GROUP ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: Cai Gia Phát Student ID number: 31221025917

Student name: Nguyễn Quỳnh Tú Xuyên Student ID number: 31221025880

Student name: Huỳnh Nguyễn Minh Trí Student ID number: 31221021692

Student name: Nguyễn Kiều Bảo Ngọc Student ID number: 31221023507

UNIT AND TUTORIAL DETAILS

Unit name: Principles of Accounting Unit number:

Tutorial/Lecture: Mr. Trần Minh Hiếu Class day and time:
Lecturer or Tutor name:
ASSIGNMENT DETAILS

Title: Group Work FA 1

Length: Due date: 05/02/2023 Date submitted: 04/02/2023

DECLARATION
I hold a copy of this assignment if the original is lost or damaged.
I hereby certify that no part of this assignment or product has been copied from any other student’s work
or from any other source except where due acknowledgement is made in the assignment.
I hereby certify that no part of this assignment or product has been submitted by me in another
(previous or current) assessment, except where appropriately referenced, and with prior permission
from the Lecturer / Tutor / Unit Coordinator for this unit.
No part of the assignment/product has been written/ produced for me by any other person except
where collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
I am aware that this work may be reproduced and submitted to plagiarism detection software programs
for the purpose of detecting possible plagiarism (which may retain a copy on its database for future
plagiarism checking).

Student’s signature: Phat

Student’s signature: Xuyen
Student’s signature: Tri
Student’s signature: Ngoc
Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has
not been signed.
 1. Meg McKinney opened a public relations firm called Solid Gold on August 1, 2018. The
following amounts summarize her business on August 31, 2018:

During September 2018, the business completed the following transactions:

a. Meg McKinney contributed $17,000 cash in exchange for capital.
b. Performed service for a client and received cash of $800.
c. Paid off the beginning balance of accounts payable.
d. Purchased office supplies from OfficeMax on account, $1,200.
e. Collected cash from a customer on account, $2,000.
f. McKinney withdrew $1,600.
g. Consulted for a new band and billed the client for services rendered, $4,500.
h. Recorded the following business expenses for the month: Paid office rent: $1,000. Paid
advertising: $500.
Assets = + Owner’s Equity
Liabilities
Cash + Account + Office + = + - McKinney, + - Rent - Adv
Transaction

Receivable Supplies Land Account McKinney, Withdrawals Service Expense Exp.

Payable Capital Revenue

Bal. 1.9K +3.2K +15K +5K +11.9K +3.2K

a. + 17k +17K
b. +800 +800
c. -5K -5K
d. +1.2K +1.2K
e. +2K -2K
f. -1.6K -1.6K
g. +4.5k +4.5K
h. -1.5K -1K -500
+18.1 +1.2K +1.2K +15K +1.2K +28.9K -1.6K +8.5K -1K -500
K
$35,500 $35,500
2. Conner Thomas started a new business, Thomas Gymnastics, and completed the following
transactions during December:

Dec. 1 Thomas contributed $19,000 cash in exchange for capital.

      2 Received $3,800 cash from customers for services performed.

      5 Paid $200 cash for office supplies.

      9 Performed services for a customer and billed the customer for services rendered, $4,500.

     10 Received $200 invoice for utilities due in two weeks.

     15 Paid for advertising in the local paper, $250.

     20 Paid utility invoice received on December 10.

     25 Collected cash in full from customer billed on December 9.

     28 Paid rent for the month, $1,600.

     28 Paid $1,450 to assistant for wages.

     30 Received $1,400 cash from customers for services performed.

     31 Thomas withdrew $3,500.

 Assets = + Owner’s Equity
Liabilities

Cash + Accounts +Office + +Accounts +Thomas -Thomas, + -Rent -Adv -Utilities -Wages
Receivable Supplies Land Payable Capital Drawings Rev. Exp. Exp. Exp. Exp.
Transaction-
Dec

1. +19,000 +19,000

2. +3,800 +3,800

5. -200 +200

9. +4,500 +4,500

10. +200 -$200

15. -250 -250

20. -200 -200

25. +4,500 -4,500

28. -1,600 -1,600

28. -1,450 -$1,450

30. +1,400 +1,400

31 -3,500 -3,500

21,700 21,700
3. Net Income $115,700

Presented here are the accounts of Hometown Décor Company for the year ended December 31,
2018.

