Task 1 (approximately 300 - 350 words)
The owner of a very small, part-time business is very disorganised and doesn't like filing invoices, accounts and receipts. 'What is the point of keeping all that paper work?' he asks.'Once the details have been recorded in the accounting system why waste time and spacefiling everything?'
REQUIRED:
Explain to the small business owner why it is important to keep supporting documentation and how such records are likely to be useful for future decision-making and provide an example
Task 2 (approximately 300 - 350 words)
Recently, a new student of accounting was overheard making the following remarks: 'Whyare we learning how to use the double-entry system of recording in the accounting cycle?Surely there are good computer packages available these days which can handle all of thesedetails.'
REQUIRED:
Provide a suitable reply.
Task 3 (approximately 300 - 350 words)
Brian Kelly has spent many years of his life panning for gold, with little success. On several occasions, he has found small traces of gold along the usual river banks that he is licensed topan. However, on his last trip to the Ballarat River, almost by accident he managed to find avery promising piece of rock, which he placed in his satchel. He took the rock into town to beexamined and valued by experts, who assured him that the rock was a valuable gold nuggetand that it was worth at least $60??000. Brian was elated and opened a bottle of champagne tocelebrate with his friends.
About 2 weeks later, he sold the nugget to a jeweller for $75??000 in cash.
REQUIRED:
Based on the Conceptual Framework, decide whether and when revenue exists and the appropriate time for this revenue to be recognised in the accounts of Brian Kelly, GoldProspector.
Task 4:
Jones' Mower Repairs began operations on 1 August 2016 and completed the following transactions during the first month.
1. Darren Jones deposited $35??000 of his personal funds in a current account at a bank opened in the name of the business.
2. Mower repair equipment was purchased at a cost of $24??000, of which $14??000 was paid in cash. A loan payable was given for the remainder.
3. Darren collected $5000 from customers for repair services performed.
4. Shop rent was paid for the month of August, $1500.
5. Supplies amounting to $2100 were purchased on credit.
6. Wages of $1200 were paid as well as an account for electricity, $250.
7. Darren paid for the supplies purchased in (5) above.
8. Supplies used during August amounted to $750.
REQUIRED:
Prepare a worksheet using the above information. List the following assets, liabilities and equity as column headings: Cash at Bank; Supplies; Equipment; Loan Payable; Accounts Payable; D. Jones,Capital. Show the effects of each of the transactions on the accounts listed. Indicate totals after each transaction.