PLEASE NOTE TASKS 3, 4 and 5 ARE ALL DUE TOGETHER IN WEEK 11

Task 3 Due Week 11: Adjusting Entries as at 30 June 2020

You have come to the end of the financial year, and you are required to process adjusting

entries so that you can prepare financial statements for Marys Caf.

Task 3 is to:

1. Enter the adjusting entries (a) to(e) below into your General Journal* and
2. Post the entries to the General Ledger.

*When you enter a journal entry dont forget the date, the account number and a narration for each entry. Please note you are NOT required to prepare a worksheet to record the adjusting entries and an adjusted trial balance.

1. Depreciation on the Caf Plant & Equipment is 20% using the Diminishing Balance Method. Other assets are depreciated using the Straight Line Method. The Toyota Panel Van has a residual value of $6,000 and has a useful life of 4 years. (Remember you are only accounting for one month for this exercise!)
2. Prepaid Expenses taken over from the previous owner (as at 31 May) was for rent paid 6 months in advance on the shop premises. Only 5 months rent remains prepaid at 30 June.
3. The periodic inventory method is used. Closing Inventory at 30 June 20 is $15,000. You will need to process an adjusting Journal entry to account for the Opening and Closing Inventory. (Hint Prepare a General Journal Entry to first Transfer the Opening Inventory to the P&L Summary Account; and then account for the Closing Inventory, also using the P&L Summary Account). Do NOT net off the opening and closing Inventory.
4. On 10 July you sent an invoice (your business name is Accounting Futures) to Mary Clark to charge her for your accounting services for June 2020. The invoice you sent to her was for $3,300 (including GST). The charges payable to you by Marys Cafe have not yet been included in Marys business records.
5. Casual staff wages of $4,000 are paid monthly. Wages have only been paid for the three weeks ended 23 June.

Student Checklist Task 3: Use this checklist to help you complete your assignment

Task List Task 3	Completed? Yes/No
Do your General Journal entries balance? (Dr=CR)
Date/Narration/account number entered on every General Journal entry?
All postings to ledgers complete (tick them off as you go). Prepare a trial balance after you have posted all the entries to ensure your General Ledger balances. Ensure Dr =Cr

ASSIGNMENT INSTRUCTIONS

Task 4 Due Week 11: Closing entries for 30 June 2020

When you have completed Task 3, you need to prepare and record the closing entries in the General Ledger so that you can prepare your financial reports. You are provided with a number of steps:

Step 1: Before commencing this task prepare a General Ledger Trial Balance to ensure that your General Ledger Balances. If you do not do this, you will waste time looking for errors before you can balance your balance sheet.

Step 2: Prepare the General Journal entry to close off all income and expense accounts to the Profit and Loss Summary Account. It is suggested that you create a new General Ledger Account called Profit and Loss Summary in the Equity Worksheet in the Excel file for this purpose.

Step 3: Post the Closing entry to the P & L Summary Account and all the income and expense accounts in your General Ledger. Please ensure that, after posting the entry, ALL your General Ledger income and expense accounts have zero balances. The balance in your Profit & Loss Summary Account will be the profit or loss for the month ended 30 June.

Step 4: Prepare a General Journal Entry to transfer the balance in the Profit & Loss Summary Account to Mary Clarks Capital Account and post the entry into the General Ledger. The balance of the Profit & Loss Summary Account should now be zero.

The only General Ledger accounts left with a balance should be the Balance Sheet Accounts.

Step 5: Prepare another Trial Balance of your General Ledger (which should be Balance Sheet accounts only) and ensure that it balances (ie DR=CR)

Student Checklist Task 4: Use this checklist to help you complete your assignment

Task List Task 4	Completed? Yes/No
The trial balance you prepared in Step 1 balances? (Dr=CR) AND the journal entry you prepared in Step 2 balances? (Dr=CR)
All your Income/Expense accounts in the General Ledger have zero balances after you have posted your Closing Journal entry to the P & L Summary Account?
All postings to ledgers complete (tick them off as you go). Does the trial balance you prepared after you have posted all the entries (Step 6) balance? Ensure Dr =Cr

Task 5 Due Week 11: Prepare Financial Reports for 30 June 2020

Having completed all Tasks, you are now ready to prepare the financial statements of Marys Caf for the year ended 30 June 2020.

Step 1* prepare a Fully Classified Income Statement (similar to the ones you prepared in Accounting for Business). The information required for your Income Statement can be taken from your P&L Summary Account in the General Ledger.

Step 2* Prepare a Fully Classified Balance Sheet. (Hint #1: If you prepare an Adjusted Trial Balance of your General Ledger at this point you will have the balances needed to prepare your balance sheet). (Hint #2: The Profit as per your Income Statement MUST agree with the Profit shown in the Equity Section of your Balance Sheet.).

Additional Information: At 30 June, the PMA Bank Loan is for 10 years until 30 June 2030.

Step 3* - Prepare Accounts Receivable and Accounts Payable Listings from your Subsidiary Ledgers to agree with the General Ledger Control Account for Marys Caf.

PLEASE NOTE: A Cash Flow Statement is not required.

*Please enter your reports in the Financial Reports Worksheet provided in your Excel Assignment File.

Student Checklist Task 5: Use this checklist to help you complete your assignment

Task List Task 5	Completed? Yes/No
Have you prepared fully classified Income Statement and Balance Sheet??
Balance Sheet Balances? If not check that all postings and tasks from 1 to 4 have been completed properly.
Profit per Income Statement = Profit shown in equity section of Balance Sheet?
Accounts Receivable and Accounts Payable Listings from the Subsidiary Ledgers agree with the General Ledger Control Accounts?