following the method you’ve
learned in lecture, and colour these updated entries in green. As an example, let’s
consider an incorrect entry that recorded a sale as a cash sale instead of a credit
sale. We would correct is as follows:
CASH
1 April Sales Revenue $1,000

ACCOUNTS RECEIVABLE
1 April Sales Revenue $1,000

SALES REVENUE
1 April Cash $1,000
1 April Accounts Receivable $1,000

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Task 3 – Based on the background information provided in relation to Jasmine’s
business, you realise that several items require adjustment at the end of April that
Jasmine had not considered. These include:
- Stationery (she estimates $75 worth remains unused)
- Advertising
- Travel (the MYKI card balance is $150)
- The car loan attracts 12% interest per annum
- The estimated life of the mobile phone and laptop are 30 months with no scrap
value. Jasmine expects to use them evenly throughout that time so a straight-
line depreciation method would be appropriate.
- The recorded value of the textbooks does not require any adjustment.
- The motor vehicle has not been driven yet, so no depreciation expense is necessary.
Make the adjustments in the ledger accounts you prepared in Tasks 1 and 2 using a
different colour so they can be easily seen, AND prepare the set of the four
financial statements based on the updated data (i.e., ignore the crossed-out
entries). In total, you will therefore submit one set of ledgers that incorporate
April data and adjustments, along with four financial statements. You will need to
name the ledger accounts, add titles to the reports and you may choose to remove excess
rows to improve presentation and readability where possible.

Task 4 – Jasmine has asked you for your opinion on several things associated with
her small business, including:
• Should she be happy with the business after its first month of operation?
• Whether her record-keeping was satisfactory? Why were the two entries you
identified as incorrectly recorded incorrect?
• Any strategic advice for her going forward?
As her new friend at university that understands accounting, write an informal report
to Jasmine that addresses her queries. The report should be friendly, informative and
be written in a way that she will understand (given her limited accounting knowledge).
You must include at least one specific reference to lecture material, tutorial
material, or textbook material (i.e., lecture slide number, specific tutorial question,
textbook page number). Maximum 300 words (+/- 10%). Use the space at the end of
the financial statement templates so that your entire Assignment Part One
submission is within one document. No referencing is required. Artificial
Intelligence must NOT be used.
Marks for the assignment will be awarded based on the accuracy of financial data in
Task 1,Task 2, and Task 3 along with presentation, layout, clarity of expression
and depth of critical thinking in your written response (Task 4).