Subject Code and Name ACCT6002 Accounting Fundamentals
Assessment Assessment 2 – Case Study
Individual/Group Individual
Length (1,500 words +/- 10%)
Learning Outcomes   Explain the accounting cycle and apply double entry accounting principles to process transactions.   Differentiate between periodic and perpetual inventory systems and apply appropriate accounting procedures.   e) Prepare an accounting worksheet, Income Statement, Statement of Changes in Equity and Balance Sheet for sole proprietors and partnerships.   g) Interpret, understand and analyse financial statements for decision making, and communicate their significance to accounting and non-accounting professionals.
Submission By 11:55pm AEST/AEDT Sunday of Module 5.1 (week 9)
Weighting 30%
Total Marks 100 marks


The purpose of this assessment is to apply the conceptual and technical aspects of accounting and prepare relevant business financial statements. Students are expected to contenxtualise and evaluate accounting information presented in statements for decision making purposes. Each question uses realistic data and the professional practices similar to that found in workplaces.

ACCT6002_Assessment Brief 2_Individual Case Study

Submission Instruction

Please aim to complete this assignment a few days prior to the due date to allow for any unforeseen circumstances such as illness, holidays, family issues, work commitments etc. You may submit the assignment early if you have other commitments around the due date.

All times listed are local (Sydney) times. Please ensure you factor in any time difference between Sydney and your location when submitting your assignment, to avoid incurring any late submission penalties.

Please note the following important instructions relating to the assignment format and submission:

  • Note that this is an individual piece of assessment. You will need to work individually to prepare a response to ALL of the questions listed in the assessment.
  • You must submit your assessment in one Excel file. Any submissions in any other file formats will not be accepted.
  • Each question (including all sub-questions) should be presented in a single worksheet. As there are 5 questions in this assessment, your Excel file should contain 5 worksheets in total.
  • You cannot scan handwritten responses and submit. All answers must be typed in Excel.
  • Your assessment needs to be submitted though the submission link available on the Blackboard. Assignments submitted via e-mail (or any other method) will NOT be accepted.
  • Make sure that you upload the correct file. If you discover (after the due date) that you have uploaded a draft version or the wrong file completely, you will not be allowed to submit a second file.

Question 1: Preparation of Adjusted Trial Balance

Josh Clarendon operates a small retail store. The unadjusted trial balance of Josh’s Retail Store isshown below.

Josh’s Retail Store Unadjusted Trial Balance As at 30th June 2021
Account Debit ($) Credit ($)
Cash at Bank 35,000
Accounts Receivable 5,000
Inventory 14,600
Office Supplies 2,400
Motor Vehicle 15,000
Accumulated Depreciation – Motor Vehicle 4,000
Accounts Payable 3,000
Josh Clarendon, Capital 44,000
Josh Clarendon, Drawings 2,000
Sales Revenue 57,000
Sales Returns and Allowances   2,000
Purchases 15,000
Purchases Returns and Allowances 4,000
Salaries Expenses 11,000
Rent expense 10,000
Total 112,000 112,000

The following additional information was not considered while preparing unadjusted trial balance:

  1. The Sales Revenue account includes $5,000 for the services to be provided in August 2021.
    1. The rent expense account includes an amount of $1,000 paid in advance for July 2021.
    1. The unused office supplies on hand totalled $1,500.
    1. Estimated depreciation on the motor vehicle is $2,000.

Note: In addition to those accounts listed in unadjusted trial balance, the chart of accounts of Josh’s Retail Store contains the following accounts: Prepaid rent, Unearned Revenue, Office Supplies Expense and Depreciation Expense.


Prepare adjusted trial balance using the template provided over the page.

Josh’s Retail Store Worksheet as at 30 June 2021
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
Account Name Dr Cr Dr Cr Dr Cr
Cash at Bank 35,000
Accounts Receivable 5,000
Inventory 14,600
Office Supplies 2,400
Motor Vehicle 15,000
Accumulated Depreciation – Motor Vehicle 4,000
Accounts Payable 3,000
Josh Clarendon, Capital 44,000
Josh Clarendon, Drawings 2,000
Sales Revenue 57,000
Sales Returns and Allowances 2,000
Purchases 15,000
Purchases Returns and Allowances 4,000
Salaries Expenses 11,000
Rent expense 10,000
Total 112,000 112,000

Gym Bicycles is a retail business that purchases racing bicycles from suppliers and sells them to customers at a higher price. The business is registered for GST and uses perpetual inventory system. The following transactions occurred during March 2021.

