CRESCENDO INTERNATIONAL COLLEGE

FOUNDATION IN BUSINESS
2022 SEPTEMBER SEMESTER
INTRODUCTION IN FINANCIAL ACCOUNITNG 1

ASSIGNMENT (INDIVIDUAL PROJECT)

This project comprises 30% of the overall grade for this module.

ASSIGNMENT BRIEF

Section A – Recording transactions:

Imagine you started a golf gear business, namely Fun Golf on 1 October 2021. Fun Golf sells a golf
gear, Xpert, that is popular with golf enthusiasts. Fun Golf uses a periodic inventory system.

The following are the transactions and events occurred during the year ended 31 December 2021:

Date Description
1 Oct You opened a bank account for the business by using her capital invested of $400,000.
18 Oct Entered into tenancy agreement with IOI property to rent a shop, starting from 1
November 2021 and paid rental deposit of $6,000 by cheque. This deposit is treated
as security and it is refundable upon expiry of the agreement.
28 Oct Hired Ms. Ester as shop-keeper with monthly salary of $2,000. Employment starts from
1 November and salary will be due on 7th of the following month.
31 Oct Purchased commercial insurance and paid insurance premium of $9,600 by bank
transfer.
1 Nov Bought a motor vehicle at $60,000 for delivery purpose, via bank transfer.
1 Nov Paid renovation of $35,000 to contractor by cheque.
1 Nov Bought furniture and fittings for the shop of $25,000 and paid by cheque.
3 Nov Withdrew money from bank of $10,000 as cash on hand for payment of daily operating
expenses.
5 Nov Paid rental for the month of November of $3,000 by cash.
13 Nov Purchased Xpert (25 units at cost of S1,200 each) from a supplier by cheque.
15 Nov Purchased Xpert (40 units at cost of $1,250 each) from a supplier – Tom on credit.
17 Nov Tom gave discount of $1,500 and the outstanding balance to Tom was settled by bank
transfer.
18 Nov Sold Xpert (25 units at selling price of $1,800 each) to a customer – David on credit.
19 Nov Purchased Xpert (20 units at cost of $1,325 each) from a supplier – Alan on credit.
19 Nov Customer - David returned defective Xpert amounting to $4,000.
25 Nov David paid $13,200 by cheque.
1 Dec Term loan from ABC Bank was disbursed to bank, amounting to $60,000.
2 Dec Sold Xpert to a customer on credit: Henry – (5 units at selling price of $2,000 each).
7 Dec Paid the following expenses by cash:
- Rental for the month of December of $3,000.
- Salary to Ms. Ester of $2,000 for the month of November 2022.
- Water and electricity bill of $300 for the month of November 2022.
- Electricity bill of your own house of $200.
8 Dec Purchased Xpert (10 units at cost of S1,420 each) from a supplier by cheque.

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 20 Dec Purchased Xpert (15 units at cost of S1,450 each) from a supplier by cheque.
28 Dec Sold Xpert (20 units at selling price of $2,150 each) to a customer by bank transfer.
30 Dec Paid $10,000 to supplier – Alan by cheque.

Your tasks:

1) Record the above transactions into the appropriate ledger accounts (i.e.: Sales ledger, Purchase
ledger and general ledger) for the year ended 31 December 2021 and bringing down the balances
as at 1 January 2022.
(35 marks)

Please use the sample format as follows:

Purchase Ledger
Trade Payable - Tom
Date Description Amount Date Description Amount
2021 2021

Dec 31 Balance c/d -

- -
2022
Jan 1 Balance b/d -

Sales Ledger
Trade receivable - David
Date Description Amount Date Description Amount
2021 2021

Dec 31 Balance c/d -

- -
2022
Jan 1 Balance b/d -

General Ledger

Water and Electricity expense

Date Description Amount Date Description Amount
2021 2021
Dec 31 Statement of P/L -
- -

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Section B – Determining Closing Inventory Value:

Fun Golf completed its physical inventory count. The inventory count on 31 December 2021 shows 60
units of Xpert on hand. The cost of inventories of Fun Golf is determined by Weighted Average Cost
method.

Your tasks:

Refer to Section A for the purchases and sales data regarding Fun Golf’s golf gear.
2) Compute the Cost of ending inventory as at 31 December 2021.
(5 marks)

Section C – Inventories valued at the lower of Cost and NRV:

After physical inventory count for the year ended 31 December 2022 had taken place, the Cost of the
closing inventory of Fun Golf was as determined in Section B above.