Land $ Owner contribution, 2018 $ 28,000

13,000
Notes Payable 33,000 Accounts Payable 14,000
Property Tax Expense 2,800 Accounts Receivable 800
Hunt, Withdrawals 36,000 Advertising Expense 17,000
Rent Expense 14,000 Building 170,400
Salaries Expense 67,000 Cash 2,800
Salaries Payable 1,300 Equipment 17,000
Service Revenue 225,000 Insurance Expense 1,700
Office Supplies 8,000 Interest Expense 6,800
Hunt, Capital, Dec. 31, 2017 56,000

Requirements
1. Prepare Hometown Décor Company’s income statement. (Example)
2. Prepare the statement of owner’s equity.
3. Prepare the balance sheet.

3-2.

HOMETOWN DÉCOR COMPANY

Owner’s Equity Statement

Year Ended December 31, 2018

Owner’s capital

Add: Investments: $56,000

Net Income: $115,700 $171,700

 $171,700

Less: Drawings: $36,000

Owner’s capital, December 31: $135,700

3-3.

HOMETOWN DÉCOR COMPANY

Balance Sheet
Year Ended December 31, 2018
Assets

Current Assets:

Cash $2,800

Accounts receivable $800

Supplies $8,000

Total Current Assets $11,600

Long-term Assets:

Equipment $17,000

Land $13,000

Building $170,400

Total Long-term Assets $200,400

Total assets $212,000

Liabilities and Owner’s Equity

Liabilities:

Accounts Payable $14,000

 Notes Payable $33,000

Salaries Payable $1,300

Total Liabilities $48,300

Owner’s equity:

Owner’s contribution $28,000

Owner’s capital $135,700

Total Owner’s Equity $163,700

Total liabilities and owner’s equity $212,000

4. Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first
year of operations, and both owners want to know how well each business came out at the end of
the year. Neither business kept complete accounting records, and neither owner made any
withdrawals. The businesses throw together the data shown on the next page at year-end:
To gain information for evaluating the businesses, the owners ask you several questions. For each
answer, you must show your work to convince the owners that you know what you are talking
about.
Works done:
Given expanded equation: Total assets = Liabilities + Owner’s capital – Owner’s Drawings +
Revenue - Expenses
(1) For Sal’s Silly Songs:
Owner’s Equity = Owner’s capital – Owner's Drawings + Revenue – Expenses
= 8000 – 0 + 35000 – 22000
= 21000 (US dollars)

Liabilities = Total assets – Owner’s Equity

= 23000 – 21000
= 2000 (US dollars)
(2) For Greg’s Tunes
Net Income = Revenues – Total Expenses
ð Revenues = Net Income + Total Expenses = 44000 + 9000 = 53000 (US dollars)
Based on the given expanded accounting equation:

Owners’s Equity = Owner’s capital – Owner’s Drawings + Revenue - Expenses

= 6000 + 53000 – 44000 = 15000 (US dollars)

Total assets = Liabilities + Owner’s equity

= 10000 + 15000
= 25000 (US dollars)
1. Which business has more assets?
ANSWER: Based on the calculations above, Greg’s business has more assets worth $25000
compared to that $23000 of Sal’s.
2. Which business owes more to creditors?
ANSWER: Greg’s business. Sal’s business is liable for $2000 to creditors while Greg’s business
is liable for $10000.
3. Which business has more owner’s equity at the end of the year?
ANSWER: Sal’s business. Owner’s equity from Sal’s business is $21000, which is higher than
$15000 resulted from Greg’s one
4. Which business brought in more revenue?
ANSWER: Greg’s business. The business gained $53000 in revenue while Sal’s business
brought in only $35000.
5. Which business is more profitable?
Sal’s business net income = Revenues – Expenses = 35000 – 22000= 13000 (US dollars)
Greg’s business net income = $9000
ANSWER: Sal’s business.
6. Which of the foregoing questions do you think is most important for evaluating these
two businesses? Why?
ANSWER: The question of which business has more owner’s equity is the most important.
When a business has higher equity, it also means that they are having more profits and showing
greater growth in the business.
7. Which business looks better from a financial standpoint?
ANSWER: From a financial standpoint, Sals’s business is better because it owes less to
creditors, having more profits and more owner’s equity.