Date Details
  Mar-03 Purchased 500 bicycles on credit for $385 each (plus GST) from Redline Central, terms 5/15, n/30.
  Mar-05 Sold 275 bicycles on credit to Sun Bicycles for $572 (including GST); terms 3/10, n/30.
Mar-09 Received credit for the 8 damaged bicycles returned to Redline Central.
Mar-11 Paid Redline Central for the purchase of bicycles on 3rd March.
  Mar-13 Sun Bicycles returned 6 bicycles as they were defective. Credit was granted for returned products.
Mar-14 Received payment from Sun Bicycles for the sales on 5th March.

Note: Gym Bicycles’s chart of accounts contained the following accounts: Cash at Bank, Inventory, Accounts Receivable, GST Receivable, Accounts Payable, GST Payable, Sales, Sales Return and Allowances, Discount Received, Discount Allowed, Cost of Sales.


Prepare journal entries for the above transactions for the month of March 2021 for Gym Bicycles.

Question 3: Preparation of Financial Statements

Financial statements for Mandy’s Retail Shop are prepared annually. The adjusted trial balance amounts at June 30 are shown below.

Mandy’s Retail Shop Worksheet as at 30 June 2021 Adjusted Trial Balance
Account Name Dr Cr
Cash at Bank 39,000
Accounts Receivable 10,000
Inventory (1st July 2020) 19,600
Office Supplies 1,280
Motor Vehicle 20,000
Accumulated Depreciation – Motor Vehicle 8,000
Accounts Payable 1,050
Mortgage payable 45,000
Mandy, Capital 29,500
Mandy, Drawings 6,000
Sales Revenue 59,650
Sales Returns 2,900
Purchases 24,500
Purchase Returns 2,500
Salaries Expense 12,000
Rent Expense 6,000
Interest Expense 2,700
Unearned Revenue 1,300
Interest Payable 900
Office Supplies Expense 1,920
Depreciation Expense 2,000
Total 147,900 147,900

The end-of-period stocktake shows an inventory balance of $11,320 on 30 June.


Prepare the following:

  1. Income Statement
  2. the closing entries on 30th June 2021.
  3. Statement of Changes in Equity
  4. Balance Sheet in narrative format

Question 4: Special Journals

Justin opened a corner store on 1 July 2021. He balances his books at the end of each month and uses special journals and the periodic inventory system. Transactions for July 2021 were as follows:

Date Details
5-Jul Purchased inventory from Orion Ltd. on account for $6,500 plus GST. The credit term is 2/15, n/30.
14-Jul Sold $2000 inventory plus GST to Metro Ltd, the credit term is 3/10, n/30.
18-Jul Paid Orion Ltd. for 5th July purchase. Cheque No.103.
27-Jul Received cash payment from Metro Ltd.
31-Jul Recorded depreciation expense for furniture, $300.

The chart of account for Justin’s Corner Store is shown below:

Cash at Bank 100 Accounts Payable Control 200
Accounts Receivable Control 110 GST Payable 210
Office Supplies 120 Justin, Capital 300
GST Receivable 140 Sales 400
Furniture 150 Discount Received 401
Accumulated depreciation – Furniture 151
Purchase 501
Purchase Return and Allowances 502
Discount Allowed 510
Salary Expense 520
Depreciation Expense 530


Prepare the journal entries for the transactions above in the relevant journal books. Use Cash Receipts Journal, Cash Payments Journal, Purchases Journal, Sales Journal and General Journals where applicable. For each transaction, you need to do only one journal entry.

You may use the templates provided over the page.

Cash Receipts Journal

p. 1.

    Date     Account   Post Ref. Debits Credits
Cash at Bank Disc. Allowed GST Payable   Sales GST Payable Acc. Recei.   Other

Cash Payments Journal

p. 1.

  Date   Account   Ch. No.   Post Ref. Debits Credits
  Other Acc. Payable   Purchase GST Rec. Cash at Bank Disc. Received GST Rec.

Purchases Journal

p. 1.

Date Account Terms Post Ref. Purchases GST Receivable Accounts Payable

Sales Journal

p. 1.

Date Account Terms Post Ref. Sales GST Payable Accounts Receivable

General Journal

p. 1.