The following information was not considered when determining that amount:

(a) Included in the count was $6,475 of goods that were obsolete and it is not expected to be sold
in the future, due to the high-tech nature of this product.
(b) Included in the inventory account was a batch of inventory at cost $12,950 damaged during
the shipment. The estimated selling price of this batch of product is $15,000. The cost of repair
is around $2,000.

Your tasks:

3) Prepare a schedule to determine the correct inventory value for Fun Golf as at 31 December 2021.
Provide explanations for each item above, saying why you did or did not make adjustment for
each item.
(5 marks)

Section D – Adjustments and Preparation of financial statements:

The following matters also need to be considered before preparing the financial statements of Fun
Golf:
i. Fun Golf has the following depreciation policy:
• Motor vehicles are expected to be used for 5 years, and then sold for 20% of their original
cost. They are depreciated using straight line method.
• Renovation - 30% per annum using reducing balance method.
• Furniture & fittings – 15% per annum using straight line method.
• Depreciation is charged on asset purchased and sold during the year on a pro rata basis
according to the months of ownership.
ii. A credit customer – Henry has gone bankrupt and it is not now expected that any of this debt
will be recovered.
iii. The term loan was received on 1 December 2021 and is repayable in full on 1 December 2026.
Interest is charged at a fixed rate of 8% per year and is payable in 2 semi-annual instalments,
the first of which will be paid on 31 May 2022.

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 iv. Insurance paid related to an annual premium of $12,000 that covers the 12 months to 31
October 2022.
v. Salary to Ms. Esther for the month of December 2021 of $2,000 was unpaid as at 31 December
2021.
vi. Water and electricity expense for the month of December 2021 of $280 was unpaid as at 31
December 2021.

Your tasks:

4) Prepare an Extended Trial Balance as at 31 December 2021, using the format as below by:
(a) Listing the balances from the ledgers in the Trial balance format.
(b) Making the necessary adjustments in respect of closing inventory balance and additional
information above.
(c) Extending balances to statement of profit of loss and statement of financial position,
calculating net profit and balancing the columns.

(25 marks)

5) Prepare statement of profit or loss and statement of financial position for the financial year ended
31 December 2021.
(30 marks)

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ADMINISTRATIVE DETAILS

Submission of Assignment
You need to adhere closely to ALL the instructions below when submitting your assignment:
• Submission deadline: Monday 5 December 2022 9am
• Upload and submit a soft copy to LMS portal.
• Print and submit a hard copy by hand to your tutor.

Report Format

• The assignment must be presented in a printed report (no handwritten format). The
report should be printed in calibri (font size 12) with 1.5 spacing.

• Use Page 6 of this question as the FRONT page of your report.

• You are expected to present the report neatly and organize the report in a manner that
allows the readers understand your work. Use appropriate headings and subheadings to
assist you in presenting your arguments and comments systematically. A report will
normally include all or some of the following sections:

Cover Sheet
Answer for each question

• All calculations, where applicable, must be included in an Appendix to the report, but you
should show summaries and/or use the results of the calculations, where appropriate, in
the body of the report.

• The pages of the report should be numbered sequentially (e.g., 1, 2, 3 or page 1 of 12, page
2 of 12, page 3 of 12, etc.).

Marks will be deducted:

▪ for omission or errors in the heading of the financial statements.
▪ for omission of assignment cover sheet.
▪ for omission of page numbers.
▪ for inappropriate presentation of figures.
(Note: In this assignment, figures should be commonly presented, $ 8,000).
▪ if the heading of the financial statement is not shown on the 2nd page, when the
financial statementsrun over 2 pages.
▪ poor, messy or inappropriate presentation.
▪ inappropriate or inconsistent font size used in the assignment.

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 FOUNDATION IN BUSINESS
INTRODUCTION IN FINANCIAL ACCOUNTING 1
INDIVIDUAL ASSIGNMENT

Tutor’s name: Agnes Wong Sook Ting

Semester: September 2022 Project marks: %

INTEGRITY STATEMENT:

I certify that this assignment is my own work, and appropriately acknowledged wherever
material adapted from other sources. I understand that plagiarism, cheating, collusion, fraud,
fabrication or falsifications of data are not acceptable. I agree that if at any time it is shown
that I have significantly misrepresented material submitted to Crescendo International
College, any marks or credits awarded to me on the basis of that material may be revoked.

Please sign below affirming that your work is your own and has been conducted with full
integrity.

Student Name: Student ID:

Signature: Date:

Marks Allocated Marks Obtained

% %
Q1 35
Q2 5
Q3 5
Q4 25
Q5 30
Total 100

Use this page as the FRONT cover of your report