Date Account Post Ref. Debit Credit

Question 5: Financial Statement Analysis

Sarah works at a public company called JPG Manufacturing Ltd. She has observed that the company is trying to expand its operation in the market over the past one year. The management has heavily invested in plant and equipment over this period. Considering the high growth potential of the business, Sarah is planning to invest in this company by purchasing shares. She consulted with her friend Linda regarding this plan. After reviewing JPG Manufacturing’s balance sheet for past two years, Linda commented, “While I understand that this company is focusing on growth, they have taken a risky approach to achieve the growth”. Do you agree with Linda’s comment? Why or why not? Justify your answer.

Note: You will not be penalized if you do not use financial statement analyses ratios to answer this question. You need to provide explanation of why you agree or not-agree with Linda’s comment.

JPG Manufacturing Ltd Comparative Balance Sheet As at 30th June 2020 and 2021
2020 2021
Current Assets
Cash at Bank 35400 9,300
Accounts Receivable 62700 76,650
Inventory 48000 60,600
Other current Assets 9600 8,850
Total Current Assets 155700 155400
Non-current Assets
Land and Building 81000 81,000
Plant and Equipment 93000 285,000
Furniture 8700 7,950
Long-term investment 13800 13,500
Total Non-current Assets 196500 387450
Total Assets
352200 542850
Current liabilities
Accounts Payable 78600 78,150
Total current liabilities 78600 78150
Non-current liabilities
Long-term debt 123600 313,200
Total non-current liabilities 123600 313200
Total Liabilities
202200 391350
Share Capital 150000 151,500
Total Equity 150000 151,500
Total Liability and Equity                               352200 542,850

Learning Rubric: Assessment 2

  Assessment Criteria   Fail (Unacceptable) 0- 49%   Pass (Functional) 50-64%   Credit (Proficient) 65-74%   Distinction (Advanced) 75 -84%   High Distinction (Exceptional) 85- 100%
Understanding Shows very little to no Shows limited Thorough knowledge or Highly developed A sophisticated
and ability to understanding of how to understanding of how to understanding of the understanding of the understanding of the
analyse and/or apply the accounting apply the accounting accounting system accounting system accounting system
critique system technique to the system technique to the techniques relevant to techniques relevant to the techniques relevant to the
accounting case study questions. case study questions. the case study. case study. case study.
techniques and
methods used in practice and financial information that Key components of the assignment are not addressed. Has answered some parts incorrectly.
are prepared.
  Demonstrates little to no
capacity to explain and
apply relevant concepts.
  Has answered most parts
Knowledge and understanding of accounting concepts, techniques and processes       40% Limited awareness of relevant accounting information required for business decisions     Difficulty and/or confusion in identifying correct accounting concepts, tools and processes required for case study questions Understanding and being able to identify relevant accounting information for business decisions   Understanding a range of accounting techniques and processes available for generating and analysing information   Ability to use appropriate accounting techniques and Understanding rationale for selecting specific accounting tools and processes   Understanding and being able to explain quantitative and qualitative characteristics of accounting information useful for business decisions Thoroughly understanding the accounting concepts, techniques and processes   Being able to justify selection of specific accounting tools and processes Thoroughly understanding accounting concepts, techniques and processes, and accounting information required for solving practical problems   Being able to critically justify selection of applicable accounting tools and processes
Discuss and apply No or little use of Applying correct steps in Identify and explain Analysing quantitative and Correctly preparing and
accounting tools, accounting information preparing quantitative and qualitative characteristics of interpreting different
concepts and for decision making accounting reports qualitative accounting information, and accounting statements.
techniques to prepare characteristics of applying analysis to
accounting information that is useful for decision making, Difficulty and/or confusion in preparing accounting reports Applying appropriate accounting procedures accounting information, which are useful for business decisions solve practical problems   Correctly preparing and Critically justifying business decisions using relevant accounting
interpreting different information
Difficulty and/or confusion in identifying and applying correct accounting procedures accounting statements.
Effective communication Difficulty in explaining rationale for selected accounting tools and processes Mostly clear information presentation, with some minor errors       Evidence of attempts to make clear to audience, the rationale and application of selected accounting tools and processes Mostly clear and understandable presentation of information Clearly presented and adequately justified responses   Good references to quantitative and qualitative information where applicable Clearly presented and adequately substantiated responses, which indicate full understanding and thorough application of relevant accounting tools and processes   Sufficiently substantiated discussion of quantitative and qualitative information